The CMA is investigating whether education software company ESS
is abusing a dominant position to push schools into accepting a
new 3-year contract.
The investigation will assess concerns around a contract change
made by Education Software Solutions Ltd Group (ESS) – the
largest provider of school management information systems in the
UK. The company is requiring its customers to move from one-year
contracts to 3-year contracts and the CMA is considering whether
schools were given sufficient time to consider their options,
such as moving to an alternative provider instead of renewing
with ESS for the full 3 years. The CMA is concerned that this
change makes it more difficult for alternative providers to
compete with ESS to win business.
In the UK, most state schools are required to have a management
information system in place. These systems are used to handle
student information, such as attendance and safeguarding. Some
schools have told the CMA that the process for selecting an MIS
is often lengthy and can involve complex procurement steps.
The CMA will be considering all relevant issues, including the
concerns raised by schools and whether it should be imposing
interim measures while its investigation is ongoing.
Ann Pope, Senior Director of Antitrust at the CMA, said:
We have heard concerns regarding ESS’s contract changes.
Thousands of schools rely on management information systems and
their choice of supplier should not be restricted. The duration
of the ESS contract has been significantly extended and schools
should be able to pick the best provider for their needs.
While ESS has made some changes to its original position, such as
the introduction of a possible 6-month break clause, some schools
tell us this is still not enough time. A formal investigation
will allow us to consider this matter properly.
As part of its investigation, the CMA will also consider the
pricing of some ESS product packages – specifically, it will look
at how ESS’s management information system product is being sold
alongside its financial management software. This could encourage
customers to buy both products and deter customers moving away
from ESS.
The CMA is concerned that, by adopting such a pricing strategy,
market players that only offer one of these services may be
unable to compete, potentially leading to an uncompetitive market
in future.
More information is available on the Investigation into the
conduct of ESS case page.
Notes to editors
- No conclusion should be made that the law has been broken.
The CMA has made no decision that ESS’s contracts need to change.
- 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 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.
