Open Access - Business, Innovation and Skills Committee Contents

5  Achieving a functional market

72.  Neither the Finch Report nor the Government assessed the current functioning of the scholarly publishing market in the formation of their policies. Despite the massive profit margins of the large commercial publishers, driven up by public sector expenditure, the Government made it clear to the Finch Group that it was important not to destabilise "what is most valuable in the research communications system".[105] This was subsequently confirmed as a priority:

It was accepted that publishers, including learned societies, provide a valuable service by both administering a highly respected peer review process and providing the necessary investment for a globally successful UK based research publishing industry. To sustain the advantages of the present publishing arrangements, whilst simultaneously exposing the industry to radical change, requires payment of an APC under Gold OA.[106]

73.  A recurring theme in this inquiry has been that elements of the scholarly publishing market are dysfunctional. The systematic increase in subscription prices over inflation, the opacity of pricing due to non disclosure agreements, and the APC pricing differences between comparable hybrid and pure Gold open access journals have been set out earlier in this Report. Together, they demonstrate a lack of transparency and competition in the market which is deeply concerning.

74.  The evidence we received strongly suggests that implementation of the Government and RCUK policies will make the situation worse. Publishers have been incentivised to add a Gold open access option to their subscription journals. It is highly likely that this will lead to longer embargoes and less access. It could also lead to double payments by UK institutions, which have to maintain their subscription charges while paying APCs as well. The costs of publishing services are increasingly disassociated from the value of the actual services provided. We heard evidence that costs of peer review, formatting, editing and other publisher services are exaggerated by publishers, keeping prices artificially high.

75.  We received evidence showing that the development of a functional market is also hampered by the fact that authors are desensitised to the prices of journals in which they publish, because the purchasers (predominantly libraries) are not the consumers of the product. The Government also is desensitised to the costs of its policy, claiming that since APC costs would be carved out of the ring-fenced science budget, "it is not a public expenditure issue".[107] We disagree. The Government is accountable to the public for where and how public money is spent. Without price sensitivity, and given that the economic modelling for this policy was less than robust, the Government's expectation that "publishers will need to set their APCs at a level that allows them to effectively compete"[108] seems overly optimistic.

76.  Both the House of Commons Science and Technology Committee's 2004 Report, and the Finch Report, highlighted the fact that VAT currently applies to e-journals, but not to print journals. This creates a clear disincentive for online access, and therefore to open access. Despite this anomaly, the Government has asserted that it does not consider it worthwhile to pursue a reduction in VAT rates with the European Union.[109] We disagree, and believe that the Government should be willing to increase its efforts to remove or reduce this barrier.

77.  If RCUK and the Government continue to maintain their preference for Gold, they should amend their policies so that APCs are only paid to publishers of pure Gold rather than hybrid journals. This would eliminate the risk of double dipping by journals, and encourage innovation in the scholarly publishing market.

78.  The evidence we saw suggested that authors have little price sensitivity when they choose a journal in which to publish.[110] We recommend that RCUK amends its policy to allow grant funds to be used for publishing charges, which is by far the most common model internationally. This would re-introduce price pressure by prompting authors to make an informed decision on where to publish. We recommend that the Government endorse genuine price transparency from publishers so that it is clear to subscribers which services and costs are and are not included in the overall subscription price, enabling subscribers to assess the costs and benefits of purchasing.

79.   We strongly agree with the recommendations of the House of Commons Science and Technology Committee and the Finch Report that the Government should work to introduce a reduced VAT rate for e-journals. Given the emphasis the Government has placed on the benefits of increasing open access, the Government should seek a derogation on this point from the European Commission.

80.  We further recommend that the Government indicates clearly that non-disclosure clauses should not be included in publishing contracts which involve public funds. In the first instance, this should be achieved through dialogue between Government, publishers and universities. If the use of non-disclosure clauses persists, then the Government should consider referring the matter to the Competition Commission.

105 Back

106   Ev 41 Back

107   Q121 Back

108   Ev 39 Back

109   Ev 58 Back

110   Ev 83 Back

previous page contents next page

© Parliamentary copyright 2013
Prepared 10 September 2013