Market Foreclosure or Disturbance

Another example where HEIs might infringe Article 101(1) TFEU is if they cooperate in bodies which essentially define who can enter (a significant part of) the market such as accreditation or quality assurance agencies for teaching and research or bodies distributing study places. These could, if consisting mainly of experts from within HEIs, be regarded as making a decision by an association of undertakings foreclosing (parts of) the market and preventing access to newcomers. If such bodies themselves conducted an economic activity and are thus undertakings, this could be regarded as a vertical cartel.[1] Even if such bodies are foreseen in national law, this could still fall under the prohibition of Article 101(1) TFEU if read in conjunction with Article 4(3) TEU.

A body distributing university places could, for example, be regarded as an association of undertakings. If this association only allows certain HEIs to be registered within it (for example, only national ones) and thus only allocates places to them, this forecloses the market to newcomers. The case of Maastricht University applying for registration in the British Universities and Colleges Admission Service (UCAS) has, for example, been discussed in the press.[2] The request was, according to the Sunday Times, turned down because Maastricht University is not British. The article further reported that Maastricht University planned to challenge the decision under EU law, as it constitutes discrimination.[3] It might also be conceivable, though it is difficult to specify without knowing the details of this case, that such arrangements could be challenged under Article 101(1) TFEU or Article 4(3) TEU in conjunction with Article 101(1) TFEU, if bodies such as UCAS are required by a state measure.[4] Indeed, the OFT has, inter alia, raised concerns about ‘UCAS’ corporate governance and the extent to which all institutions have access to its services’.[5] It is now apparently planned that HEIs from other EU Member States can become part of UCAS,[6] though currently this still appears to be under the section ‘alternatives to higher education’ rather than in the normal system.[7]

In the USA the accreditation of, in particular legal, education has been discussed widely in the context of its compatibility with the Sherman Act.[8] Indeed, there have been some privately initiated cases against legal and other educational accreditation agencies, which have, however, not been successful.[9] A case by the US Department of Justice against the American Bar Association (ABA),[10] however, ended in a consent decree in which the ABA consented to refrain from specific accreditation practices. In particular, they consented to accredit for-profit institutions on equal terms. Therefore, while there is some support for applying stricter rules to for-profit HEIs in the sector in order to ‘mitigate the extra risk posed by for- profit corporate forms’,[11] the US case implies that accreditation practices are not beyond the reach of competition law and may require equal treatment. Again, even if accreditation is foreseen by national law, this might, in EU law, be challengeable under Article 4(3) TEU in conjunction with Article 101(1) TFEU.

However, such bodies might disturb the market beyond preventing access completely. UCAS has made it into the press again when it decided not to publish university application figures believing this to be anti-competitive.[12] It was alleged that publishing the figures would lead to a competitive disadvantage for some HEIs since the figures ‘could be overinterpreted by both institutions and applicants, and give rise to unintended markets effects’.[13] Whilst publishing such information might indeed have a negative effect on certain institutions, it might also, as a student organisation has argued, enhance consumer protection to have the relevant information available. Furthermore, while it may be anti-competitive to exchange and make publicly available certain kinds of sensitive information such as future pricing intentions, an unequal provision of information may also raise anti-competitive concerns. The OFT in this regard pointed to ‘the way in which UCAS information is integrated with other sources of information available to students, and the extent to which applications data is available to others (including alternative choice tool providers)’.[14] The CMA in its evaluation also acknowledged that differences in information offered makes it more difficult to compete for providers.[15] In addition to UCAS, the OFT more widely mentions issues with (self-)regulatory bodies in England (e.g. the Higher Education Funding Council for England (HEFCE) or the Quality Assurance Agency (QAA)), since they partly offer certain service only to certain providers or charge different fees[16] and the CMA equally points to various issues in regards to market access arising from regulation (access to generic funding, degree awarding powers, course designation, ability to sponsor visas, scrutiny by the QAA and different sanctions).[17]

Overall the above shows that competition law can have potential effects on the bodies regulating teaching or research activities. Yet, the opening of such institutions to every interested HEI from every Member State could put a significant strain on the national systems. This would particularly cause problems if such institutions are publicly funded. Additionally, potential judicial reviews of accreditation standards under competition law might lead to lower quality and a further opening of education systems to private providers. In some cases, of course, an exemption might apply, but the English example shows that, inter alia, the competition law assessment by OFT and CMA have already led to the suggestion of far more commodification in the planned reforms.[18]

  • [1] For example, see 107/82 AEG (Judgment of 25 October 1983, EU:C:1983:293) para 35seq. The case concerned a distribution network which is, as such, not incompatible with Article101(1) TFEU, if any undertaking, which wishes to do so and which fulfils objective qualitative criteria, can enter the network. However, if undertakings which meet the qualitative criteriaare prevented from entering, this does constitute an infringement. It is regarded as collusion, asthe acceptance of the conditions by the participating undertakings is seen as approval. See alsoHorspool and Humphreys 2014, p. 398 seq.
  • [2] See Grimston J and Winch J (2010) Maastricht University is fighting for a listing in order toattract British students. The Sunday Times, 24 October 2010 News: 4. There does not seem to beanything available on the case since initial press coverage.
  • [3] This might probably have referred to the free movement of services, but the article is notvery precise here and also talks about effects on competition. A challenge under the free movement provisions would imply that UCAS would be regarded as part of the Member State (theUK) which discriminates against foreign service providers. Higher education would thus have tobe regarded as a service in the meaning of the free movement provisions (see Chap. 2, Sect. 2.3.2above).
  • [4] On the market foreclosure scenario see Gideon 2012, p. 179.
  • [5] OFT 2014, para 1.10. See also ibid para 7.28 seq.
  • [6] Ward L (2015) European universities to be part of Ucas admissions. The Guardian, 17February 2015 Accessed 8 April 2016.
  • [7] See the subsection ‘studying overseas’ in the section ‘alternatives to higher education’ on theUCAS website:
  • [8] For an evaluation of accreditation agencies under US American antitrust law see Havighurstand Brody 1994. For an evaluation of legal education accreditation under the Sherman Act seeFirst 1979; Lao 2001; Areen 2011.
  • [9] See those discussed in First 1979, p. 1062, p. 1080, Havighurst and Brody 1994, pp. 201, 203and Lao 2001, p. 1037.
  • [10] Competitive Impact Statement, United States v American Bar Association, No. 95-1211(CR)(D. D. C. 1996). In this case the fixing of salaries and working conditions had also been challenged and was amongst the conduct the ABA had to agree to stop in the consent decree (Sect. IA). In Europe such problems seem less likely due to different labour law traditions and a cautious approach by the European judiciary in this respect (see Monti 2007, p. 96 seq). For more onUnited States v American Bar Association see Lao 2001, p. 1037 seq; Areen 2011, p. 1487 seq.
  • [11] UCU (2012) UCU politics monthly—June 2012—Response to HE consultation. Accessed 29 June 2012.
  • [12] Morgan J (2013) Ucas withholds 2013-14 application data. THE, 14 February 2013 Accessed 17 April 2013.
  • [13] Ibid.
  • [14] OFT 2014 para 1.10. See also ibid para 7.28 seq.
  • [15] CMA 2015, para 6.9.
  • [16] OFT 2014, para 7.26 seq, 7.36 seq.
  • [17] CMA 2015, para 5.2 seq.
  • [18] Some of the issues mentioned in this section have been addresses in the UK government’srecent Green and White Paper where plans are expressed to level the playing field. Yet, there stillappear to be certain differences remaining. See further BIS 2015, 2016.
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