Addressing market power in electronic lodgment services
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Electronic conveyancing (eConveyancing) for property transactions has become increasingly widespread since its introduction in 2013.
The market for electronic lodgment services is currently dominated by the incumbent Electronic Lodgment Network Operator (ELNO), PEXA. Although a second ELNO, Sympli, has recently entered the market, PEXA retains close to 100 per cent of the market.
The CIE was commissioned by the NSW Office of the Registrar General to undertake a cost benefit analysis of options to address market power in the market for electronic lodgment services. The market for electronic lodgment services is currently dominated by the incumbent Electronic Lodgment Network Operator (ELNO) which retains close to 100 per cent of the market. Although a second ELNO has recently entered the market, the current regulatory arrangements limit competition.
ELNOs are currently not interoperable, meaning that for multi-party transactions all parties must use the same ELNO. The lack of interoperability may limit effective competition in the market due to :
network effects, which are a recognised barrier to competition
the relatively high cost ‘multi-homing (the costs of subscribing to and using more than one ELNO). High costs of subscribing to multiple ELNOs would be expected to favour the incumbent and limit competition.
This study also includes a distributional analysis which measures the impact on consumers and other stakeholders from changing the market structure. Our analysis was based on extensive stakeholder consultations and builds on a range of previous studies considering interoperability and identifying options to increase competition.
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