A class action lawsuit has been filed against McGraw-Hill, Pearson Education, and other book retailers alleging that the companies conspired with each other to increase prices of their textbooks and eliminate any competitors in the marketplace.
The lawsuit was filed by college book resellers who claim that the book publishers and retailers created a product that forced students to buy new books (instead of used materials sold by the plaintiffs) by every college student in every semester.
The plaintiffs claim that the product, called “Inclusive Access,” limits access to higher education course materials and is exclusive to the defendants. This thus limits competition in the marketplace, the plaintiffs state.
Under the “Inclusive Access” plan, students who are enrolled at every college and university allegedly have no choice but to purchase their books in one format (the Inclusive Access plan), from one source (the defendant retailers), imposed by one group (the defendant publishers).
The plaintiffs claim that, historically, the higher education market for course materials included a “full and open” competition between retailers at universities. However, the defendants’ monopoly has allegedly changed this.
According to the class action, McGraw-Hill and other publishers control between 80 and 90 percent of the market nationwide in the producing and selling of college course materials.
In addition, the plaintiffs claim that McGraw-Hill and other retailers generally pay universities for the right to operate an on-campus store and they operate in more than 50 percent of the nationwide on-campus stores.
“As the sale of Course Materials (over the Internet, by Amazon, and through rentals) increased competition and finally began lowering the price and increasing the availability of Course Materials, the Publishers looked for ways to reduce or eliminate competition and increase their revenues,” the McGraw-Hill class action lawsuit states.
The plaintiffs claim that, through antitrust actions, the defendant publishers do not compete with each other to publish course materials for each university’s classes.
“This case challenges the Defendants’ conspiracy and their improper acquisition and use of monopoly power to irreparably harm the higher education course materials market by eliminating competition and thereby eliminating any consumer choice,” the McGraw-Hill class action lawsuit states.
The plaintiffs allege that the defendants are hiding their anticompetitive behavior in the form of technological advancements. The defendants’ end goal is to eliminate their competition and raise prices, according to the class action lawsuit.
The college books class action alleges that the defendants’ actions will result in a “total monopoly” of the market for the sale of books at every college and university, which would eliminate any competition for the sale of course materials.
According to the plaintiffs, McGraw-Hill’s and the other defendants’ actions will harm the entire higher education market because the scheme would result in a complete lack of choice for students to buy their books used as well as having students pay a higher price for their college materials.
“It further has stifled innovation in the marketplace and eliminated and otherwise harmed through improper means the Defendants’ competitors and any secondary product markets, including those of the Plaintiff Retailers and other Independent Collegiate Retailers,” the McGraw-Hill class action lawsuit alleges.
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The plaintiffs are represented by John C. Phillips Jr. and David A. Bilson of Phillips Goldman McLaughlin & Hall PA, Nicole Williams and Mackenzie S. Wallace of Thompson & Knight LLP and Stuart Cochran and L. Kirstine Rogers of Steckler Gresham Cochran PLLC.
The McGraw-Hill College Books Class Action Lawsuit is Campus Book Company Inc., et al. v. McGraw-Hill Global Education Holdings LLC, et al., Case No. 1:20-cv-00102, in the U.S. District Court for the District of Delaware.
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