Representatives from five research library organizations in Europe urge the Competition Directorate-General (DG for Competition) to investigate the sale of John Wiley & Sons's acquisition of Blackwell Publishing (Holdings) Ltd.
The five organizations are CURL (Consortium of Research Libraries), EBLIDA (European Bureau of Library, Information and Documentation Associations), LIBER (Ligue des Bibliotheques Europeennes de Recherche), SCONUL (Society of College, National and University Libraries), and SPARC Europe (an alliance of European research libraries, library organizations, and research institutions). Below is the letter sent to the DG Competition:
Philip Lowe
Director-General Competition
European Commission
DG Competition
rue Joseph II / Jozef II straat 70
1000 Brussels
12 January 2007
Dear Mr Lowe
Recently, John Wiley & Sons Inc announced an agreement to purchase Blackwell Publishing (Holdings) Ltd, a publisher of academic books and journals. As representatives of the primary customers of academic publications within Europe, we are deeply concerned that this transaction will have an adverse effect on prices and result in a further reduction in access to critical research information. Based on our experience with previous mergers in this industry and our initial analysis of this transaction, we urge that the DG for Competition investigate this sale.
CURL, EBLIDA, LIBER, SCONUL, and SPARC Europe represent the interests of university research and teaching libraries within Europe. We have joined together because of a shared concern over the impact of concentration amongst academic publishers on the prices and availability of research outputs.
Wiley's core business includes scientific, technical and medical (STM) journals, encyclopaedias, books, and online products and services. Blackwell publishes journals, nearly evenly distributed between STM and the social sciences and humanities, as well as academic books. In making the acquisitiion, Wiley will publish 1,250 journals, making it the third largest academic journal publisher internationally. However, we believe that the disadvantages to the academic community from this merger are far greater than even this high number of titles would suggest.
Studies have shown that mergers in the publishing industry result in larger price increases than would be expected from inflation.
Every journal produced by each publisher is unique - no two journal articles are identical and Wiley describe the material they publish as "must-have". Therefore, the norma market forces of competition do not come into play. If university staff and students need the content in a particular journal, the owners of that journal will be able to raise the price without fear that the library will go to a competitor. To re-coup their investment and raise profit margins Wiley will be able to raise prices knowing that the unique nature of the academic publishing market will allow them to do so with impunity. This was recognized in a recent study commissioned by your colleagues in DG-Research that showed that "publishers with large journal portfolios have an incentive to set higher prices." The study concluded that future acquisitions by large publishers should undergo scrutiny.
The continued consolidation of publishers in this market segment is harmful to competition and results in increased prices for customers, and therefore decreased availability of research findings, with consequent impact on the progress of innovation and economic and social development within Europe. The fact that journal publications are transitioning from paper to electronic format does not diminish the negative impacts of this acquisition or the level of our concerns. The large publishing groups are able to consolidate and increase their market share through acquisitions because their journals are sold to libraries in blocks of titles. The only way that libraries can meet the higher prices resulting from publisher acquisitions and mergers is by cancelling titles not part of these large blocks, i.e. those published by the smaller publishers. Large publishers are able, therefore, to exploit their monopolistic positions to further bundle their products, increase their market share, and squeeze out smaller competitors. We believe that the analyses of past acquisitions and mergers in this sector have not taken into account the way the primary consumers - libraries - purchase academic journls.
In September 2002, the Office of Fair Trading (OFT) in the UK concluded that "there is evidence to suggest that the market for STM journals may not be working well." On page 7 of the OFT Statement a list was given of the largest STM publishers in 1998.
If the proposed purchase of Blackwell by Wiley were to take place the largest 15 publishers in 1998 would condense into just 9 companies.
At the appropriate time, representatives of the library community would be pleased to meet with staff of the Commission to highlight how this transact ion is likely to have an adverse effect on prices, the availability of STM journals, and the economic benefits of innovation. In the meantime, we will continue to gather data to demonstrate the effects of this particular transaction and will forward results to you as we have them.
Yours sincerely
Robin Green, Executive Director, CURL
Andrew Cranfield, Director, EBLIDA
Peter K Fox, Vice-President, LIBER
Toby Bainton, Secretary, SCONUL
David Prosser, Director, SPARC Europe
