Elsevier’s Dominance in the FIS Market Threatens Competition in Related Markets

Elsevier’s Dominance in the FIS Market Could Threaten Competition in Related Markets

With the acquisition, Elsevier is poised to leverage its leading position in the Faculty Information Systems (FIS) market in ways that could extend its market power in the academic publishing and research analytics markets.

Elsevier appears to be constructing an increasingly integrated platform with products spanning the research process, many of which are market leaders in their category.¹ As this integration progresses, Elsevier’s reach will begin at the beginning of the research process with tools that assist with the formation of research questions, funding and methods, data collection and analysis, and research collaboration tools. Elsevier is also the leading publisher of academic journals, which report on the results of this research. Elsevier systems also extend well beyond the publication process, and into the research evaluation process, including providing academic metrics, researcher networks, and analysis related to academic employment.

Like the supply chain for other goods and services, the outputs from one stage in the research production process serve as inputs for the next. Elsevier’s dominance in one stage of the academic research process can be leveraged to advantage it in others and to foreclose future competition. Interfolio provides Elsevier with a keystone component for combining its systems into an integrated research platform where each piece reinforces and extends the market power of the others.

In Interfolio, Elsevier acquires the leading platform through which institutions take the inputs from the two major sides of its business (the published results of research and research analytics assessments of that activity) and make business decisions for that institution based on both. This positions Elsevier to be able to extend its market power in two ways: by privileging its own related products within Interfolio’s FIS and by leveraging data extracted from Interfolio to further advantage Elsevier in its other products.

Potential Extensions of Market Power Driven by Privileging Elsevier Products within its FIS

Research analytics represent an increasingly important area of functionality for FIS products.² Interfolio offers integrations with a variety of data partners, including both Elsevier and Elsevier competitors Clarivate and Digital Science.³ Elsevier will now be incentivized to privilege its own services as data sources within Interfolio or even discontinue integrations with other service providers with competing product lines, which would limit consumer choice.

Such a move would tilt FIS products away from a future that could be data source-neutral in a manner that allows integrations across a variety of vendors. This potential self-privileging would be a significant step toward a future where FIS products represent one part of larger ecosystems of services that would limit consumer choice in related markets, such as research analytics. The consistency offered by Elsevier’s suite of research analytics tools could then significantly advantage these products over competitors’ for current and future institutional customers that have adopted Interfolio’s FIS.⁴ Therefore, Elsevier would be better positioned to capture further market share from competitors like Clarivate in the already concentrated market for research analytics. This dynamic also works in reverse. Institutions using Elsevier’s research analytics products would likely feel locked in to using Interfolio if it were the only FIS product integrated with the analytics products they already use.

Potential Extensions of Market Power Driven By Data

FIS products are quickly becoming central to the operation of many colleges and universities. The role of FIS products in centralizing disparate data sources to support institutional decision-making makes them a valuable source of proprietary data. Elsevier is now positioned to be able to extract more detailed data about researchers and their activity, much of which is non-public and some of which is sensitive.⁵ Though documentation requirements vary by institution, this information could include faculty research and work plans; grant funding information; reviews for hiring, promotion, and tenure; and information about faculty seeking new positions.

In Elsevier’s academic publishing business, faculty activity data that provides insight into emerging research interests and new projects could further extend the company’s strategic advantage and marginalize competitors. This information could be used to identify nascent trends for new publications, to recruit “rising stars,” and to solicit article submissions ahead of the competition. These advantages could significantly increase Elsevier’s power in the academic publishing market in which it is already the dominant player and could reduce the possibility of future deconcentration in this market.

In Elsevier’s research analytics business, Interfolio’s faculty activity data could be used to develop new metrics, such as productivity assessments, that could only be generated by owners of a widely adopted FIS product. These could be created from internally reported activities before results are publicly available and could be based on information that never becomes publicly available, such as faculty research and work plans, or that is not easily accessible for other analytics providers, such as teaching loads and committee service. Such insights could also be sold as competitive intelligence to institutions or commercial firms that can afford it.

As SPARC detailed in a previous letter opposing Clarivate’s acquisition of ProQuest,⁶ the research analytics market is already becoming a duopoly. The incorporation of Interfolio data into Elsevier analytics products will likely further raise the barrier to entry in the research analytics market and strengthen Elsevier relative to smaller players, marginalizing the latter and cementing the loss of competition in this market. The resulting potential negative impacts on competition across the markets underlying the research process could lead to a variety of consumer harms.