Nine New Lawsuits Target ‘Inclusive Access’ Textbook Programs, Alleging Antitrust Violations

May 21, 2020

Student complaints about the digital textbook and courseware bundles now assigned in many college classes have escalated into a new batch of legal challenges. Nine lawsuits filed in March, April and May against major textbook companies and retailers take aim at their bulk deals with colleges to offer online course materials, sometimes referred to as “inclusive access” programs.

Through these deals, colleges become digital book brokers, selling students access codes for packaged digital texts and online homework systems created by commercial publishers. These programs have drawn criticism because some students would rather shop around on their own for better deals. And students are used to being able to resell their print textbooks after a semester is over, but digital codes can’t be shared or resold. But publishers and booksellers say that the inclusive access services offer students books at reduced, bulk rates and therefore save them money.

The new lawsuits argue that inclusive access deals strangle the used book market and therefore drive up textbook prices. And they allege that publishers and retailers are violating antitrust laws because they, as one case puts it, “colluded to restrain trade in textbooks through the Inclusive Access conspiracy.”

“If one singular publisher did this alone, it wouldn’t necessarily drive up prices. Professors and universities could choose a different textbook, different course materials,” says Beth Fegan, managing partner at FeganScott law firm who is representing two students in one of the cases. “It’s the fact that they’re working together to exclude competition that’s the problem. With their collective power, they could shut down resellers of books.”

The suits name publishers Cengage Learning, McGraw Hill, and Pearson Education, as well as book sellers Follett Higher Education Group and Barnes & Noble. They were filed on behalf of individual students in the U.S. District Courts for the Northern District of Illinois, the Southern District of New York and the District of New Jersey. But the plaintiffs’ attorneys are seeking court approval to turn the lawsuits into class-action cases that represent all students who have been assigned course material bundles.

Pearson, McGraw Hill and Follett defended their inclusive access programs in email interviews with EdSurge. Cengage declined to comment and Barnes & Noble did not return requests for comment in time for publication.

“Pearson denies the allegations in the lawsuit and intends to defend itself vigorously,” said Scott Overland, director of media relations for Pearson, in an email interview. “Pearson continues to stand by the inclusive access model, which offers real benefits to students, instructors and institutions.”

‘Advocating For the Reseller Market’

In addition to offering bulk discounts, proponents of inclusive access deals say that they help to ensure students have all necessary materials for their classes. More than a third of student respondents to a 2019 survey by the National Association of College Stores reported showing up for the first day of class without any of their assigned texts.

“With Follett ACCESS, students have what they need on the first day of class—which levels the playing field for all students, regardless of economic background or social status,” a Follett spokesperson said in a statement.

But legal challenges to inclusive access programs have accumulated over the past few years, as retail companies and consumer-advocacy organizations question whether colleges, publishers and bookstores are following relevant federal regulations. Such rules require that textbook bundling deals offer materials to students at discounted prices and also allow them to opt out of the programs.

In early 2019, a second-hand bookstore chain sued Trident Technical College in Charleston, arguing that the college was not allowing students to seek course materials on their own. In January, several independent booksellers filed a class-action suit against large publishers and bookstores for allegedly eliminating secondary book markets.

And in February, nonprofit advocacy organization U.S. Public Interest Research Group—an outspoken skeptic of inclusive access deals—published a report suggesting that contracts establishing bulk book partnerships between colleges and publishers ultimately “push the rapid adoption of access codes across the institution.” Many such contracts set target numbers of student subscribers and “minimum usage rates” of participants.

“I think the ruling we would seek is that this agreement is a violation of antitrust laws—having the court strike the agreements these publishers have entered with universities that require a very large number, in comes cases north of 95 percent of students, to purchase materials,” Fegan says. “They have to force the students to stay in it to comply with agreements. In my mind it makes the opt-out option illusory.”

Cengage, McGraw Hill and Pearson previously told EdSurge that their companies do not set quotas for their inclusive access programs.

Attorneys for the new consumer lawsuits are working together and are also coordinating with the lawyers representing independent bookstores in the retail suit, Fegan says: “Our interests are certainly aligned: advocating for the reseller market. That’s what ultimately will drive the prices down.”

She notes that the consumer cases may be consolidated this summer. But she adds that a judge’s ruling on whether the cases meet the criteria for class action may not happen for at least a year to 18 months.

Fegan’s clients are sisters Grace Kinskey and Elizabeth Kinskey, undergraduate students who were expected to participate in inclusive access programs while taking classes at Illinois Central College and Duquesne University, respectively.

“Because it was required, there were no alternatives, no price competition,” Fegan says. “They were in essence overcharged.”


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