Home Education Higher Education Institutions in the EU: Between Competition and Public Service
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. 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. 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. 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. Indeed, the OFT has, inter alia, raised concerns about ‘UCAS’ corporate governance and the extent to which all institutions have access to its services’. It is now apparently planned that HEIs from other EU Member States can become part of UCAS, though currently this still appears to be under the section ‘alternatives to higher education’ rather than in the normal system.
In the USA the accreditation of, in particular legal, education has been discussed widely in the context of its compatibility with the Sherman Act. Indeed, there have been some privately initiated cases against legal and other educational accreditation agencies, which have, however, not been successful. A case by the US Department of Justice against the American Bar Association (ABA), 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’, 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. 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’. 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)’. The CMA in its evaluation also acknowledged that differences in information offered makes it more difficult to compete for providers. 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 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).
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.
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