On September 12, a San Francisco-based law firm filed an antitrust lawsuit on behalf of UCLA professor Lucina Uddin against six prominent academic publishers and the trade association that represents them: Elsevier, John Wiley & Sons, Sage Publications, Springer Nature, Taylor & Francis, Wolters Kluwer, and the International Association of Scientific, Technical, and Medical Publishers (“STM”). The suit is brought on behalf of a class that it defines as “All natural persons residing in the United States who performed peer review services for, or submitted a manuscript for publication to, any of the Publisher Defendants’ peer-reviewed journals from September 12, 2020 to the present.” The complaint lists just one claim for relief: that “Publisher Defendants and their co-conspirators entered into and engaged in unlawful agreements in restraint of the trade and commerce described above in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1.”
To support this claim, the plaintiff makes three key allegations. Namely, that the publishers have illegally agreed amongst each other to abide by:
- a “Single Submission Rule,” where researchers are only allowed to submit a manuscript to one journal for consideration unless the journal rejects it;
- a “Unpaid Peer Review Rule,” where journals implement policies to not compensate peer reviewers for their labor; and
- a “Gag Rule,” where researchers are not allowed to share or discuss their manuscript once they have submitted it to a journal for consideration before the journal publishes it.
Why would any of these actions constitute an antitrust violation? We thought a little background could be helpful:
To understand this lawsuit, we must first consider the purpose of U.S. antitrust law. The fundamental goal of antitrust law is to encourage competition and ultimately to promote consumer welfare. The Supreme Court explains that: “Congress designed the Sherman Act as a consumer welfare prescription.”
Section 1 of the Sherman Antitrust Act does this by prohibiting “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade.” This generally requires proving two things: (1) some sort of agreement or business arrangement, and (2) that this agreement is “in restraint of trade,” i.e., unreasonably harmful to competition.
Proving an agreement can sometimes be a complicated factual question, though often there are good clues, especially when joint activity is coordinated through a trade association (antitrust lawyers love to quote Adam Smith on trade associations: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”) In this case, the plaintiff says that the agreements are so obvious that they are in fact published openly in several portions of the STM’s “International Ethical Principles for Scholarly Publication” which are then implemented and enforced by each publisher.
Proving the second part, that the agreement is in restraint of trade or unreasonably harmful to competition can be more complicated. The courts have developed three different analytical frameworks for evaluating whether conduct harms competition in this context:
- A “per se” rule for agreements that are “nakedly” anticompetitive. Examples include agreements to fix prices (what’s alleged here, at least with respect to payment for peer review), bid-rigging, agreements to divide markets, and a few other kinds of less common agreements.
- A “rule of reason” test—which applies in most cases—that weighs the pro-competitive effects of the agreement against anti-competitive effects and prohibits agreements only when the anti-competitive harms outweigh the benefits.
- “Intermediate” or “quick-look” scrutiny, which covers a small number of cases in which agreements look suspicious on their face but are not so obviously anticompetitive as to fall under the “per se” rule.
The plaintiff’s complaint claims that the publishers’ agreements violate the Sherman Act regardless of which of these three tests apply. But often, some of the most significant battles in antitrust lawsuits are about which of these standards apply since the costs associated with litigating a suit can change dramatically depending on which is used. If the court accepts that the “per se” standard applies, the plaintiff likely wins. If the “quick-look” rule applies, the burden is on the defendant to show that its conduct is not anticompetitive. But if the “rule of reason” standard applies, the suit will likely involve extensive discovery, expert witnesses, and other factual evidence about what exactly the market is, whether the defendants had sufficient market power to negatively affect competition, and whether the agreement would negatively or positively affect competition.
In these cases, defining the relevant market is often crucial. In most antitrust cases, defining the relevant market involves identifying substitutes for the product under review. On this point, the plaintiff argues:
“Publication by peer-reviewed journals is a relevant antitrust market. For scholars who seek to communicate their scientific research, there is no adequate substitute for publication in a peer-reviewed journal. Peer-reviewed journals establish the validity of scientific research through the peer review process, communicate that research to the scientific community, and avoid competing claims to the same scientific discovery.”
For market definition, it is important to include only close substitutes and exclude those that are distant. For academic publishing, even though there are many ways authors can share their manuscripts—from emailing their colleagues, to posting on their personal websites, to publishing with upstart new journals—the fact remains that the journals in question are the primary means of dissemination and are the most heavily read and heavily cited. So at first glance, the complaint seems realistic in its formulation of the market at issue.
The complaint then goes on to argue that the publishers hold significant power in this market and misuse that power, touching on familiar themes such as how these academic publishers extract significant profits, charge high rates for access and increasingly high fees for authors to publish openly, and so on. The plaintiffs allege that this market power has allowed the publishers to make agreements amongst each other (the three allegations noted above) in ways that allow them to maximize profits while also maintaining their market power. We note that it’s true that there may be some other explanations for these practices—in fact, some authors may be proponents of some of them, for example, the single-submission rule. But even if there are other explanations for these rules, with the current arrangement agreed through STM, the allegation is that no member publisher will even try to compete or develop other approaches that may drive up the price for peer reviewers, compete for placement of papers, etc.
How this lawsuit will turn out is hard to predict. This lawsuit flags some very problematic practices enforced on the academic publishing industry by prominent publishers. But there are many other problems with the academic publishing industry not discussed in the complaint. We’ve long thought that the public-interest nature of academic research and publishing is complicated when paired with commercial publishers who have strong incentives to maximize profits. Of course, even for-profit firms are expected to operate within the law; profit-maximizing to the point of adopting anti-competitive practices is fundamentally at odds with their essential social responsibilities.
