Concerns about Cengage McGraw-Hill educational publishing deal

12 December 2019

The ACCC has raised preliminary competition concerns about the merger of United States-based publishers Cengage Learning and McGraw-Hill Education.

Cengage and McGraw-Hill are global publishers of educational resources, and are both significant players in the publishing of Australian higher education resources, in particular.

“This proposed deal involves the merger of two of the four biggest publishers in higher education worldwide,” ACCC Commissioner Stephen Ridgeway said.

“The ACCC has preliminary concerns that this may result in higher prices, reduced quality or a more limited product range for students in Australia.”

The ACCC considers that alternative products to new textbooks, such as open educational resources, second-hand books or rented books, are unlikely, in most cases, to be close substitutes for new textbooks for higher education students. 

There are also preliminary concerns that the transaction may reduce competition in the acquisition of higher education authors’ rights in Australia.

“The transaction will reduce the already limited number of major publishers with whom academics can publish their works,” Mr Ridgeway said.

"The reduction in competition may lead to decreased royalties for authors, or less attractive contract terms.”

The ACCC has published a statement of issues and is seeking further information about the publication of higher educational resources in Australia, including in relation to whether there are specific higher education disciplines where Cengage and McGraw-Hill compete particularly closely.

The ACCC invites submissions from interested parties on the statement of issues by 20 January 2020. The ACCC’s final decision is scheduled for 12 March 2020.

Further information is available at Proposed merger between Cengage Learning and McGraw-Hill Education.

Background

Cengage and McGraw-Hill are major global publishers of educational resources, and are based in the United States. Cengage has operations in 170 countries, with physical locations in a number of these countries, including Australia. McGraw-Hill has operations in 100 countries.

In Australia, both Cengage and McGraw-Hill publish educational resources (in print and digital format) for primary schools and higher education (both university and vocational education). Publishers like Cengage and McGraw-Hill usually acquire authors’ rights for content that they publish. To acquire these rights, publishers enter into contracts with these authors who are typically paid royalties on the sale of their books.

The key overlaps between Cengage and McGraw-Hill in Australia are in the supply of educational resources in higher education, including in several individual disciplines, and the acquisition of authors’ rights for content in higher education, including in several individual disciplines.

The transaction is being reviewed by competition authorities in other jurisdictions including the United States, United Kingdom, New Zealand, Austria, Cyprus and Mexico.

Release number: 
240/19
ACCC Infocentre: 

Use this form to make a general enquiry.

Media enquiries: 
Media team - 1300 138 917

Tags

Audience
Topics