School software provider under investigation by UK competition watchdog

An education software provider is being investigated by the UK competition watchdog over allegations that it tried to stop schools from switching to rivals.

The Competition and Markets Authority (CMA) said it suspects that Education Software Solutions (ESS) may have been abusing its dominant market position by making it difficult for schools to change providers ahead of contract renewals.

It follows complaints from a number of schools and local authorities to the CMA, with the regulator revealing that it is aware of “widespread concerns” in the education sector over the alleged behaviour, according to the CMA.

ESS is the UK’s largest provider of management information systems – used to handle student information such as attendance and safeguarding – with a share of around half of the market in England and even higher across Wales and Northern Ireland.

ESS is owned by ParentPay – the Coventry-based payment platform for schools.

The CMA said schools have reported that ESS is warning them they would not be able to share a copy of their database with a new provider, claiming it would breach ESS’s intellectual property rights, despite being an established practice in the sector.

The regulator said that without being able to share this, schools may find their ability to move to a new provider “severely hampered”.

Where ESS is allowing some means of switching, they are said to be “complex, time-consuming and error prone”, according to the CMA.

Schools have told the CMA that ESS is also objecting to the alternative solutions put forward to enable the extraction of their data.

It is investigating whether ESS has broken competition law with the alleged behaviour.

Juliette Enser, interim executive director of competition enforcement at the CMA, 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.”

The CMA said it may look to put in place interim measures to protect schools while its investigation is ongoing.

A previous investigation by the CMA into ESS looked into whether the firm was trying to push schools into taking out three-year contracts, where they had previously run for a year.

This saw ESS offer the CMA commitments in 2022 allowing schools to exit their contracts early.

The CMA continues to monitor whether ESS is complying with the promises made as part of this separate previous investigation.

ESS said the CMA announcement over its latest probe “overlooks the fact that there are legitimate methods of migrating data … to the systems provided by our competitors”.

A spokesman for the firm said: “Guidance on these methods has long been available and we have made multiple communications to competitors, customers (and their support providers) explaining this.

“That some competitors have chosen to ignore these methods and have instead created a “workaround” that accesses our core code, is the only abuse in this situation.

“It simply cannot be correct that the only way to sustain a competitive market is for one organisation to be forced to allow its competitors open access to its core intellectual property, which it has invested large amounts of time and money in developing.”