Of possible interest.
_________________________________
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
CURL, Consortium of Research Libraries
CURL (www.curl.ac.uk) is a nationally and internationally
recognised partnership of 29 major research libraries,
including
24 university libraries, the UK's three national libraries,
and
the libraries of the Victoria and Albert Museum and the
Wellcome
Trust. CURL's mission is to increase the ability of research
libraries to share resources and provide for the information
needs of the local, national and international research
community.
EBLIDA, European Bureau of Library, Information and
Documentation
Associations
EBLIDA (www.eblida.org) is an independent non-governmental
and
non-commercial umbrella association of national library,
information, documentation and archive associations and
organisations in Europe.
LIBER, Ligue des Bibliotheques Europeennes de Recherche
LIBER (www.kb.dk/liber) is the principal association of the
major
research libraries of Europe. It was founded in 1971 under
the
auspices of the Council of Europe. Its current membership
includes research libraries of more than thirty countries.
LIBER
actively promotes co-operation with al library-related
organizations. It has strong links with the Council of
Europe,
the Commission of the European Communities (CEC), and the
International Federation of Library Associations and
Institutions
(IFLA), as well as with national library associations.
SCONUL, Society of College, National and University
Libraries
SCONUL, founded in 1950, is an association representing the
heads
of library and informationservices in all universities in
the UK
and Ireland (and in most other institutions of higher
education
inthe UK), together with the directors of the national
libraries
of the UK and Ireland. By sharing good practice, and
facilitating
collaborative schemes for the benefit of library users,
SCONUL
(www.sconul.ac.uk) promotes excellence in its constituent
library
services.
SPARC Europe (http://www.sparceurope.org
) is an alliance of
European research libraries, library organizations, and
research
institutions. We advocate change in the scholarly
communications
market, support competition, and encourage new publishing
models
that better serve the international researcher community. We
have
over 110 members in 14 European countries, including 38
leading
universities in the UK.
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