Thursday, October 22, 2009

ABA Asks for Government Investigation of Price Wars

Reprinted with permission of Publishers Weekly

By Jim Milliot -- Publishers Weekly, 10/22/2009

In a letter sent to the antitrust division of the Department of Justice Thursday, the board of directors of the American Booksellers Association requested that the government begin an investigation into what the organization believes is the illegal predatory pricing policies being carried out by Amazon, Wal-Mart and Target in selling 10 hardcover titles for as low as $8.98. The ABA requested a meeting with officials as soon as possible, arguing that left unchecked, the predatory pricing policies “will devastate not only the book industry, but our collective ability to remain a society where the widest range of ideas are always made available to the public.”

The letter charged that the big box retailers are using predatory pricing practices to “attempt to win control of the market for hardcover bestsellers.” By selling books below cost, Amazon, Wal-Mart and Target “are devaluing the very concept of the book. Authors and publishers, and ultimately consumers, stand to lose a great deal if this practice continues and/or grows,” the letter stated. Furthermore, the letter noted, the companies involved in the price war are not engaged primarily in selling books, yet their fight could result in the entire book industry becoming collateral damage.

The letter added that the price war over hardcovers was precipitated by Amazon’s decision to price e-books at $9.99. “We believe the loss-leader pricing of digital content also bears scrutiny,” the letter stated.