Shuttleworth Foundation Intervenes in Competition Commission Decision

The Shuttleworth Foundation has expressed its satisfaction at the decisions taken by the competition commission in considering the possible merger of publishing companies Heinemann and Maskew Miller Longman Holdings.

The Shuttleworth Foundation is satisfied with the findings of and decision taken by the South African Competition Commission in the case of the possible merger of Heinemann and Maskew Miller Longman Holdings. On Monday 20 August 2007 the Competition Commission released reasons for its decision to impose conditions on the merger between international holdings companies Pearson PLC and Harcourt Education International.

In May 2007 the two publishing giants filed a merger application with the South African Competition Commission, as a consequence of an international deal. The application was required by South African law as Pearson and Harcourt both own South African publishing companies.

Pearson owns Maskew Miller Longman Holdings (Pty) Ltd (MML). Harcourt owns Heinemann Publishing (Pty) Ltd. (Heinemann). Upon successful application, Pearson would gain control of both MML and Heinemann, regarded as a merger in South African law.

“This merger would have resulted in negative consequences for education in South Africa,” says Andrew Rens, Intellectual Property Fellow for The Shuttleworth Foundation. “There are only five big players dominating the local textbook market. This negatively impacts on not just the prices of textbooks, but also on variety, availability, local content and sustainability. It is vital to effective education that diversity and variety of books is maintained, especially at school level.”

The Shuttleworth Foundation intervened in the merger proceedings, making submissions to the Competition Commission raising public interest concerns. The submission focused on the integration of MML and Heinemann likely to follow the international merger.

The Competition Commission agreed to the merger of international companies Pearson and Harcourt, subject to the condition that the local companies do not merge or integrate their business functions.

In its reasons, the Commission ‘considered that should the merged entity reduce the number of book titles in the market, this may have the affect (sic) of reducing choice and variety in the market.’

“The Shuttleworth Foundation is pleased that the commission has taken the concerns which we raised into account,” says Rens. “The commission's ruling prevents further consolidation in the textbook publishing market as a result of the international merger. But the Foundation remains very concerned about the market as a whole.”

“The entire publishing industry should be the subject of an in depth investigation by the Competition Commission,” he adds, “since, despite this ruling, the local industry remains too consolidated. The printing houses are controlled by large publishers. Even if new players win a publishing contract they are in the power of the companies that control the presses, making it almost impossible for new players to enter the market. ”

The Shuttleworth Foundation therefore remains committed to monitoring the local publishing environment while continuing to research solutions to the current challenges facing South African education.

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Note to Editor

For additional commentary and insight please feel free to contact:

Andrew Rens | Shuttleworth Foundation
+27 21 970-1200 |

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Press Contact

Renee Conradie | Emerging Media Communications
+27 11 792-4378 |

Craig Rodney | Emerging Media Communications
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