• CMA information update

    10 January 2023



    On 10 January 2023 the CMA announced that it was closing the first part of its investigation into ESS’ conduct in relation to its move from one-year to three-year Annual Entitlement agreements. This follows on from the CMA’s announcement of 27 October 2022 that it was closing the second part of its investigation into the pricing of FMS and SIMS.



    ESS welcomes these decisions, which were both arrived at on a ‘no fault’ basis.  This is consistent with the position ESS has maintained throughout the investigation, namely that it has acted properly at all times.

    For media enquiries, please contact mediaenquiries@parentpay.com

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    17 November 2022

    In early November 2021 ESS notified its SIMS management information system (“MIS”) customers with one-year Annual Entitlement contracts of its intention to move to three-year terms, 5 months before these one-year contracts were due for renewal.  In addition, in mid-January 2022 ESS offered these customers the option of a 6-month break clause in their new three-year agreement if they applied for this option before 20th February 2022 (the “Original Break Clause Offer”). 

    Customers opting to take up ESS’ Original Break Clause Offer had until 30th September 2022 to move away from SIMS if they wished to do so, 11 months after ESS first informed customers of the change in its contract terms and 8.5 months after ESS first made the Original Break Clause Offer available.

    On 27 April 2022 the CMA announced that it was investigating whether:

    • in relation to ESS’ move from one-year to three-year Annual Entitlement agreements, schools were given sufficient time to consider their options; and
    • the pricing of ESS’ financial management software FMS and its management information system SIMS deterred customers from moving away from ESS.

     

    In July 2022 ESS unilaterally made three further break clause offers to customers with new three-year Annual Entitlement agreements, the second of which (the “Group 2 Offer”) gave a new one-year break clause to any customer who could provide objective evidence that they had a clear intention to switch to an alternative MIS, but who had not opted to take the Original Break Clause Offer because they had reasonably concluded they would be unable to switch to an alternate MIS by 30th September 2022.

    On 27th October the CMA announced that it was closing the second part of its investigation into the pricing of FMS and SIMS.  Today the CMA has announced that, subject to consultation, it also proposes to close the first part of its investigation in return for ESS agreeing to make a new break clause offer (the “New Break Clause Offer) based on the Group 2 Offer, in which:

    • the New Break Clause Offer will be available to customers who opted to take the Original Break Clause as well as those who didn’t;
    • applications will be assessed by an independent adjudicator rather than ESS; and
    • the conditions for the offer are clarified, with the requirement in the Group 2 Offer for applicants to provide ‘objective evidence of a clear intention to switch’ modified to require applicants to show that they genuinely considered switching to an alternative supplier but reasonably concluded it was not possible to do so by 30th September 2022.

    The CMA’s consultation on the New Break Clause Offer will close on 8th December 2022.  If the CMA agrees to accept the commitments, it will close its investigation in return for ESS making the New Break Clause Offer available for a limited period to those of its customers who entered into new three-year Annual Entitlement agreements on or before 31st March 2022.

    The closure of the investigation will be on a ‘no fault’ basis, which is consistent with the position ESS has maintained throughout the investigation, namely that it has acted properly at all times.

    What is ESS doing?

    ESS is engaging fully with the CMA as it conducts this review and continuing to operate on a business-as-usual basis, in support of customers and partners. 

     

    How do I find out the latest on the CMA investigation?

             

    ESS will issue updates as appropriate on this page.  

     

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    27 April 2022

    Following the CMA’s announcement today, we wanted to provide further information for our customers and partners.  Whilst we are limited as to the level of detail we can share at this stage, we can confirm the following: 

     

    Why is the CMA investigating ESS?

     

    The CMA is required to consider views from a broad range of stakeholders, including customers and competitors, as part of its day-to-day work.

     

    In this case, the CMA has chosen to investigate whether, in relation to ESS’s move from one-year to three-year agreements, schools were given sufficient time to consider their options.  It is additionally looking at how ESS’s management information system product is being sold alongside its financial management software.

    ESS believes it has acted properly and has constructively addressed the CMA’s concerns. ESS is confident that when the CMA completes its information gathering it will reach the same conclusion. 

     

    It should be noted that the CMA has stated in its announcement that “The CMA has made no decision that ESS’s contracts need to change”.