Foundation moves against media merger

An application has been lodged for the local merger of Heinemann and Maskew Miller Longman publishers, resulting from the merger of their international holding companies, Pearson PLC and Harcourt Education International. The foundation believes the potential merger raises concerns surrounding the negative impact it would have on the local textbook market in terms of pricing, diversity, relevance, local content and local language availability. As such, the foundation has chosen to intervene in the application with the intention of preventing the merger from proceeding.

Diane Terblanche, a well-known expert on competition law, is leading the initiative. Papers have been prepared which were lodged with the local competitions authority on Wednesday, 24 July.

“The Shuttleworth Foundation is not against the international merger of Pearson PLC and Harcourt Education International as such,” states Andrew Rens, Intellectual Property Fellow for the foundation. “But the resulting local merger of Heinemann and Maskew Miller Longman would have a negative impact on education in the South African context and must be prevented.”

He explains that a successful merger would drive greater concentration of an already over-concentrated local publishing industry for educational materials.

“There are only five big players dominating the local textbook market,” says Rens. “This has negative consequences, not just on 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 a school level.”

Following the submission of documents, the foundation met with the competitions authority on Thursday, 26 July 2007 to expand on the case against this merger.

“This action must be considered in the context of educational rights,” emphasises Rens. “South Africans have the right to stand against big companies in protecting their other rights in terms of education. A successful merger of these two companies would negatively influence South Africans' access to adequate learning materials. “We hope that this intervention will set a precedent so that in future non-profit organisations will challenge mergers which are contrary to the public interest more frequently,” he says.

He says concludes that the desired outcome of this intervention would not only prohibit the merger of Heinemann and Maskew Miller Longman publishers, but also prompt the authority to further investigate the school textbook market, which suffers from unnecessary complexity and, in its current form, he believes creates barriers to education.

The Open Society Institute, dedicated to strengthening democracy, is supporting and co-funding the intervention.