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Competition watchdog closes investigation into education software provider following “development in the market”

The Competition and Markets Authority (CMA) has closed its investigation into leading education software provider ESS (Education Software Solutions Ltd) after concluding that developments in the market have meant its intervention is “not currently needed”.

In May this year, the watchdog announced an investigation into whether ESS had broken the law by taking action to prevent schools from switching to a new management information system provider ahead of contract renewal dates.

Denying any abuse, ESS, 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, said it was “extremely surprised” by what it characterised as a “sudden announcement”.

Management information systems are databases used to handle student information, such as attendance and safeguarding, and most UK schools are required to have these databases in place.

Schools had reported to the watchdog that ESS had warned them not to share a copy of their database with a new provider, as doing so would breach ESS’ intellectual property rights.

Schools also informed the CMA that sharing database copies is a longstanding and widespread practice used in the sector for data transfer of this kind – a practice ESS stated it was unaware of.

The CMA said it was concerned that “without a viable method of sharing data, schools’ ability to move to a new provider would be hampered”. 

Since the launch of its investigation, the CMA said it has gathered and analysed a “significant amount of evidence”, as well as engaging with the sector, schools, and ESS itself. 

The watchdog found that:

  1. A considerable number of schools have managed to switch from ESS to new providers  
  2. ESS’ share of the MIS market in England is declining, falling from approximately 50% to 46% in just a few months, while the share of its main competitor – The Key Group – has increased to a similar level at around 41%  
  3. Competitors and third parties have been developing ways to migrate schools’ data using tools that do not raise IP concerns with ESS – these methods are less burdensome on schools, less error-prone than previous options (and remove the need for sharing copies), and are expected to be operational in advance of any March 2025 contract renewals 

Due to the above developments, the watchdog announced yesterday (29 August) that its 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”.

Responding to the CMA's announcement, ESS said it believed that the investigation had been prompted by competitors and that there had been unlawful use of the company's intellectual property.

Lewis Alcraft, Group Chief Executive of ESS, said: “Certain of our competitors complained to the CMA that the SIMS APIs [Application Programming Interfaces] were too ‘complex, time consuming and error prone’ to be usable. That this was untrue is now evident from the fact that these same competitors are now using, or proposing to use, these APIs to undertake migrations, a method which in the words of the CMA is ‘less burdensome’ and ‘less error prone’ than using copies of the SIMS database."
 
ESS said it was considering what action should be taken regarding any misuse of its intellectual property now that the CMA’s investigation has been closed.
 
"ESS has no wish to impede schools from switching to alternative suppliers provided this is done lawfully," it added.
 
"To that end, ESS calls upon 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 APIs."

Lottie Winson