Break-out: 3D How competition law affects HE admissions – issues to consider

UCAS Admissions Conference, Tuesday 14 April 2014

John Holliday, UCAS Legal Counsel and Janet Graham, Director, SPA

SPAs mission and role

SPA promotes fair admissions and access to higher education in the UK by developing and leading on good practice in the recruitment and selection of students, to support HE providers.

SPA is an independent and objective Programme, funded by HEFCE, DELNI, SFC (for a contextualised admissions project), UCAS and Universities UK

We undertake desk and field based research, evaluate and commission research enabling us to develop evidence based good practice to support professionalism in HE admissions

Small team of 5, all with HE admissions experience, plus admin support.

“Equal opportunity for all individuals, regardless of background, to gain admission to a course suited to their ability and aspirations.”

What is Fair Admissions?

1. be transparent2. enable institutions to select students who are able to

complete the course as judged by their achievements and their potential

3. strive to use assessment methods that are reliable and valid

4. seek to minimise barriers to applicants5. be professional in every respect and underpinned by

appropriate institutional structures and processes

Aims of Session – and a Disclaimer ….

Raise Awareness

Stimulate Discussion, including on recent OFT Report

SPA cannot provide any legal advice, HE providers need to take their own advice

For many scenarios, cannot say what is “right” or “wrong”

BUT …. We can Make you aware of some of

the facts and background

Suggest some approaches to managing the risk

Make you aware of some areas where you may want to exercise caution and/or seek your own legal advice

Competition Law: The Facts

The Purpose of Competition Law is:

To promote and maintain vigorous competition

To deliver dynamic markets and enhanced productivity

To protect both businesses and consumers from activity such as price-fixing and capacity-fixing

Competition Law: The Facts An activity may be deemed anti-competitive if it has an

appreciable negative effect on competition e.g. Unreasonably restricts consumer choice

Artificially raises prices

Unfairly prices other similar businesses out of the market

This may be caused by: Businesses entering into an anti-competitive agreement (a “cartel”)

Businesses exchanging commercially confidential information, allowing their business strategies to become artificially aligned.

Office of Fair Trading

Office of Fair Trading Call for Information on Higher Education in England Oct - Dec 2013

Summary of findings and proposed next steps published March 2014

While this interest is specifically in England, the other countries of the UK are equally covered by the same Competition Legislation.

OFT’s stated interests include how universities decide what fees to charge, how students make well-informed choices and whether the application process may affect how universities compete

Note that the OFT’s interest is about consumer protection as well as competition (the two are related but not identical)

OFT Report March 2014 1

Note: the OFT was replaced by the Competition and Markets Authority (CMA) from 1 April 2014

Sector generally operating well in competition terms The current rules

preventing simultaneous applications to Oxford and Cambridge limiting main-cycle UCAS applications to five choices

have been deemed not sufficiently anti-competitive to pursue further ...

No evidence of price-fixing (in terms of tuition fees) found

OFT Report March 2014 2

Consumer protection issues (rather than competition issues) have emerged as the main concern

Issues for the admissions sector include:

Insufficient clarity of terms and conditions for enrolled students, including issues of how these are communicated to applicants *

Some lack of clarity in course information for applicants and students

On information/data sharing, the message is that this could infringe competition law where it “runs the risk of reducing the level of competition between institutions”... but examples of where this might or might not happen were not given

*SPA has circulated some information to HE providers on the admissions aspects

Sharing of information about future prices or places is presumed “anti-competitive”

Sharing of other types of Information can be illegal where they have the effect of restricting competition

Note that any restrictive effect : requires assessment of the market, type of information, frequency

and detail of information being shared of information exchanged may be outweighed by beneficial effects

e.g. benchmarking, good practice So could this apply if HEIs share confidential information on:

Plans for future capacity e.g. Courses to be discontinued or set up ...? Data on current courses / applicant numbers ...?

Information Sharing

Information Sharing ....

MAY be less risky if: It is already in the public

domain It is historical It is aggregated to a high level It is generic “best practice”

sharing.

WILL be more risky if: It relates to future plans It relates to charging certain

levels of fees or offering certain financial support.

It relates to which offers to accept and reject.

Capacity and number of places. Planned investments not in the

public domain

BUT .... Agreeing to restrict prices, places or innovation IS likely to be illegal

And don’t forget ....

There is no such thing as “Off the record ...” Legislation applies regardless of:

Setting Time of day Informal nature of your surroundings Whether discussions are oral or written

Scenarios 1

Two heads of admissions at comparableneighbouring universities are chatting over drinks in the evening following a conference.

They exchange views on the viability ofoffering degrees in humanities subjectsin the current climate, and one admits toplans to review humanities courses with a view to reducing provision in this subject area in the forthcoming years.

Scenarios 2

At a meeting of the admissions officersof a particular group of HE Providers in the early summer, Confirmation and Clearing is discussed.

The participants exchange ideas on how to help Confirmation run efficiently, and discuss the pros and cons of putting courses into Clearing

After the meeting, two or three of the officers discuss informally which courses they intend to put into Clearing at their university that summer.

More information from: Janet Graham or the SPA team

enquiries@spa.ac.uk or 01242 544891

www.spa.ac.uk

Thank you