ALA Releases Competition in Digital Markets Report Highlighting “Big Deals,” Textbook Pricing

Current practices by content publishers and distributors in digital markets limit libraries’ ability to deliver core services, according to a new report publicly released today by ALA. Submitted in response to an inquiry from the U.S. House of Representatives Committee on the Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law, the report urges lawmakers to curb anti-competitive practices of digital market actors.

“By outright denying or delaying library access to digital content, dominant actors in digital markets endanger America’s competitiveness and our nation’s cultural heritage,” said ALA President Wanda Brown. “Everyone who reads, writes, performs, or sells creative works is harmed when libraries are unable to purchase and deliver content for all in our communities.”

The report notes that the market for libraries that purchase academic and research content is particularly dismal. Like many other publications, scholarly journals essential for research have largely transitioned to digital formats over the past 25 years. At the same time, the market for scholarly journals has seen tremendous consolidation and a nearly exclusive focus by major academic publishers on selling digital journal bundles, or “big deals.”

As the report states, as “publishers also often lock libraries into multi-year arrangements with built-in price increases, libraries have found a growing chunk of their budgets allocated to servicing these big deals, forcing them to cut books, monographs, and single-journal purchases. What was once seen as a way to get a significant collection of journals at a discount off of list price has devolved into a restrictive agreement that limits financial and strategic flexibility.”

In the college textbook market, three companies—Pearson, Cengage, and McGraw-Hill—account for 85 percent of the industry. Despite the cost improvements digital technology affords, textbook prices have risen three times the rate of inflation over the past two decades. Plans to merge Cengage and McGraw-Hill Education will create further industry concentration.

The report additionally addresses publishers’ abusive pricing and restrictive licensing terms for libraries. Over the past 10 years, libraries have spent more than $40 billion acquiring e-books as well as streamed music and audiovisual content from publishers. For popular e-book titles libraries pay up to five times the price an individual consumer pays and, unlike the individual, libraries typically have access to an e-book title for only two years. Restrictive license terms for streamed music and audiovisual content present libraries with similar access challenges.

The report’s release comes on the heels of ALA’s #eBooksForAll campaign in protest of Macmillan Publishers’ plan to restrict sales to libraries. Beginning November 1, 2019, libraries of all sizes will be limited to purchasing one copy of a newly published e-book title and must wait eight weeks to buy additional copies. The embargo has outraged library advocates across North America, generating local and national media coverage.

As for ALA’s next steps, Alan Inouye, ALA senior director of public policy and government relations, noted that “Beginning next week, ALA and our members in targeted congressional districts will engage legislators on the substance of our report. When librarians and community leaders tell Antitrust Subcommittee members how unfair digital market practices impact their constituents, Congress will listen.”

“ALA will continue to pursue legislative, advocacy and legal options to ensure everyone in our communities has access to the creative content for which libraries already pay a very high price. We will not stand down.”