2.2 The CMA seeks to empower consumers to exercise informed choice, using both competition and consumer powers to help markets work well. Good consumer outcomes rely on competitive markets to provide choice and value, while vibrant competition relies on consumers confidently shopping around.
2.3 The CMA uses its full range of consumer powers to tackle, in particular, market-wide consumer problems or issues which affect consumers’ ability to make choices.
2.4 The CMA has powers to enforce a range of consumer protection laws. For the CMA, enforcement action may be appropriate where it has determined that breaches of law point to systemic failures in a market (sector or geographic); where changing the behaviour of one business would set a precedent or have other market-wide implications; where there is an opportunity to set an important legal precedent; or where there is a strong need for deterrence or to secure compensation for consumers.
The CMA published the advice for higher education providers on how to comply with consumer protection law in March 2015, as well as guidance on consumer rights for students. This included guidance with particular emphasis on what it saw as a range of unfair terms for students and information provision for prospective students. As a direct result of this guidance (which is backed up by legislation), most if not all universities have made significant changes to their terms and conditions and published information since then.
Following these publications, the CMA launched a compliance review and published the results in July 2016 with a letter to the sector. In the detailed report the CMA commented that there had been improvements but also examples of poor practice and cited some examples of where changes had been made:
7. During our review, using our statutory powers, we have undertaken and completed targeted investigations into the terms and/or practices of three HE providers. Following this action we have secured undertakings to improve their practices in relation to:
the use of academic sanctions for non-academic debt, such as accommodation debt;
the information provided to prospective students regarding additional course costs;
terms and information provision relating to the potential for fee variation; and
terms in providers’ complaints processes that could act as a barrier to students raising or continuing to pursue complaints.
Details of the three investigations into specific universities, Buckingham, Buckinghamshire New University and Birkbeck are summarised here and show the changes they agreed to make following the CMA intervention which primarily relates to the use by them of academic sanctions (such as preventing progression or graduation) to enable the recovery of student debt.
The CMA gets really tough. On module options
The CMA and its predecessor bodies, the OFT and the Competition Commission have undertaken many hundreds of investigations into breaches of the law. Many of these have involved huge scale competition issues involving many millions of pounds. At the other end of the scale, we have the investigations into higher education, the latest of which is at UEA.
Fundamentally the UEA case is represented as an issue about the presentation of information about course content which the University had decided to modify without consulting or advising current and prospective students. The University appeared to believe the changes were minor. The CMA believed they were significant. The University has since changed its policy to come into line with the CMA’s position. The press release reads as follows:
Students will receive a fairer deal at the University of East Anglia (UEA) after the CMA secured changes to the university’s contract terms.
The Competition and Markets Authority (CMA) stepped in after the UEA made significant changes to the content of a course – by introducing compulsory modules thus limiting students’ choice of optional modules – and not adequately informing prospective students who had received course offers about the changes.
UEA regarded the changes as ‘minor’ – in line with its contract terms at the time – and therefore did not consult existing students or inform offer holders immediately, as they would have done if they had considered the changes to be ‘substantial’. The CMA welcomes UEA’s undertaking which ensures that, in future, it will treat the addition of a compulsory module to a course as a ‘substantial change’.
UEA has also confirmed that it will make timely updates to its website of any substantial changes. This will ensure that anyone thinking about applying has access to up-to-date and accurate information.
Nisha Arora, CMA Senior Director, Consumer, said:
“For most students, going to university is an expensive, once-in-a-lifetime event and they should enjoy the best possible experience. So it’s important that prospective students have accurate and up-to-date information when choosing their course and existing students are given timely information about any substantial changes that are made to their course. And any contract terms which deal with variation, for example to course content, must be fair.
The CMA welcomes UEA’s constructive approach and its commitment to revise its terms and conditions and comply with consumer protection law.”
(I’m ignoring the reference to ‘the UEA’ which always used to annoy me immensely when I worked there.)
So it’s all pretty straightforward then, it’s just about up to date information for students and applicants. To crack this particular nut the CMA considered a number of pieces of legislation, namely the Consumer Protection from Unfair Trading Regulations 2008, the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 and the Consumer Rights Act 2015, Part 2 and the Unfair Terms in Consumer Contracts Regulations 1999 (for contracts concluded prior 1 October 2015).
That feels pretty heavy duty given we are talking about module choice information. But is this really a substantial change as the CMA say? According to the notes to the press release:
5. UEA made changes to the content of Year 2 of its 4-year undergraduate American Literature with Creative Writing course. Prior to the changes being made, Year 2 of this course consisted entirely of optional modules. Year 2 was changed when UEA introduced 2 new compulsory modules which then reduced the number of optional modules that students could choose to take. UEA considered that these changes enhanced the course and were of benefit to students.
6. UEA of its own accord made concessions to existing students on the American Literature with Creative Writing course BA, for example, allowing them to pursue optional modules which were not in the new course profile.
Now there could be many reasons, both educational and economic, why the university made this change. While it may appear significant to some, I struggle to see this. Courses change all the time – they have to keep abreast of current knowledge. Academic study is inherently unpredictable. It’s hard to imagine how in many subjects, universities will be able to anticipate curricular change and advise students accordingly.
Of course, it is also possible to see this as a fundamental challenge to academic freedom. Or at least the beginning of one. By intervening in this way, the CMA could be seen to be effectively seeking to determine part of the curriculum. Which is extraordinary.
Now I know it isn’t quite like that, this is all about information provision, consumer protection and fair contract terms.
But it does go to show that the consequences of encouraging the CMA to look at universities through this particular lens include a direct impact on academic judgement about curricula and course organisation.
For me, this represents an intrusive and inappropriate intervention by the CMA. I know others will see this as the CMA acting as the student champion, but I think there are big questions about whether this kind of intervention is appropriate. Is it right in this context to see students as consumers?
And doesn’t the fact that the CMA has pursued barely a handful of cases with universities show that the CMA should be concerned with bigger competition and consumer issues and really leave higher education alone?
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