Australian regulator clears Turnitin buyout of Ouriginal

Australia’s competition watchdog has decided not to oppose US-based Turnitin’s takeover of its European competitor Ouriginal.

The Australian Competition and Consumer Commission (ACCC) found that the proposed acquisition was “unlikely to substantially lessen competition” in the supply of anti-plagiarism software to Antipodean colleges and universities.

ACCC commissioner Stephen Ridgeway said his organisation had initially been concerned that the buyout would relieve Turnitin of a “significant and innovative competitor”, but it concluded that Ouriginal had only a “minimal presence in Australia, with few customers and no Australian-based employees”.

Consequently, the level of “competitive constraint” it imposed on Turnitin was no greater than that posed by the possibility that “other players”, such as Google and Microsoft, might start servicing the Australian higher education market.

The barriers preventing such players from entering the market were “unlikely to be prohibitive”, the regulator found, “and the proposed acquisition is unlikely to significantly raise these barriers”.

Mr Ridgeway said Turnitin’s current dominance of the market was “due largely to its superior technology and large database of previously submitted student papers and academic journals that are used to check submitted works for plagiarism”.

The ACCC also found that the proposed takeover was unlikely to impact research and development in text-matching tools. “Ouriginal does not appear to be driving innovation in anti-plagiarism software,” Mr Ridgeway said. “Turnitin’s incentive to innovate is primarily driven by competition from other providers, and this will continue following the proposed acquisition.”

The decision is likely to displease Australian universities and other higher education providers, with the Group of Eight among those opposing the takeover. Its September submission to the ACCC cited the “potential for higher prices and lower service quality” along with “concerns about reduced product innovation”.

ACCC opposition would not have prevented the takeover from proceeding, but it could have affected Turnitin’s activities in Australia following the buyout. The Competition and Consumer Act prohibits acquisitions likely to substantially reduce competition in any market, and the ACCC can take action against companies operating in Australia in breach of the act.

The UK’s Competition and Markets Authority (CMA) greenlighted the proposed merger in July, citing Ouriginal’s already limited presence in Britain. The CMA found that the UK anti-plagiarism software market was of “insufficient importance” to warrant a detailed investigation of the proposal.

john.ross@timeshighereducation.com