FTC Drops 8-Year Probe of Discount Book Prices to Chains

The Federal Trade Commission said Friday that it has dropped its eight-year investigation into allegations that major U.S. publishing companies unfairly discriminated against independent booksellers by giving discounts to major bookstore chains.

The FTC said the bookselling industry has changed so dramatically since the controversy began in 1988 that the investigation was no longer worth the time and expense. The agency dropped the matter even though FTC lawyers in 1992 negotiated out-of-court settlements with six major publishers.

However, the cases dragged on while the agency continued its investigation of whether to charge a seventh, Bertelsmann’s Bantam Doubleday Dell Group.

The FTC said it is closing the probe of Doubleday and dropping complaints it had already filed nearly eight years ago against six other publishers: News Corp.’s HarperCollins Publishers; Hearst Corp.’s William Morrow & Co. unit; Viacom Inc.’s Simon & Shuster and MacMillan Publishing; Advance Publications Inc.’s Random House Inc.; and Seagram Co.’s Putnam Berkley Group Inc.

Since the complaints were filed, the FTC said, “the industry has changed appreciably” and the “dynamics and structure of the book distribution industry has evolved.”

The cases were no longer worth pursuing, in part, the FTC said, because some publishers had agreed to change their practices, in negotiated settlements of private lawsuits by booksellers. The commission said some of the provisions of the agreements already negotiated with the publishers might not have been effective, because of a legal loophole that would have permitted them to engage in the same practices used by competitors who are not covered by an FTC order.

Further investigation, the commission said, does “not appear to be a necessary or prudent use of scarce public resources.”

The commission voted 3-1 to drop the cases, the FTC said.