Global Payments’ proposed takeover of School Bytes raises concerns: ACCC

Global Payments Australia’s proposed takeover of School Bytes Learning has raised concerns from competition watchdog the ACCC.

“We are concerned that the proposed acquisition is likely to significantly reduce competition in the provision of school information and student finance software to public schools in New South Wales,” he added.

ACCC Commissioner Stephen Ridgeway it said, raising initial concerns about competition with Global Payments subsidiary Sentral and School Bytes, which “both provide school administration software to public schools in New South Wales.”

“Sentral and School Bytes are two of three providers in New South Wales that offer a comprehensive range of school administration software and, due to their existing relationships with schools, compete closely with each other on cross-selling other software categories,” the ACCC notes.

The ACCC is also concerned about high barriers to entry and schools finding it difficult to switch to completely new suppliers.

“The proposed acquisition will combine two of the largest providers of student information and student finance software to public schools in New South Wales, significantly increasing concentration,” Commissioner Stephen Ridgeway said.

“Following the acquisition, Sentral and School Bytes will provide more than 90 per cent of New South Wales public schools with student information and student finance software.

“While Global Payments intends to operate these businesses separately for some time, shared ownership impacts incentives to innovate and compete regardless of operational separation,” Ridgeway said.

The ACCC said it had received market feedback which showed “significant concerns about the impact of the proposed takeover on schools”.

“While the NSW Department of Education may impose price increase restrictions and minimum service level obligations on suppliers under existing panel arrangements, this is unlikely to provide the same restrictions or provide the same benefits to customers as competition generated by a significant competitive 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, in the event of renegotiation of those agreements, the price caps may be set at a higher level than if the proposed acquisition had not occurred,” the commission said.

The ACCC has invited submissions in response to the Statement of Issues by 14 June 2024, and more information and the Statement of Issues can be found on the ACCC public register here: Global Payments Australia 1 Pty Ltd – School Bytes Learning Pty Ltd.