[A2k] Shuttleworth Foundation challenges textbook merger

[Andrew Rens]

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**The Shuttleworth Foundation is intervening in the application for approval
of a merger between two major publishing companies that would negatively
impact on education in South Africa by reducing the diversity and range of
textbooks.

An application has been lodged for the local merger of Heinemann and Maskew
Miler Longman publishers, resulting from the merger of their international
holding companies, Pearson PLC and Harcourt Education International. This
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 Shuttleworth
Foundation has chosen to intervene in the application with the intention of
preventing the merger from proceeding.

The initiative is being led by Diane Terblanche, a well known expert on
competition law. Papers were lodged with the local competitions authority on
Wednesday, 24 July. The Competition Commission has until 13 August 2007 to
decide on the merger.

"The Shuttleworth Foundation is not against the international merger of
Pearson PLC and Harcourt Education International as such,but agains the
effective local merger of South Africa's largest book publisher with another
large publisher" states Andrew Rens, Intellectual Property Fellow at the
Shuttleworth Foundation. Those parties have lodged an application for
permission to merge with the South African, UK and Caribbean authorities.
The South African Competition Act defines a merger to include control of
companies incorporated in South Africa vesting in a single company outside
South Africa. For the purposes of competition law the merger of Pearson and
Harcourt is a merger of Heinemann and Maskew Miller Longman, the two leading
publishers of textbooks in South Africa.

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 for 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 Shuttleworth Foundation met with
the competitions authority on Thursday, 26 July 2007 to further present the
case against this merger.

"This action must be considered in the context of educational rights,"
emphasises Rens. "South Africans have a right to education. A successful
merger of these two companies would negatively impact on South Africans'
access to adequate learning materials. We hope that this intervention will
set a precedent so that in future non profit organisations will challenged
mergers which are contrary to the public interest more frequently" explains
Rens.

Rens concludes that the desired outcome of this intervention would not only
be prohibition of the merger of Heinemann and Maskew Miler Longman
publishers, but also that the competition authorities further investigate
the school textbook market, which suffers from unnecessary complexity and
concentration which are barriers to education.

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


Andrew Rens, Intellectual Property Fellow; Shuttleworth Foundation;

See www.aliquinovi.org for more information.