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