- CMA suspects ESS may have been trying to retain customers by making it difficult for them to switch providers ahead of contract renewal dates
- CMA received complaints from schools and local authorities about ESS' alleged behaviour - and is aware of widespread concerns in the education sector
- CMA: "We're concerned about the complaints we've received regarding ESS's alleged behaviour"
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.
