Management information systems are important databases used to
handle student information, such as attendance and safeguarding,
and most UK schools are required to have these databases in
place. Education Software Solutions Ltd (ESS) is the largest
provider of these systems in the UK, with approximately a 50%
share of the market in England, and even higher in Wales and
Northern Ireland.
The Competition and Markets Authority (CMA) has received
complaints from a number of ESS's customers suggesting the firm
is making it difficult for them to switch to a new provider.
These schools reported they had been warned by ESS that they
would not be able to share a copy of their database with a new
provider, as doing so would breach ESS's intellectual property
rights. The CMA understands that sharing database back-up copies
is a longstanding and widespread practice used in the sector for
data transfer of this kind and, without it, the CMA is concerned
that schools' ability to move to a new provider would be severely
hampered.
While some means of switching are permitted by the company, they
are reportedly complex, time consuming and error prone. Moreover,
schools and competitors reported that ESS had objected to the
alternative solutions put forward to enable the extraction of
their data.
The CMA will be investigating ESS to determine whether or not the
law has been breached. As part of this, the CMA will consider
whether it needs to impose interim measures to prevent harm from
occurring while it carries out its investigation. If the
allegations against ESS are found to be true, such behaviour
could be a breach competition law.
Juliette Enser, Interim Executive Director of Competition
Enforcement, said:
We're concerned about the complaints we've received regarding
ESS's alleged behaviour. As such, we'll be investigating their
conduct with urgency to get to the bottom of the matter.
Management information systems are an integral part of protecting
schools' data, reducing costs, and safeguarding students. It's
essential that schools are able to pick the most appropriate
system for their needs – and change providers with ease when
their contract is up.
In 2022, ESS offered the CMA
commitments following a review to determine whether the company was using its
dominant position in the market to push schools into accepting
new 3-year contracts, where previously they had run for just
one year. The binding commitments enabled eligible schools to
exit early from their 3-year contract, and the CMA continues to
monitor ESS's compliance with these commitments. The CMA's new
concerns in relation to ESS's conduct focus on a different
possible abuse of dominance and are therefore the subject of a
separate investigation.
For more information, see the CMA's investigation into conduct
of Education Software Solutions Limited (51427) case page.
Notes to editor
- No conclusion should be made that the law has been broken.
- ESS is the largest provider of school management information
systems in the UK. Its systems are currently used in England,
Wales, and Northern Ireland.
- The CMA launched this investigation under section 25 of the
Competition Act 1998 following reasonable grounds to suspect
there had been an infringement of competition law. If the CMA
decides that there has been a breach of competition law, it can
impose a fine up to 10% of ESS's worldwide turnover, as well as
issue legally binding directions to bring the breach to an end.
- Interim measures are a set of actions that can be put in
place where the CMA suspects anti-competitive behaviour is taking
place and has an open investigation into this. They are put in
place as a matter of urgency to prevent significant damage to a
particular person or category of person, or to protect the public
interest in accordance with section 35 of the Competition Act
1998. For more information, see Guidance on the CMA's
investigation procedures in Competition Act 1998 cases: CMA8,
section 8.
- The competition legislation relevant to the CMA's
investigation is the Competition Act 1998. The Chapter II
prohibition in the Competition Act 1998 prohibits any conduct on
the part of one or more undertakings which amounts to the abuse
of a dominant position in a market, and which may affect trade
within the UK.
