Armacost Library News: What the Cengage/McGraw-Hill Merger Could Mean for You

Monday, August 19, 2019

What the Cengage/McGraw-Hill Merger Could Mean for You

Source: SPARC DOJ Filing Opposing the Merger

In May 2019, Cengage and McGraw-Hill announced a planned merger and is pending regulatory approval. In August, the Scholarly Publishing and Academic Resources Coalition, SPARC, submitted a filing to the Department of Justice on the grounds of antitrust laws. According to SPARC, Cengage currently holds 24% and McGraw-Hill holds 21% of the textbook market. Combined, they will comprise 45% of the market, rivaled only by Pearson with an estimated 40-41.5% share. Concerns include the following.

Reduced competition. It's what you'd expect when the number of competitors drops from three to two.

Coordinated pricing ease. The ability for companies to cooperatively raise prices and profits, rather than competitively drive down prices and profits, will be easier to do with this merger. Expected, combined revenues are $3,157,000,000; higher education is expected to generate $1,492,000,000. (Cengage & McGraw-Hill Merger Announcement, slide 11)

Obstruction of cost-saving strategies. The merger's emphasis on digital offerings undermine cost-saving strategies like library course reserves, the Book Lending Program, and used-textbook alternatives.

Mandatory fees. Cengage's pivot to "inclusive access" models (institutional subscriptions to a library of course material) shifts purchasing decisions away from students to their institutions. Institutions can then pass along costs via student fees. From Cengage's annual report: "The growth in our digital business gives us access to a greater number of students in any given classroom and generates new sources of revenue from our existing adoption customers. In contrast to print publications, our digital products cannot be resold or transferred. We therefore realize revenue from every end user."

Mandatory compliance. Pivots to courseware make it difficult, if not impossible, for students to opt out of any terms of service.

Surveillance. Shifts from textbooks to courseware enable surveillance of students and educators.

Take Action: Support Open Educational Resources (OER)

Open Educational Resources (OER) are digital, educational resources (e.g., textbooks) that are free to use and licensed to enable sharing. OER enable students to have their materials on the first day of class, regardless of their ability to pay. OER enable educators to use a resource without fear that they're breaking any laws.

In 2019-2020, colleagues from the Hunsaker Teaching Center, Armacost Library, School of Business, the College's Psychology and Biology Departments will use an Innovation Grant, funded generously by the Provost's Office, to advance OER on campus.