LONDON. Scholarly publishing faces a stern test of its integrity, following one of the largest proposed acquisitions in recent years. On 27 October, Reed Elsevier reached an agreement to acquire Harcourt's scientific, technical and medical businesses as part of a more general acquisition of Harcourt General Inc for $4.5 billion in cash, plus the assumption of $1.2 billion in debt. Reed Elsevier then intends to sell on the Harcourt adult education divisions to Thompson Corporation for $2.1 billion.
Academics and other publishers can only stand by and watch as US authorities consider pleas from the opposition — mainly library research associations — for the acquisition to be disallowed on regulatory grounds. If the deal receives shareholder and regulatory approval, it will make Reed Elsevier the market leader in medical and science publishing.
In 1998, a proposed merger between Reed Elsevier and Wolters Kluwer provoked a worried reaction from US academic libraries. Over the past decade, mergers and acquisitions activity in scholarly publishing has been linked with increases in journal prices. In 1992, Dutch company Elsevier bought Robert Maxwell's company Pergamon before merging with a British publisher to become Reed Elsevier. Between 1988 and 1998 Elsevier's journal prices more than tripled (see 'Is scholarly publishing becoming a monopoly?'
During the inquiry surrounding the Reed Elsevier–Wolters Kluwer merger, librarians gave evidence of the crippling effect that a prestigious publisher can have on academic libraries. But it was the traditional content analysis by European antitrust authorities that, in fact, caused the merger to collapse. The reason given was too much overlap between the respective firms' legal journals; the deeper concerns of the libraries were left unresolved.
Two years after the failed merger, Reed Elsevier is again on the brink of a major acquisition, provoking fears that it will soon hold a monopoly over the market. There are valid concerns that the publishers of the most prestigious journals will exploit their position. Duane Webster, executive director of the US Association of Research Libraries, predicts that the intended union between Reed Elsevier and Harcourt General "will have severe repercussions for libraries, researchers and the public."
Derk Haank, chief executive officer at Elsevier Science, sees the acquisition as part of Elsevier's mission "to make all of its scientific material available on the desktops of researchers around the world — whenever and wherever they need it." He adds that: "The combined business will create a strong offering across the entire scientific, technical and medical spectrum, with outstanding platforms for the delivery of value-added electronic services and content."
But will such promises come at a greater cost to the libraries? Haank maintains that Elsevier's new pricing policy, introduced over the past two years, will not take advantage of the company's dominant market position. "Under this policy, annual price increases for the complete package of Elsevier Science print journals will be held to a single digit figure, incorporating the effects of current fluctuations, growth in volume output and inflation." Haank also states that the company is "entering into long-term arrangements with customers, both individually and as part of library consortia."
The concern still remains that customers have no option but to buy Reed Elsevier's journals. Mark J. McCabe, now an Assistant Professor of Economics at the Georgia Institute of Technology, was a member of the Antitrust Division of the Department of Justice at the time of the Reed Elsevier–Wolters Kluwer merger. In an interview with BioMedcentral, McCabe considered Reed Elsevier's print and electronic products separately, concluding that for print copies it is "very possible that the price increases could be substantial" and that on the electronic side Reed Elsevier threatens to have "such a majority that other companies will be forced to sell to them."
If Reed Elsevier adds Harcourt's 160 scientific, technical and medical journals to its standing total of around 260 journals, it will own 30–50% of the market, which is over the necessary threshold for antitrust authorities to start making inquiries. McCabe believes that, after the merger discussions in 1998, those investigating the issue "absolutely have to talk to the libraries — the precedent is set." And there are many librarians who are eager to voice their opinions.
The Association of Research Libraries and the Scholarly Publishing and Academic Resources Coalitions (SPARC) are two of the sponsors of an initiative called Create Change that advertises itself as "a resource for faculty and librarian action to reclaim scholarly communication." According to Create Change, the average North American research library has had to cut journal acquisitions by more than 6% since 1986, because of soaring prices. And Create Change knows exactly who to blame, explaining that "scholarly communication has become a multi-billion dollar business in which commercial publishers routinely increase prices by double-digit percentages each year."
Create Change identifies mergers as specific reason for prices to rise even higher, as they make for less competition. Its conclusion is that "libraries simply cannot afford to keep up with unit costs for commercially published journals, which are typically three to seven times higher than society or not-for-profit journals."
McCabe feels that solidarity between library associations is a positive base-camp from which to launch an anti-publishing-monopoly offensive but that scientists who submit research to the journals are the real weapons in this battle. In his words, "if you could get all research prima donnas in one place then they would have a significant effect on the power of publishers, but it is a very big 'if'." The problem is convincing scientists to boycott journals — an act that could jeopardise their career. A US professor has seven years to get material accepted by a recognised journal. If he/she fails the professorship can be terminated.
McCabe concludes that if the US decides to open an inquiry, the process will be a lengthy one and "ultimately it's not about what's happened in the past or what will happen in the future but about how much stamina each party has."