There is failure in digital markets for libraries, schools, universities, and other public-service organizations, and libraries are officially fed up with it. We’ve tolerated abusive pricing and restrictive licensing terms long enough. It’s time for Congress to act.
The tipping point for libraries came in July 2019, when Macmillan Publishers announced an embargo of library e-book lending. The company now permits a library system – whether it be the massive Los Angeles Public Library or the Little Compton (R.I.) Free Library –to purchase only one copy of a new e-book until the ninth week after release. The outrage from libraries across the nation is the siren of a catastrophe in the making, absent federal action.
For decades, readers have enjoyed access to non-digital works thanks to U.S. copyright policy, which balances the need for an informed citizenry with incentives for authors to publish. The owner of a physical copy of a work has legal rights that allow lending, giving away, archiving, preserving, and selling it. Once in possession, a copy may be adapted for people with disabilities. A reader has absolute privacy to control how and when to read or view a work. The right to use materials in educational settings, such as showing a movie in a classroom, is specifically allowed by federal law.
Under this model for analog content, businesses have been profitable over the long term. Public-service organizations purchase works and make them available in accordance with their missions to serve their respective communities. This paradigm makes sense and functions well.
For digital works, by contrast, the markets are not working in serving the public interest. Anti-library business models such as Macmillan Publishers’ new embargo on e-book sales to libraries or Amazon’s refusal to sell any of its titles to libraries, are evidence that market failure is accelerating. As the demand for digital content increases, we ignore this evidence to our peril.
By contrast, access to digital works is almost exclusively determined by a contract among parties. Public service organizations no longer have any legal rights or expectations—only what appears in the text of the contract. Each digital service involves its own contract with unique terms frequently offered only on a non-negotiated basis.
Contracts can specify that works cannot be used in a classroom setting. Contracts can prohibit modification of materials to accommodate people with disabilities. Contracts can prevent the preservation of materials by libraries, as the very stewards of the cultural heritage of a nation or a community. And contracts often mandate much higher prices – as much as five times the consumer price. In the case of Amazon, no contract is offered, so there is no possibility of access. Public-service organizations face all of these problems and more.
In higher education, the battle with scientific and technical journal publishers has been going on for several decades, especially over high prices. In the first part of 2019, the libraries of the University of California (UC) system took the drastic step of cancelling its contract with Elsevier, one of the largest scholarly publishers in the world. The contract was so deficient that UC determined it could not be Elsevier’s customer any longer, depriving its researchers access to a large body of published research. This market failure does not bode well for America’s future research competitiveness.
It is time for Congress to act. Contracts by themselves are not the answer in the long run. No matter how accommodating today, they can be changed by whim tomorrow. Rights for public service organizations must be provided by law. For example, contracts inconsistent with library copyright exceptions are unenforceable in some other countries; Congress could mandate likewise in the United States.
The House Judiciary Subcommittee on Antitrust, under the leadership of Reps. David Cicilline (D-R.I.) and Jim Sensenbrenner (R-Wis.), is undertaking an investigation of the competition in digital markets. In response to a request for comment, the American Library Association submitted detailed information highlighting the impact of market-distorting practices in the digital content industry. On behalf of libraries in every congressional district, the ALA urges the Subcommittee to intensify its activities and calls upon the U.S. Department of Justice and the Federal Trade Commission to investigate as well.
Alan S. Inouye is senior director of public policy and government relations for the American Library Association (ALA). His expertise covers a wide range of library-related policy issues, including copyright, e-books/digital content, federal funding, technology and telecommunications policy, as well as small business and workforce development.