HONEYWELL says an Icontrol and Alarm.com merger would violate antitrust regulations and allow a single software platform provider to control 70 per cent of the smart home services market and has filed an antitrust lawsuit to break the $US140 million deal.
Announced in June 2016, the proposed merger also calls for Comcast to take over Icontrol’s Converge platform while Alarm.com acquires Icontrol’s Piper smart home hub and the Connect platform on which ADT’s Pulse panel is based. Honeywell says the merger would allow Alarm.com to insist that third-party manufacturers of security hardware and smart home devices, such as thermostats, lights and security cameras, use its platform exclusively.
Honeywell maintains in the suit that it designed its software to support ADT’s hardware after considerable time and expense. The merger would cause Honeywell to lose sales just as it will be forced to make additional investment in its platform, according to the suit.
In the suit, Honeywell argues the combined Icontrol and Alarm.com entity would have a 70 per cent share of the market for software that allows remote operation by smartphone or computer of a home alarm system and other connected devices.
The proposed acquisition would violate section 7 of the Clayton Act and section 1 of the Sherman Act, according to the suit, which seeks a judgment that the deal violates antitrust laws and an injunction barring the planned acquisition or any other transaction that would combine portions of the two companies providing remote services for security systems.
Case precedents indicate that courts consider 65 per cent market share is sufficient to establish a prima facie case that a merger is anticompetitive, according to Honeywell’s February 22 lawsuit.
In a SEC filing one day later, Alarm.com said it was “proceeding with activities required to close the acquisition” and that it “intends to defend itself vigorously in this matter.” ♦
