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Combination of Magister by Malmberg requires further investigation

17-04-2019

Sanoma Learning, owner of publisher Malmberg, wishes to acquire Iddink, a Dutch educational platform and service provider. One of Iddink’s products is Magister, a learning management system (LMS). The Netherlands Authority for Consumers and Markets (ACM) has come to the conclusion that a further investigation into the effects of this planned acquisition is required.

Both companies wish to capitalize on the digital developments at schools

Through Malmberg, Sanoma Learning publishes educational materials (including digital) and tests. Among other activities, Iddink distributes educational materials (including digital). For secondary schools, Iddink offers Magister, which is one of the most used LMSs in the Netherlands. Through its e-learning portal, Magister offers students and teachers access to digital educational content offered by various publishers, such as Malmberg. The two firms argue that their combination would create opportunities to have the digital educational content dovetail better with the digital learning platforms of schools.

Combination of digital educational content and learning management system may restrict competition

ACM’s investigation has revealed that over half of all secondary schools in the Netherlands use Magister. Generally speaking, schools do not switch LMSs easily. And digital educational content continue to become more and more important as a result of the ongoing digitalization. ACM wishes to assess whether other providers of digital educational content will have fewer opportunities to offer their educational materials to students because of the acquisition. This could be the case if access to Magister became more difficult for other publishers. In addition, ACM wishes to assess whether or not other publishers get access to data that Magister and Malmberg will have after the acquisition. That may hinder the full functioning of the market for educational materials, and may also stifle innovation in that market. Various market participants have expressed their concerns about such a scenario to ACM.

What are the next steps?

Sanoma has indicated it will apply for a merger license. Following that application, ACM will launch a follow-up investigation into the possible effects of this planned acquisition among schools and other undertakings involved.

What does ACM do with mergers and acquisitions?

ACM assesses in advance whether businesses that wish to join forces do not become too powerful. This has been laid down in the Dutch Competition Act. The objective of that act is to protect people and businesses against higher prices, lower quality, and/or reduced innovation.