Re: Information Access Alliance Urges DOJ & FTC to Explore Remedies for Journal Bundling: Comments Available on Web

[Ray English <Ray.English@oberlin.edu>]

This posting is intended to provide background on why the large 
electronic journal agreements are of concern to many libraries 
and why they may be anticompetitive.

Most libraries are faced with virtually an all of nothing choice 
with the large bundled deals.  In most instances the rates of 
overall price increase for the deals are much higher that the 
rates of increase for library budgets.  Libraries either accept 
rising prices for the bundle as a whole and let the bundle eat up 
more and more of their budgets - or they take the drastic step 
that was recently taken by Norway (in the case of the Blackwell 
license) and cancel the agreements, living with a total loss of 
access. It's a rare exception for a consortium to have 
successfully negotiated some control over content (including the 
ability to deselect specific titles) that allows them to moderate 
the overall rate of increase for a specific deal.  Most consortia 
and most libraries are therefore caught in a terrible dilemma, as 
was described eloquently by Ken Frazier in his classic D-Lib 
piece several years ago.

See: http://www.dlib.org/dlib/march01/frazier/03frazier.html

Libraries either let prices increase at rates greater than their 
budget increases (with negative effects on subscriptions outside 
the bundle and on their monograph budgets) or they go cold turkey 
and try to live with the consequences of lack of access in hopes 
of getting better terms.  Norway is the first example of a group 
of libraries that's chosen the latter course.  It is true that 
libraries don't have to enter into the agreements.  But if they 
don't, then the prices for individual titles (from the same 
publisher) that they subscribe to will still continue to increase 
at rates that are unsustainable and they'll lack the additional 
journal access that come with the bundled package.

I would guess that most libraries don't feel they don't' actually 
have a real choice.  That's a sentiment that I've heard from 
several quarters.  Even if it was determined by antitrust 
authorities that libraries do have choice about entering into 
such agreements, those same authorities might find that aspects 
of the agreements - in terms of their effect on the broader 
market - are anticompetitive.  That's a legal question that I'm 
not in a position to answer. But it's also one that I think 
antitrust authorities need to look at and decide.

The basic argument against the large electronic license 
agreements is that they may be anticompetitive in two ways. 
First, by taking away choice on the part of libraries they create 
budgetary pressure on titles that are not under such agreements, 
leading to cancellations of those journals.  Society journals and 
independent journals that are not part of electronic packages are 
therefore particularly vulnerable. Second, the agreements create 
barriers to entry for new journals, since the new titles can't 
compete on a title-by-title basis with journals that are in the 
bundles.

The basic legal argument that the large deals are anticompetitive 
has been made by Aaron Edlin and Dan Rubenfeld in an article in 
the Antitrust Law Journal.  They've also published a more general 
economic discussion of electronic licenses in the American 
Economic Review. See Edlin's website for access to both, 
specifically the first two pieces under "Antitrust, Industrial 
Organization, and Competition Policy": 
http://works.bepress.com/aaron_edlin/

I'm sorry that I won't have time to engage in an ongoing exchange 
following this post.  I offer it for clarification and leave it 
to others to carry the discussion forward.

Ray English
Director of Libraries
Oberlin College