Competition Law and Scholarly Publishing
Two academics who are critical of “traditional” scholarly publishing, Jon Tennant (https://twitter.com/
If I follow the thread of the Tennant/Brembs and EUA arguments correctly, they assert that:
- The scholarly publishing market sector is dysfunctional
- University and library customers (and perhaps corporate & SME customers) have few market alternatives to the major publishers
- Each journal article is a monopolistic market in and of itself (with limited substitutability)
- Thus high barriers to entry
- Publishers contribute little to the journal publishing process and literature
- Major publishers own the high-prestige journals and use this as leverage in “big deal” negotiations
- Library customers are forced to purchase the “big deal” because of this reputational element
- Profits and margins are too high for the established publishers & costs should have been reduced by the transition from print to electronic
- Transformation to OA is too slow (and slowed down by existing players)
- Non-disclosure provisions in customer agreements work to prevent price transparency and stifle negotiation
- The “read and publish” negotiating stances of DEAL (Germany) and Bibsam (Sweden) are intended to counteract the “double-dipping” issue in hybrid OA journals (journals that have two potential revenue streams, OA plus subscriptions)
- New adjacent researcher-oriented service businesses, or publisher-infrastructure services, are being used by established publishers to extend monopolistic behavior to these adjacent markets (the “lock-in” idea)
Why haven’t the authorities reacted?
One can reasonably ask– if there is this much smoke, why is there not a little more fire? Apparently, the authorities at the CMA and European Commission have not accepted the view that this is a market with anti-competitive or dominant player behaviors. Perhaps that is because this market sector has seen remarkable developments over the past 10-16 years, including:
- Substantial increase in new entrants, both at the journal and publisher level, generally entrants with a “Gold OA” or author-funder-institution pays model (Hindawi, PLoS)
- General understanding that this is a far from concentrated market—even the complainants note that collectively 4 or 5 major publishers do not add up to more than 50% of the market
- Understanding that library customers are free to subscribe to individual journals or take bundles of journals
- Sense that library customers are in fact exercising significant negotiating leverage through consortia and national-level negotiations
- Finally, perhaps a sense that the sector is showing significant innovation in new services and increased online availability.
What scholarly publishing as a sector really looks like
Scholarly publishing is a large sector with more than 10,000 journals, depending very much on market definitions (inclusion of arts and humanities, etc). There are many publishers with large portfolios of journals including Elsevier, Springer Nature, Wiley and Taylor & Francis, but it is equally true that many of the most important journals across science and in individual scientific disciplines are owned and managed by scientific or medical societies who do not have large portfolios of journals (Science, BMJ, NEJM). Journals are available through a variety of means, including through distributors such as subscription agents, on an individual title basis, or as collections or bundles of journals (not all of which represent the all-in “big deal”) from publishers, and journal articles are available through a variety of means including document delivery services, authorized interlibrary loan activities, and as pre-formal documents such as author manuscripts and preprints (often made available in institutional repositories or preprint repositories).
Each journal article is a unique artifact—the article identifies the research or scholarly issue at hand, the experiment or argument around that issue, and the results or conclusions. However, journals are discipline-specific and each discipline will have a few top journals in the field that compete with each other—in that sense competition is at the discipline and journal level, and that competition is quite intense. Journal articles are not the only artifacts from scholarly research or discourse—there are pre-formal versions of papers as noted, but in addition and of increasing importance is the actual research data from experiments and projects. Formally published journal articles, the version of which is managed by the scholarly publisher, is not the only method to obtain understanding of the underlying research or scholarship—it is however a particularly convenient method to gain a thorough understanding of the issues and background and to see at least some of the data involved, and provides some comfort with respect to general soundness of the article through the peer review process.
Publishers are still producing legacy journals in print as well as in the new electronic formats—because some customers still prefer print. The management of electronic services and databases has substantial costs as well. Costs are managed by publishers through a variety of means, including automation and offshoring, but costs are certainly not substantially reducing in the electronic age. The famous Scholarly Kitchen article by Kent Anderson on “things publishers do” is relevant here in its discussion on managing databases and online platforms.
Publishers organize the refereeing and publishing system, have done so for perhaps centuries, and appear to do reasonably well in providing value and services. If publishers contributed so little to the system, then preprint services would be perfectly fine substitutes (they are not of course—readers prefer to rely on the editorial processes identified above, not to mention annotation and reference linking and the other “things publishers do”). Academics provide many services to journals as editors and peer reviewers. The tradition has been that editors are paid by publishers but not peer reviewers, and similarly, that journal article authors are not paid “royalties”—that could change of course but likely would create other and new problems. My view is that editor payments make sense in that editors provide more continuous and extensive service to their journals than do authors and reviewers—although I completely agree that the important work of reviewers should receive more recognition, and that reviewer burdens should be shared more equitably.
