Six US Democratic senators are pressing the Department of Justice to scrutinise what they have called a “problematic” merger between two of the country’s largest textbook publishers, Cengage and McGraw-Hill.
“The combination of high concentration, a history of skyrocketing textbook prices that far outpace inflation, and a captive market makes this anticompetitive merger one that risks further aggravating the affordability of education,” Senator Richard Blumenthal and five colleagues said in a letter, according to Reuters.
The senators argue that, along with Pearson, the companies control more than 80% of the US publishing market – in which they increased prices at a rate of three-times inflation between 2002 and 2012 – which could reduce competitiveness and leave students ultimately worse off.
A successful merger of McGraw-Hill, which is owned by private equity behemoth Apollo Global Management, and Cengage, which is owned by a cluster of buyout houses, would form the US’s second-largest publisher, worth around $5 billion. The merger was announced in May last year.
The senators have also warned of potential privacy issues relating to the misuse of students’ data, which includes sensitive information such as education plans, assignments, reports from counsellors and medical records.
“We urge the [anti-trust] division to carefully review this problematic merger in light of these concerns,” they wrote.
A website containing details of the merger states: “Cengage and McGraw-Hill are joining to create a new global learning company to provide students with more affordable access to superior course materials and platforms. The new company will positively impact the lives of millions of students globally.”
In July last year, McGraw-Hill’s former chief financial officer resigned after spending just six months in the role.