The competition watchdog has closed a probe into England’s largest school management information system provider, saying intervention is “not currently needed”.
The Competition and Markets Authority launched an investigation into Education Software Solutions, which runs School Information Management System (SIMS), in May.
It was looking into concerns ESS could be “abusing” its “dominant” market position.
But the CMA announced today that developments in the MIS market meant the case “no longer constitutes an administrative priority”.
In a post on its website, ESS claimed it had been the victim of “vexatious” complaints.
The probe came after Schools Week revealed the firm told its school customers they would be breaching their contracts if they sent copies of their databases to third parties.
Intervention ‘not needed’
The CMA previously said it was concerned schools’ ability to move to a new system would be “severely hampered” by the move, as the alternatives were said to be “complex, time consuming and error prone”.
Schools also told the CMA that sharing database copies was a “longstanding and widespread practice used in the sector for data transfer of this kind”.
However, ESS said it was “unaware” of this practice, the watchdog said.
The watchdog today announced it had closed the case, as “developments in the market meant its intervention is not currently needed”.
ESS’s share of the MIS market for state-funded school in England is also declining, dropping form 50 per cent to 46 per cent in “just a few months”, the watchdog noted.
The CMA also noted that the share of ESS’s “main competitor”, The Key Group, had increased to about 41 per cent.
Its investigation also found that a “considerable number” of schools had managed to switch from ESS to new providers.
New ways to migrate data developed
Competitors and third parties have also been developing ways to migrate schools’ data using tools that do not raise intellectual property concerns with ESS, the CMA added.
It said the these methods were “less burdensome on schools, less error-prone than previous options (and remove the need for sharing copies)”.
They are expected to be up and running ahead of contract renewals in March.
The CMA therefore concluded that intervention is “not required at this time, and that continuing to probe the firm would be unlikely to have further positive impact on the sector”.
It concluded that further investigation “could have only a limited market impact”.
ESS ‘considering what action to take’ over ‘any misuse’ of IP
But the watchdog stressed this does not constitute a decision as to “whether the Chapter II prohibition of the Competition Act has been infringed”.
This refers to the Competition Act 1988, which sets out what conduct amounts to a prohibited abuse of a dominant position in a market in the UK.
It added that its decision to “close the case on grounds of administrative priority does not prevent, pre-judge or fetter the CMA’s ability, if appropriate, to open an investigation
under the Chapter II prohibition in future, or to take action using its other tools”.
ESS said it was now “considering what action should be taken regarding any misuse of its intellectual property now that the CMA’s investigation has been closed”.
In a post on its website, it added that it had “no wish to impede schools from switching to alternative suppliers provided this is done lawfully”.
But it called on “any school that intends to transfer data to a new supplier not to be persuaded into handing over backup copies of the SIMS database as part of this exercise, noting that to do so would be a breach of the school’s licensing agreement with ESS”.
Schools should instead “insist” that any new supplier uses the SIMS Application Programming Interfaces, ESS said.
ESS said it provides a “safe and authorised method” to transfer data from SIMS through the APIs, which “preserve the integrity of data extracted and are widely used”.
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