Library customers and publishers have been struggling with pricing in the new electronic environment since at least the early 2000’s, and non-disclosure provisions have helped in ensuring that negotiations around pricing and discounts can remain confidential as between the parties. List prices for print journals are of course completely transparent and are highly relevant as those prices are or have been part of the calculation of online subscription packages. Print journal price increases have been more stable over the past 20 years than they were in the 20 years prior (compare with reports from the early 2000’s re increases of over 10% per year). Further, as Gantz noted in her 2013 article in Learned Publishing, actual serials spend at ARL libraries may be increasing at a lower clip than print journal list price increases, suggesting that libraries are benefiting substantially from aggregate discounts through a variety of means along with the “big deal” licenses.
Institutional and library budgets, however, have not been stable and have failed to keep pace with the growing number of researchers and amount of research to be published. This is well understood and has been reported frequently in the STM association’s “STM Report” (see p.28). These problems, and the issue of over-reliance on journal impact factors in tenure decisions or rankings that Tennant/Brembs criticize, are not caused or exacerbated by publishers.
The DEAL negotiations demonstrate the strength of library consortia in negotiations—the push for the “read and publish” model is in my view quixotic and irrational—in that it requires that non-German (non-OA) author articles are also made available openly with no payment model—but it nonetheless shows the negotiating model is real and equitable– neither side has all the market power. A good summary of recent discussions (August) can be found here. Double-dipping is not, to my knowledge, an issue in the negotiations and in any event is a non-issue at least with respect to Elsevier journal pricing, where print journal price increases (and occasionally decreases) are based around increases or decreases in the number of subscription-model articles (thus OA articles are not counted for this purpose)—see https://www.elsevier.com/about/policies/pricing#Dipping.
Elsevier and other major publishers are contributing mightily towards a migration to an OA business model and other forms of OA activity. Elsevier and Springer Nature along with PLoS are now the largest publishers of OA content. These changes however require that there be some underpinning business model—it appears that Tennant/Brembs criticize the Gold OA model chosen by the UK coming out of the Finch Report—but the only replacement for this would be a model that demands that journals and publishers continue to provide services while the journal content is made available without charge—how can this possibly work? Whether the EU succeeds in its ambitious 2020 Plan or the new Plan S is probably more dependent on the behavior of researchers, funders and research institutions than on publishers. It is unlikely, in my view, to succeed if publishers are the only stakeholders subject to persuasion or coercion.
Finally, from a competition law perspective, in theory dominant market players can exercise control in adjacent markets (such as academic infrastructure) by essentially tying the purchase of one product or service with the purchase of another product or service. That is simply not the case in scholarly publishing or research infrastructure. First, to my knowledge, there are no requirements to purchase one type of service as a condition to purchase of another. Second, this sector is rich in alternatives including cross-industry initiatives such as CrossRef. There is no evidence of any dominant tying behavior in any of these new services, rather the evidence, I would argue, is that this shows competition working as it should to support innovation in new services.
Criticism of Elsevier
You might say that of course, I would say, as former General Counsel to the Elsevier division, that many of the critical comments and observations by the EUA and Tennant/Brembs are inaccurate. For example, critics sometimes equate the whole of RELX’s profits or all of Elsevier’s revenues to scholarly journal publishing. RELX obviously operates 4 business divisions and has healthy operating margins across those divisions. Elsevier produces publications and analytics services in several sectors including its health services business (almost entirely unrelated to the library journals market and with a very different customer base in mind), and publishes books and databases in addition to journals. It is a complex business that in my view is well managed and provides good value to its respective customers. The people that I know at Elsevier are committed to providing those services and value, and they work hard at offering solutions and alternatives for customers at many levels and in many sectors. Journal article authors are not forced to publish in any journal, let alone Elsevier journals, but in 2017 scholars submitted more than 1.6m papers to Elsevier journals for consideration, of which more than 400,000 were eventually published. Elsevier works extensively with journal editors on quality issues, and while not every Elsevier journal is a star in its field (several are, but not all), the precepts of service and quality are emphasized at all levels in the organization and with editors. A large and complex business, of course, does not always run optimally and will occasionally make mistakes— human error does occur. The hallmark of a well-run business is that it identifies and corrects those mistakes.