The US Department of Justice has confirmed that it is conducting an antitrust investigation of Nuance Communications. The investigation is looking at Nuance's acquisition of Philips Speech Recognition Systems from Royal Philips Electronics for $96.1 million in October 2008. There has been concern since the purchase that Nuance has essentially taken control of the world's medical transcription market. Nuance's acquisitions, which have sometimes been preceded by submitting target companies to legal action for alleged patent infringements, have been the subject of complaints from some of its competitors. The Justice Department's investigation has been ongoing for several months; Nuance says that it has been cooperating with the government since late 2008.
> > N E W S > > T R E N D S > > A N A LY S I S Nuance Under Antitrust Investigation The U.S. Department of Justice has confirmed that it is con- monopoly within the [medical tran- scription sector].” ducting an antitrust investigation of Nuance Communications. According to the email, Preziosi’s The investigation is looking at spreading beyond the scope of the comments “focused mainly on the in- Nuance’s acquisition of Philips Speech Philips acquisition or Nuance’s med- terconnectedness of the dictation/tran- Recognition Systems from Royal ical transcription business. scription process to patient care Philips Electronics for $96.1 million in In a December 2008 email obtained delivery and the healthcare reimburse- October 2008. by Speech Technology, and sent by ment system.” There has been concern since the Peter Preziosi, CEO of the Medical He claimed that while the Justice purchase that Nuance has essentially Transcription Industry Association Department had general familiarity taken control of the world’s medical (MTIA), to MTIA’s board and others, from an economic, policy, and tech- transcription market. It already domi- Preziosi said he took part in a meet- nology perspective, it had little if any nated the field in the United States, ing called by Justice Department knowledge of how the transcription and with Philips, which had a very lawyers and economists, who were sector operates specifically. strong foothold in Europe, it was said investigating whether “recent acquisi- Preziosi explains in an interview to have seized that market as well. tion activity of Nuance constituted a continued on next page During its history, Nuance has had a robust acquisitions strategy, acquiring a number of competitors. Since 2006 Nuance Acquires Voicemail-to-Text Provider Jott alone, it has swallowed as many as 15 >> Nuance Communications expanded its Mobile Division voice services portfolio companies, including Dictaphone, a with the acquisition of Jott July 14. Financial terms of the deal were not disclosed. major medical transcription player for Jott is the creator of the Jott Assistant, which enables users to create notes, set which it paid $357 million; eScription, reminders and appointments, send email and text messages, and post to their favorite another medical transcription firm for Web services—all via voice. which it paid $340 million; and Jott According to Mike Thompson, senior vice president and general manager of Nuance Networks, the Seattle-based provider of Mobile, Nuance had been very impressed with Jott and its leadership team. “When we mobile voice-to-text applications (see looked at the Jott service, it was somewhat unique—in fact, it was very unique—and related story at right). the users raved about it,” Thompson says. “Those two points were what got us very Nuance’s acquisitions, which have excited about connecting with the management team.” sometimes been preceded by submit- The combined Nuance and Jott teams will focus on several key voice-to-text initiatives: ting target companies to legal action • To further extend the power of Jott across the mobile mass market, Nuance plans to for alleged patent infringements, have package and offer Jott Assistant to mobile operators as part of its voice services portfolio; been the subject of complaints from • Nuance and its Enterprise Unified Communications partners will offer a secure, some of its competitors. Whether these highly scalable, and differentiated enterprise package that includes Jott services; and complaints spurred the Justice Depart-
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