The ACCC has outlined preliminary competition concerns with Global Payments Australia 1 Pty Ltd's proposed acquisition of School Bytes Learning Pty Ltd in a Statement of Issues published today.

"We are concerned that the proposed acquisition would be likely to substantially lessen competition in the supply of school information software and student finance software to NSW public schools," ACCC Commissioner Stephen Ridgeway said.

Global Payments' subsidiary, Sentral, and School Bytes both supply school administration software to NSW public schools.

Sentral and School Bytes are two out of three suppliers in NSW that offer a comprehensive range of school administration software, and because of their existing relationships with schools, they compete closely when cross-selling other categories of software.

The ACCC is also concerned that barriers to entry are high and it is difficult for schools to switch to completely new suppliers.

"The proposed acquisition would combine the two largest providers of student information software and student finance software to NSW public schools, significantly increasing concentration," Mr Ridgeway said.

"Post-acquisition, Sentral and School Bytes, would supply over 90 per cent of NSW public schools with student information software and student finance software."

"Although Global Payments intends to operate the businesses separately for some time, common ownership impacts incentives to innovate and compete regardless of any operational separation," Mr Ridgeway said.

The ACCC has received market feedback that has identified strong concerns about the impact of this proposed acquisition on schools.

While the NSW Department of Education can impose price increase limitations and minimum service level obligations on suppliers through existing panel arrangements, this is unlikely to provide the same constraint or deliver the same benefits to customers as competition generated by a significant rival supplier.

The ACCC is also concerned that the proposed acquisition will weaken price competition below the price caps during the term of the panel agreements, and when these agreements are re-negotiated, the price caps may be set higher than if the proposed acquisition did not occur.

The ACCC invites submissions in response to the Statement of Issues by 14 June 2024.

More information and the Statement of Issues is available on the ACCC's public register here: Global Payments Australia 1 Pty Ltd - School Bytes Learning Pty Ltd.

Background

Global Payments Australia 1 Pty Ltd is the Australian subsidiary of Global Payments Inc., a payments technology company headquartered in Georgia, USA.

Global Payments Australia 1 Pty Ltd is seeking to acquire School Bytes Learning Pty Ltd. Global Payments' subsidiary, Sentral Pty Ltd, and School Bytes both provide school administration software to NSW public schools.

Sentral supplies school administration software to public and independent schools throughout Australia. School Bytes only supplies school administration software to NSW public schools.

In November 2022, the NSW Department of Education established the Administration Marketplace Panel for Schools to regulate the supply of school administration software to NSW public schools. Both Sentral and School Bytes are approved under the AMPS to supply school administration software.

More information about the ACCC's preliminary competition concerns can be found in the Statement of Issues.

.

(C) 2024 M2 COMMUNICATIONS, source M2 PressWIRE