Policy & Advocacy

Stopping the Cengage/McGraw-Hill Merger

SPARC Helped Prevent a Duopoly over College Textbooks

Just after the one year anniversary of its announcement, the proposed merger between textbook publishing giants Cengage and McGraw-Hill Education was called off on May 4, 2020. The merger would have combined the second and third largest higher education publishers, turning the college textbook market into an effective duopoly that would have stifled competition in an industry already known for rapidly rising prices.

Merger Termination Announcements

Both companies cited antitrust concerns as the reason for the merger’s failure. Cengage‘s statement blames the “inability to agree to a divestitures package with the U.S. Department of Justice,” and McGraw-Hill states that “the required divestitures would have made the merger uneconomical.” Assistant Attorney General Makan Delrahim of DOJ said, “The decision to abandon this merger preserves competition in the market for textbook publishing,” and “American students were our primary concern when evaluating the possible competitive effects of this deal.”

SPARC Advocacy

The merger’s defeat follows widespread opposition from studentsconsumer groupslibrariesuniversities, and bookstores—along with growing calls for scrutiny by House and Senate lawmakers and international authorities. SPARC and our allies have underscored the drastic negative consequences the merger would have for textbook prices and consumer protection, along with the growing threat that consolidation of student data could give rise to a new platform monopoly in higher education. SPARC submitted a detailed 49-page antitrust analysis to DOJ in August 2019, and continued to seek opportunities to educate antitrust officials, international authorities, lawmakers, and state attorneys general about the harms of the merger, along with broader issues around the academic publishing industry’s shift toward data and data analytics as a core business.

Letters Opposing the Merger

As both companies have continued to operate as separate entities as the merger was under regulatory review, its termination effectively preserves the status quo. Both companies’ boards of directors unanimously approved the decision to call off the merger, and the companies have indicated that no payments or penalties will change hands as a result of the termination.

Selected Press Coverage

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