Hindering Comparison Shopping?

Southern Connecticut State tells Chegg that university's contract with Barnes & Noble bans anyone else from marketing textbook rentals to students.


September 2, 2014

For the second time in two weeks, a university is being criticized for trying to prevent its students from learning about textbook options that may be less expensive than those promoted by the institution.

Last month, George Washington University -- facing faculty criticism -- backed off demands that professors not share information about anywhere other than the university bookstore to find textbooks. In telling professors in July not to let students know about other options, George Washington officials cited "contractual obligations" to Follett, which runs its campus bookstore.

On Friday, Chegg -- a textbook rental service -- posted on social media a cease-and-desist order it had received from Southern Connecticut State University ordering the company not to market to the university's students. In this case, Southern Connecticut cited provisions of its contract with Barnes & Noble.

Chegg CEO Dan Rosensweig, in posts on LinkedIn and Twitter, noted that he had criticized the George Washington deal, and said that the Southern Connecticut action indicated a broader problem with colleges making deals that limit student choice and that may cost students money. Of Southern Connecticut, Rosensweig wrote: "So the school does not want their students to know that they have choices when it comes to getting their textbooks. Which given the Internet, and how smart and savvy students are, seems like a silly idea."

The university's letter to Chegg, from Cynthia Shea-Luzik, manager of procurement services, said: "It has come to my attention that your company has been advertising your services on Southern Connecticut State University’s (SCSU) campus. This letter is to inform you that SCSU has an exclusive contract with Barnes & Noble College Booksellers for bookstore services, of which renting textbooks is a part of this contract. I respectfully request that your company cease all solicitation activities on SCSU’s campus immediately as this violates our exclusive contract."

Chegg also released its response, from Rob Chesnut, the company's general counsel. He noted that Southern Connecticut has been encouraging students to become more financially literate and to remember that "every penny counts."

And Chesnut said that Chegg does not consider itself bound by any deal made by Southern Connecticut with Barnes & Noble. "So with all due respect to your request, we will continue to provide a better alternative to the high price of textbooks to hard working students and their families whenever possible, and to promote our services to all students," he wrote. "We are under no obligation to honor your exclusive bookstore deal, as we are not a party to that contract and believe that it does not serve the best interests of students."

Barnes & Noble did not respond to an email seeking comment.

Patrick Dilger, a spokesman for the university, said that because of the holiday weekend, he could not reach everyone involved in the bookstore contract, but he confirmed that the university agreed to exclusivity terms with Barnes & Noble that require the university to prevent anyone else from marketing to students. Dilger said that students are of course free to go online and order books elsewhere, but that they must make these choices without any encouragement from marketing on campus.

He said that there is nothing objectionable in agreeing to bar marketing to students. "You have contracts with food service, the credit union and book providers," he said, and many of those contracts require exclusivity. Asked if that means the university would send a letter ordering a local pizza place not to market to students, he said that the university has arrangements with local restaurants. Asked if the university would try to block marketing by a pizza place without such an arrangement, he said he didn't know.

Dilger said that the university used the state procurement process for its contract with Barnes & Noble.


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