Ways to avoid price wars: Live in Europe
Last Monday, a MobyLives commentary suggested American publishers should respond to the Wal-Mart/Amazon/Target price war by emulating European publishers and colluding — legally — to fix prices and end discounting. Friday, the Wall Street Journal ran a story by Vanessa Fuhrmans pointing out that, “In much of Europe, the discount-pricing battle that has erupted among Wal-Mart Inc., Amazon.com Inc. and Target Corp. could never happen because most major publishing markets, with the exception of the U.K., are bolstered by laws requiring all bookstores, online retailers included, to sell books at prices set in stone by publishers.”
For example, Fuhrmans observes, “Many in German attribute the country’s thriving literary and publishing scene to a system that outlaws the discounting of virtually all new books for 18 months. The system protects independent booksellers and smaller publishers from giant rivals that could discount their way to more market share. Along with 7,000 bookshops, nearly 14,000 German publishers remain in business.”
And that’s not all: “Defenders of the 120-year-old fixed-price system argue that prices of older books also are on average cheaper than in many other markets, since publishers and booksellers aren’t forced to make up for money-losing discounts on more popular books.” (For more on the impact of price-fixing — also known as “net pricing” — in Germany, see the earlier Moby story.)
Not that the European price-fixing doesn’t have its opponents. Who could oppose such a long-standing and obviously successful policy that Europe’s publishers, writers, and retailers all support? An American company seeking to take over their market via aggressive discounting, that’s who: Amazon.com, says Fuhrmans. The company was convicted in a French court last year of violating French laws against discounting. They’re appealing.




