Government regulator to investigate ESS moving schools on to three-year contracts

The Competition and Markets Authority (CMA) is investigating whether education software company ESS is abusing a dominant position to push schools into accepting a new three-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 three-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 three years.

The CMA said it was 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 sitting at a deskAnn 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 https://www.gov.uk/cma-cases/investigation-into-conduct-of-education-software-solutions-limited