Editor's note: FYI, forwarded to SERIALST with the permission of Rick Johnson, Director of SPARC (the Scholarly Publishing and Academic Resources Coalition). -bml ---------- Forwarded message ---------- Date: Mon, 11 Dec 2000 17:38:43 -0400 From: "Richard K. Johnson" <rick@arl.org> Subject: Reed Elsevier acquisition of Harcourt To: Multiple recipients of list <arl-sparcmem@arl.org> Dear SPARC members: As you know, Harcourt General recently announced that it has accepted Reed Elsevier's bid to purchase Harcourt. This has given rise to concerns about the potential anti-competitive impact of Reed Elsevier's takeover of journals published by the Worldwide Scientific, Technical, and Medical Group of Harcourt, which includes Academic Press, W.B. Saunders, Mosby, and Churchill Livingstone. I urge you to make your views on the impact of this acquisition known to the US Department of Justice. The following message and attachment [attachment not included with this serialst posting /ed.-bml], prepared by Mary Case of ARL for the ARL membership, will provide you with valuable background to assist you in preparing such a letter. Thank you for your your support. Rick Johnson SPARC DATE: December 11, 2000 FROM: Mary Case RE: Reed Elsevier ? Harcourt Merger I would like to encourage you to call, write, or e-mail the Antitrust Division of the Department of Justice (DoJ) to express your concerns with the Reed Elsevier acquisition of Harcourt General. It is critical that the DoJ hear from as many customers of these companies as possible about the likely impact this transaction will have on libraries' ability to serve the needs of their students, faculty, and the public. You might also consider discussing this merger with your state's Attorney General or with federal legislators who you think may be sympathetic to your concerns. A letter from one of these to the Antitrust Division can be useful in keeping the momentum going. Some key points to include in your communication are listed below. If you have local data on numbers of titles and expenditures with the two companies as a percentage of your entire STM journals budget, that would be very useful to share with the DoJ. Information on how you budget for electronic resources, especially if funds comes off the top for multidisciplinary packages, would also be very helpful. We would appreciate it if you would share any correspondence with us. 1. Research libraries are major customers of STM journals. In the aggregate, ARL libraries spend approximately $350M a year on STM journals. Approximately 25-30% of that is for Elsevier Science titles alone. Another 6-7% is spent on Harcourt STM titles. The combination of the two companies would present concentration issues for the industry. [Replace with local data, if available.] 2. Journal prices, especially in science, technology, and medicine, are increasing rapidly. In the last 15 years, the unit cost of journals tripled. Libraries have been forced to cancel journals and decrease the purchase of monographs. Between 1986 and 1999, the number of journal subscriptions has been reduced by 6% and the number of books purchased has declined by 26%. [Add or replace with local data from cancellations and decreased book purchasing.] 3. We would expect that this transaction between Reed Elsevier and Harcourt would result in significantly increased prices for the Harcourt journal titles. Economic analyses of prior mergers have demonstrated that price increases do in fact result. When Elsevier Science purchased Pergamon Press in 1990-91, the price of Pergamon's biomedical titles increased 27% while the Elsevier prices increased about 5.2%. When Kluwer purchased Lippincott the same year, the Lippincott titles increased in price about 30%. ["Academic Journal Pricing and Market Power: A Portfolio Approach," November 2000. <http://www.prism.gatech.edu/~mm284/>] 4. According to Science magazine, the merger would result in Reed Elsevier owning 34% of the 1240 mainstream biomedical titles tracked by the Institute for Scientific Information (ISI), as well as 27% of the 500 most cited scientific journals. ["Librarians Seek to Block Merger of Scientific Publishing Giants," Science, 3 Nov. 2000, p. 911.] 5. Given the increased concentration that will result from this transaction and the likely increase in Harcourt journal prices, the Antitrust Division should prevent this sale. Send your letters to any or all of the following: A. Douglas Melamed Acting Assistant Attorney General Antitrust Division U.S. Department of Justice, Room 3109 10th Street and Constitution Avenue, NW Washington, D.C. 20530-0001 antitrust@usdoj.gov Fax: 202-616-2645 Susan Edelheit [Manager in charge of the case] Assistant Chief, Civil Task Force Antitrust Division U.S. Department of Justice Suite 300 325 Seventh Street, N.W. Washington, D.C. 20004 Fax: 202-514-7308 susan.edelheit@usdoj.gov James Villa [Attorney in charge of the case] Civil Task Force Antitrust Division U.S. Department of Justice Suite 300 325 Seventh Street, NW Washington, DC 20004 202-514-8361 Fax: 202-514-7308 james.villa@usdoj.gov
