The ACCC has preliminary competition concerns with Turnitin's proposed acquisition of Ouriginal.
Turnitin and Ouriginal are international providers of anti-plagiarism software, primarily overlapping in the supply of this software to higher education customers, such as universities. They make up two of only three anti-plagiarism software providers to Australian universities.
Anti-plagiarism software is a tool used to scan student assignments on submission to identify possible plagiarism. The software may check for matches against previous student submissions, academic journals and web pages through their respective databases.
"Turnitin is by far the largest provider of this software to Australian universities. It holds a large, cross institutional database of reference material, including a significant number of student papers and academic journals that are used to check submitted works for plagiarism," ACCC Commissioner Stephen Ridgeway said.
The ACCC is concerned that the proposed acquisition will substantially lessen competition in an already highly concentrated market and may lead to higher prices or reduced service levels for the Australian higher education sector.
"Ouriginal, which is a large supplier in Europe, has far fewer customers in Australia than Turnitin. However, it is one of Turnitin's only competitors in the higher education sector and may develop into an important competitive constraint on Turnitin," Mr Ridgeway said.
"Some stakeholders have suggested to us that Ouriginal is cheaper and may have a more innovative product compared to Turnitin."
The ACCC is also considering the likelihood of other international software providers entering or expanding in Australia to compete with Turnitin. These providers appear to face various challenges to compete for Australian customers, including building a database of student papers and overcoming customers' reluctance to switch to new or unknown providers.
"Barriers to entry appear to be high in this market, with strong network effects and economies of scale being enjoyed by Turnitin. What we are focussing on here, is whether Turnitin is buying out its most promising competitive threat to protect its market position," Mr Ridgeway said.
"Other than Blackboard's SafeAssign, no other anti-plagiarism software companies have established a competitive presence in our higher education sector to date, particularly among universities."
The ACCC is also concerned that the proposed acquisition may reduce incentives for Turnitin to innovate with its products without future competition from Ouriginal.
"Decisions to innovate will likely be made on a global level and consider a broader range of competitors that do not currently operate in Australia. If the incentives to innovate are reduced globally, Australian customers may be negatively impacted," Mr Ridgeway said.
The ACCC has published a statement of issues, available on the public register page, and is seeking further information.
The ACCC is inviting feedback on the statement of issues by 27 September 2021.
Further information is available on the ACCC's public register here: Turnitin, LLC, via Turnitin UK Ltd., proposes to acquire Ouriginal Group AB
Background:
Turnitin provides educational software solutions including plagiarism detection, grammar checking, grading and exam proctoring in many countries including Australia. Ouriginal focuses on plagiarism detection. It is largely active in Europe, and recently in parts of Asia.
Anti-plagiarism software is designed to detect plagiarism in its various forms. In Australia, it is primarily used in the education sector to address risks of plagiarism and thereby assist in maintaining academic integrity.
Anti-plagiarism software detects plagiarism by comparing a piece of work against sources which may be private (e.g. databases of previous student submissions and academic journal articles) or public (e.g. webpages). Anti-plagiarism software providers are also developing tools to respond to newer forms of plagiarism, such as contract cheating or ghost writing.
The UK's Competition and Markets Authority cleared the proposed acquisition on 26 July 2021.
'Higher education' primarily refers to Australian universities and institutions registered by the Tertiary Education Quality and Standards Authority (TEQSA). The ACCC understands that only a small proportion of vocational training organisations, which are registered by the Australian Skills Quality Authority (ASQA), would use anti-plagiarism software.
Turnitin LLC is based in the USA, but is seeking to complete this acquisition via Turnitin UK Ltd (Turnitin). Ouriginal, based in Sweden, was formed from the merger of Urkund and PlagScan in 2019.
