🗞️ACCC Voices Preliminary Concerns Over Global Payments-School Bytes Deal

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With the planned acquisition of School Bytes Learning Pty Ltd by Global Payments Australia 1 Pty Ltd, the ACCC has raised some preliminary competition concerns in a Statement of Issues that was released today. "We are concerned that the proposed acquisition would likely result in a significant reduction of competition in the supply of student finance software and school information software to public schools in NSW," stated Stephen Ridgeway, Commissioner of the ACCC.Public schools in NSW are served by Sentral, a subsidiary of Global Payments, and School Bytes, which provide school administration software. Sentral and School Bytes are two of the three providers in NSW that provide an extensive selection of software for school administration. Due to their established connections with schools, they are in direct competition with each other when it comes to cross-selling other software categories. Concerns about high entry barriers and the difficulty of schools switching to entirely new suppliers are also shared by the ACCC.

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“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.

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