The CMA is consulting on proposals from ESS to allow schools to
escape longer-term software contracts due to concerns that the
lack of notice given to them limited their choice and
competition.
Education Software Solutions Limited (ESS) is the largest
provider of school management information system (MIS) software
in England and Wales. In the UK, most state schools are required
to have an MIS in place to handle information on staff and
students including for handling attendance and safeguarding.
In April 2022, the Competition and Markets Authority (CMA) opened
an investigation into whether ESS’ conduct was anti-competitive
by effectively limiting schools’ ability to choose an MIS
software provider and excluding its competitors. The CMA was
concerned about ESS providing that its customers – schools in
England and Wales – must move to three-year contracts, from their
previous one-year contracts, without giving them sufficient time
to make alternative arrangements with other software providers.
The CMA was concerned that these changes reduced schools’ choice
of MIS software provider and made it difficult for other
providers to compete with ESS to win business.
ESS has offered to give legally binding assurances, known as
commitments, which would enable certain schools – broadly those
schools which had been given insufficient time to switch
providers – to apply to an independent adjudicator for a new
break clause to allow them to escape their current three-year
contract with ESS and choose alternative providers.
If the CMA accepts commitments, that does not itself entail a
finding that the business giving the commitments has breached
competition law, and in this case the CMA notes that ESS
maintains that its behaviour was not anti-competitive.
The CMA considers that the proposed commitments address its
competition concerns by giving affected schools the choice to
exit their current three-year contract and switch to another MIS
supplier, facilitating competition.
It is now inviting comments from schools, and others likely to be
affected by the commitments, including on the eligibility
criteria to apply for the new break clause and on any matters
that may affect the effective implementation of the proposed
commitments – for example, on the application form to be used. If
accepted by the CMA, the commitments would bring the
investigation to an end.
Further details about how to respond to this consultation are set
out in the notice of the proposed commitments issued by the CMA
today. Comments on the proposed commitments should be received by
no later than 5.00pm on 8 December 2022.
Further details about the CMA’s investigation can be found on the
case page.
Notes for editors
- The competition legislation relevant to the CMA’s
investigation is the Competition Act 1998 (the Act). The Chapter
II prohibition in the Act 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.
- On 26 April 2022, the CMA launched an investigation into a
suspected breach of competition law – a suspected abuse of
dominance – in the supply of MIS software in the UK by ESS.
- Where the CMA has begun an investigation under the Act, it
may accept commitments for the purposes of addressing the
competition concerns it has identified. If the CMA proposes to
accept the commitments, the CMA will consult third parties who
might be affected by these commitments and allow them an
opportunity to give their views to the CMA. The CMA will consider
any such views before deciding finally whether or not to accept
the commitments.
- Formal acceptance of commitments would result in the CMA
ending its investigation and not proceeding to any decision on
whether ESS has infringed the Act.
- The CMA has also considered whether or not to grant interim
measures, under section 35 of the Act, in relation to this case.
Formally accepting commitments, bringing the concern to an end,
would make it unnecessary to make any interim measures directions
in this case.
