US libraries challenge Springer merger

<p>Liz Bury</p><p>A group of six US library organisations has urged a change in the way mergers between giant STM publishers are evaluated by competition authorities.</p><p>The call has come as UK venture capital partnership Candover and Cinven begins to integrate STM publishing giants Kluwer Academic Publishers and Bertelsmann-Springer. Both publishers have large operations in the US.</p><p>The libraries group, Information Access Alliance, claimed that such STM mega-mergers had led to unjustified rises in journals pricing over the past decade. Academics' access to valuable research material had been restricted as a result, it said.</p><p>A new IAA paper, A Consumer-Based Approach to Antitrust Analysis, urged the US Department of Justice (doj) to adopt a new standard of mergers review, accepting that libraries, not individuals, are the biggest customers of STM publishers.</p><p>"When reviewing proposed mergers, antitrust authorities should consider the decision-making process used by libraries--the primary customers of STM and legal serial publications--to make purchasing decisions," it argued.</p><p>It claimed that between 1991 and 2000, the price of US library subscriptions to STM journals rose by 158%, more than six times the inflation rate, while the price of legal serial publications rose 103%, more than four times inflation. A survey by the Association of Research Libraries (ARL) found that commercial publishers, many of which were then consolidating, were the worst offenders.</p><p>ARL estimated that the new merged company, to be called Springer, will control 20% of the US science journals market. Derk Haank, who has been lured from Elsevier to be Springer c.e.o., rejected the claim. "It will be less than 10%," he said. Candover and Cinven are expected to set tough targets for profit margin, a drive that ARL fears will lead to price rises and restrict choice.</p><p>Mary Case, director of scholarly communication at ARL, said: "We have sent this paper to the DOJ to demonstrate our argument, and to try to increase understanding of the issue on a broader scale."</p><p>ARL claimed that in some cases, libraries are unable to subscribe to the depth and breadth of journals required for their work. "As access to journals declines, productivity declines: efforts may be duplicated, unproductive lines of research may continue, and innovation is slowed."</p><p>A spokesman for Candover and Cinven said: "The final shape of the management team is not yet decided. The regulatory process is underway and we are making submissions to the DOJ as a matter of course."</p><p>An attempt by libraries to block the merger of Reed and Harcourt in 2001 was unsuccessful. But Mark McCabe, a professor at Georgia Institute of Technology and former economist with the antitrust division of DOJ, called the Reed/Harcourt ruling "a mistake". He said: "We are strongly concerned about this deal."</p><p>Mr McCabe's research has aimed to set out a link between mergers and price increases. "If you take snapshots of journals prices before and after the mergers in the early 1990s and late 1990s, in almost all cases the merger raised prices." The switch to electronic journals, often bundled together in subscription deals, had further confused the issue of price.</p><p></p>