FTC Cites 6 Big Publishers for Book Pricing Bias

The Federal Trade Commission on Thursday issued complaints against six of the nation’s largest book publishers for allegedly discriminating illegally against independent bookstores by selling books at discounted prices to major bookstore chains.

The complaints allege that the six publishers sell books at lower prices to large bookstore chains, including the nation’s three biggest: Waldenbooks Inc., B. Dalton Bookseller and Crown Books Corp.

The complaints were issued against: Harper & Row Publishers Inc., Hearst Corp. and its William Morrow & Co. unit, Macmillan Publishing Co., Putnam Berkeley Group Inc., Random House Inc. and Simon & Schuster Inc.

The complaints charge that the publishers use pricing schedules that charge a lower price per book on large orders.

The publishers also allegedly treat orders placed by bookstore chains as a single order, even if the books are shipped separately to individual chain outlets, according to the complaints.

“The chain stores therefore allegedly pay lower prices than independent bookstores that receive shipments as large as or larger than the shipments to individual chain outlets,” the FTC said.

The higher prices paid by independent stores have hurt them financially, limiting their ability to compete with the bookstore chains for sales to consumers and retail locations, the complaints said.

In response to the FTC action, Simon & Schuster said in a statement: “Our pricing practices have always been fair and have resulted in providing the consumer with the broadest range of books at the lowest possible price. The FTC is going to have a real fight on its hands.”

William T. Loverd, a Random House spokesman, said the company had not seen the complaint and could not comment on specifics.

But he said the company has been cooperating with an FTC investigation of pricing practices of publishers and “we are convinced that our pricing of books is both lawful and fair.”

Harper & Row spokeswoman Barbara Hufham said in a statement that her company also cooperated with the FTC’s eight-year investigation. “We are convinced our trade practices are entirely proper,” she said.

The FTC voted 3-1 with one abstention to issue the complaints, which begins a proceeding in which a formal hearing will be held.

If the allegations are upheld, the FTC could order the publishers to stop the pricing practices.

FTC Chairman Daniel Oliver said in a dissenting statement that the practices did not appear to violate antitrust law and probably have not hampered competition.

Additionally, he said, most of the price differences probably are justified by differences in the cost of selling to different buyers and the publishers cited probably are responding to competition from other publishers.