National price-fixing under discussion

Date: 05/12/1996

EUROPE'S publishers will be watching this month's meeting of culture ministers keenly for clues as to which way the European Commission will jump on an Austro-German book pricing agreement.

Although the Commission has long insisted that it will not threaten national price-fixing, it does apply EU competition rules when such arrangements spill over borders.

Culture Commissioner Marcelino Oreja is due to give an oral report to ministers at their 16 December meeting which could provide pointers to his likely approach to the German-Austrian Sammelrevers case.

At the moment, a central publishers' authority in Germany penalises retailers who undercut minimum prices. Although the arrangements are voluntary, about 90&percent; of Germany's publishing industry subscribes to them. The question now is whether extending the system to Austria contravenes EU rules forbidding industry cartels.

Sammelrevers was first notified to the Commission's Directorate-General for competition (DGIV) in 1993, before Austria joined the Union. DGIV responded with a 'comfort letter' in 1994, nominally protecting the industry from legal action while the Commission decided whether it could accept the deal.

That protection was extended in June this year, but the final outcome of the case remains far from certain.

While discussions continue, the Federation of European Publishers (FEP) is lobbying hard to convince the Commission to accept cross-border pricing deals in principle. “We believe that books do not stop at borders,” explains FEP's Anne Bergman. “It is hypocritical to allow pricing deals only within national boundaries.”

Case history suggests that should the Commission judge the case to be anti-competitive, the European Court of Justice will support it.

In 1984, the ECJ upheld a Commission decision not to allow a similar agreement between Flemish and Dutch publishers and called on France to amend laws restricting the price of Belgian books. However, in a 1994 case challenging the net book agreement between the UK and Ireland, the ECJ judged that there was not enough information to justify stopping it.

The FEP claims most people support the German-Austrian deal - except for an Austrian multimedia group Libro - and fears the Commission is being unduly swayed by this one organisation.

Commission officials stress that this is not a matter of counting the votes on each side, but is a legal question which must be settled according to the law. The federation argues precisely the opposite: that it is a political question and should be decided by member states.