What is “market power” and how does it affect the academic publishing marketplace?
• Market power is a term economists use to describe the extent to which a firm (known as a “price maker”) can raise prices without losing its customers to competitors. Market power is limited by antitrust regulations in many countries, including the US. Monopoly is one form of market power. • Over the past two decades, several giant “price maker” STM publishing firms have used their market power to drive up prices at nearly four times the inflation rate and well in excess of library budget growth. • Bundling practices are increasing the market power of the market’s giant publishers. • With giant publishers absorbing a growing share of libraries’ budgets, there is less money available to spend with smaller publishers. IAA is deeply concerned that the growing market power of the giant publishers will force smaller publishers—such as the thousands of scholarly societies that publish one or a few journals—out of the market.
