WRITTEN QUESTION E-1942/97 by Friedhelm Frischenschlager (ELDR) to the Commission (4 June 1997)

Subject: Retail price maintenance for books in the German-language area - Distortion of competition by book clubs - Restrictions on competition in the European book market

There are many different kinds of restrictions on competition in the book markets of the various language areas in Europe (retail price maintenance, recommended retail prices, etc.). There is an apparent contradiction between the principle of free competition and retail price maintenance for books. In Austria at present, around a quarter of books which are supposedly subject to retail price maintenance are being sold at lower prices through book clubs. Unlike small booksellers, however, book clubs can legally bring out their own editions under licence and offer them at lower prices. Neither booksellers nor publishers in Austria have the financial means to print their own licensed editions. It appears that the current retail price maintenance for books ensures substantial competitive advantages for big (German) publishers.

Are there arguments which justify this practice in the German-language book market, which distorts competition for small booksellers? If not, what steps will the Commission take to prevent it?

Does the Commission believe that it makes sense for all books, including best-sellers, which do not appear to need such protection, to be protected by retail price maintenance?

Is the Commission currently investigating restrictions on competition in the various European book markets? If not, why not? If so, have such investigations produced any initial results as yet? If so, has the Commission already used them as a basis for considerations about competition law or for adopting measures? If so, which? What are the five most important considerations guiding the Commission in assessing the situation of book markets in Europe? What is the Commission's view of the argument that the specific character of the book market (education, culture, linguistic and national identity are involved) means that it needs special competition rules as regards both the production and the sale of books?

Answer by Mr Van Miert on behalf of the Commission (4 July 1997)

The Commission is currently examining the compatibility of the German/Austrian resale price maintenance arrangements for books with Article 85 of the EC Treaty in the light of the notification by German and Austrian publishers and various complaints. The examination encompasses every aspect of cross-border resale price maintenance for books, including, therefore, the issues raised by the Honourable Member, namely preferential pricing by book clubs, the inclusion of best-sellers in the resale price maintenance arrangements, and the cultural arguments (specific nature of the book market in terms of culture, education, and linguistic and national identity).

In earlier decisions on cross-border resale price maintenance for books, the Commission refused to exempt such systems from the prohibition on restrictive practices in Article 85(1) of the Treaty on the ground that the conditions for exemption were not met. Even the cultural aspects which were adduced by the applicants and considered by the Commission did not lead to a favourable outcome (see the decisions in the VBBB/VBVB case of 25 November 1981 ((OJ L 54, 25.2.1982. )) and the Net Book Agreement case of 12 December 1988 ((OJ L 22, 26.1.1989. ))). In these decisions the essential considerations are reproduced which previously guided the Commission in such decisions when assessing the relevant book markets.

As far as the competition aspects are concerned, the Commission does not systematically examine all European book markets, but instead acts on a case-by-case basis in response to notifications and complaints.