New chapter in book price-fixing saga

Date: 09/09/1999

By Renée Cordes

AUSTRIA and Germany are pressing book publishers and sellers to come up with fresh evidence that their controversial fixed-price system does not violate EU competition rules.

An official at Austria's Federal Chancellery in Vienna said the government had given the book industry there until next month to come forward with new arguments supporting the centuries-old practice to present to incoming Competition Commissioner Mario Monti.

She added that representatives from both countries were planning to hold talks with Monti as early as next month, soon after he takes office.

At his European Parliament confirmation hearing last week, Monti said he shared the view of his predecessor Karel van Miert that the price-fixing system in German-speaking countries violated EU competition rules.

"Frankly I am not persuaded that a restrictive agreement that prevents, among other things, lower prices can be seen as a measure of promotion of culture," said Monti, adding that reducing book prices would, on the other hand, promote culture.

He added, however, that he was "open to discuss possible solutions", provided the industry could persuade him that such schemes were an effective means of promoting culture with a "minimum possible" breach of competition rules. This has fuelled hopes that the countries concerned could be allowed to retain the system, which they insist is necessary to ensure a variety of titles on the market.

Anton Hilscher, president of the Austrian book trade association, said the industry saw Monti's statement as an opportunity to buy time to make a stronger case to the Commission. He said publishers and sellers were busy gathering information on the adverse effects of the abolition of a similar scheme in the UK 18 months ago which he hoped would buttress their case.

Hilscher claimed that since fixed book prices were scrapped in the UK, the average price of a book there had risen by about 6.9% while the number of publishers and retail outlets had decreased, showing that the lack of fixed prices had actually discouraged competition.

Before its summer recess, the outgoing Commission issued a preliminary ruling against the price-fixing scheme, but delayed taking a final decision at the insistence of former Commission President Jacques Santer.

Eugen Emerling, chief spokesman for the German book publishers' association, said he was "confident" that both sides would be able to find a solution. But legal experts say book firms will find it difficult to convince Monti to accept their case for a stay-of-execution unless they produce radically new arguments. They also say a decision by the Swiss antitrust authorities this week to ban a similar cartel will give the Commission added ammunition in its fight against the scheme.

Fixed prices violate the spirit of competition," said one. "I am not convinced that Monti will be open to a compromise on this."