Back in March several French publishers were raided, including Hachette Livre, Gallimard, Flammarion and La Martinière. It was all to do with ebook pricing. Many of the publishing companies under scrutiny have only recently got into ebooks and haven’t setup a proper pricing policy yet. For now, they are going along with a temporary agency model for pricing, and this is what is causing the problem. Agency pricing is very like the net book agreement that used to hold sway in the UK and Ireland. Under this, publishers set the price at which a book was to be sold, and that was that. Booksellers couldn’t sell it for less. The net book agreement was brought down when supermarkets and the big chains of bookshops challenged it.
A statement from the Directorate General for Competition read: “The European Commission can confirm that on 1 March 2011 Commission officials initiated unannounced inspections at the premises of companies that are active in the e-book (electronic or digital books) publishing sector in several Member States. The Commission has reason to believe that the companies concerned may have violated EU antitrust rules that prohibit cartels and other restrictive business practices (Article 101 of the Treaty on the Functioning of the European Union).”
At the moment France adheres to the Lang Law for physical, i.e. paper, books. It establishes a fixed price for books sold in France and limits the discounts that can be offered on them by booksellers. But it doesn’t apply to ebooks. So publishers are fixing the price in stone and EU officials don’t like it, even though the French Competition Authority said in 2009 that the agency model was “a possible solution” for pricing ebooks. However, by restricting booksellers from offering discounts to promote some of the titles they stock, this goes against some of the objectives of the culture ministry in France.
Recently both houses of the French parliament gave their approval to a law that replaces the Lang Law, and goes further to now encompass ebooks. Under the proposed scheme, French publishers will set a single price for their e-books, and distributors must follow it, no matter where they are based. The EU won’t like it, that’s for sure.
It seems odd that publishers are reverting to this old practice of price fixing and making books more expensive than they need to be. Some pro-electronic publishing forums have suggested that, like cigarettes, ebooks produced by the publishers adopting the agency model should come with a warning along the lines of: Warning: buying this book will support a publisher who wants to increase book prices for all.