FTC Lawyers Ask Agency to Block Deal by Barnes & Noble

Federal Trade Commission lawyers, in a rare challenge to a merger between a wholesaler and retailer, will recommend that the agency oppose Barnes & Noble Inc.’s $600-million purchase of Ingram Book Group, people familiar with the FTC investigation said Monday.

The American Booksellers Assn., which represents 4,066 independent U.S. booksellers and online bookstore Amazon.com, convinced FTC lawyers that Barnes & Noble, the No. 1 U.S. book retailer, would control competitors’ access to books if it acquires Ingram, the largest U.S. book wholesaler.

If the four-member FTC accepts the staff recommendation, it would seek a federal court order to prevent Barnes & Noble from buying Ingram during an administrative trial on the challenge. Barnes & Noble could appeal any decision in a process that could take years in federal court.

Though the FTC has shied away from challenging mergers between retailers and wholesalers since before the administration of President Reagan, Commission Secretary Donald Clark indicated in a Jan. 26 letter to members of Congress that the agency would be willing to fight this acquisition if it harmed competition.

The American Booksellers Assn. and the Author’s Guild, which represents writers, have provided the FTC affidavits from their members criticizing the purchase. FTC attorneys have interviewed witnesses and could use such testimony in a case seeking to block the combination, according to those familiar with the investigation.

The booksellers group, which has waged a public campaign against the deal, argues that the purchase would give Barnes & Noble access to information about its competitors’ book-buying practices.

Other opponents of the combination, including Amazon.com, argue that the acquisition would let Barnes & Noble delay delivery of bestsellers to its retail competitors. Amazon.com competes for online sales with Barnesandnoble.com Inc.