Four of the biggest publishing houses in Norway are under investigation for a possible breach of competition law. If they are found guilty, the national agreement on fixed prices could be in danger.
Last week Konkurransetilsynet – the equivalent of the Competition Commission – paid a visit to Cappelen Damm, Gyldendal, Aschehoug and Schibsted, as well as the distribution company they co-own, Bladcentralen, in order to secure evidence.
“The reason for this is that Konkurransetilsynet wishes to write off or confirm a suspicion of a possible violation of the competition law. The matter is a possible refusal of delivery of books to the mass market, for example grocery stores and convenience stores”, said Karin Stakkestad Laastad, legal director of Konkurransetilsynet, in a statement. Konkurrensetilsynet did not comment on what kind of evidence has been seized, or on how long the investigation will take. The publishing houses and Bladcentralen declined to comment.
“It is clear that this is a matter of disagreement on how the distribution is organized, but I cannot comment any further on this issue. We have to wait and see the result of the investigation first”, said Kristenn Einarsson, director of the Norwegian Publishers’ Association.
Magnus Reitan, c.e.o. of a smaller book distribution company, Interpress/Reitan Convenience, came forward as the one who notified the Commission. According to him, the four publishers had stopped Interpress delivering their books, which gave Bladcentralen an exclusive position.
However, the publishers were not the first to refuse co-operation. According to the Norwegian newspaper Dagens Næringsliv, Interpress prevented Bladcentralen in January from delivering books to the Narvesen Convenience Stores (owned by Interpress). After that, Cappelen Damm, Gyldendal, Aschehoug and Schibsted informed Interpress that in that case, they would no longer deliver books to Interpress.
This is not the first time Norway has had competition problems. Smaller publishing houses have accused bigger ones of cartels in pricing, discounts and excluding publishers from both Bladcentralen and the book store chains, which are owned by the big publishers.
But according to Kristenn Einarsson, there is no structural problem within the trade. As for the vertical integration criticism, he said, the PA are conducting regular investigations to see if the publishing houses who own the chains have stronger representation in the stores. And the pricing problems could be solved by a law for the book price, instead of today’s looser agreement. “We in the Publishers’ Association think that since we have fixed price in Norway, we should also have a law to support it. But the new government does not. So a trade agreement is the next best thing”, he said.
Until the Konkurransetilsynet’s investigation is finished, right wing politicians in Stortinget (the Parliament) want to freeze the process of renewing the trade agreement. But Kristenn Einarsson was not worried, saying: “The minister for enterprise, who is from the same party as those in Stortinget who have made statements, has said this will not affect or delay the trade agreement, and I agree with her. I assume that what she says will be valid for what the government chooses to do.”