Borderline

Large chains threaten to limit book offerings

With the possible exception of the Internet, the most important source of information today is published text. The sheer diversity of authors, publishers and bookstores guarantees material on any topic of interest. While recent trends toward larger bookstore chains, such as Borders Group, Inc., and Barnes & Noble, have improved customer service and satisfaction, a lawsuit filed in California claims that these national chains use unfair marketing practices. The American Booksellers Association and 25 independent bookstores, the plaintiffs in the antitrust suit, allege that Borders and Barnes & Noble receive illegal price advantages from publishers. They requested that the court enforce antitrust codes against the national chains not only to protect consumers' pockets but also to reverse the rapid dissolution of independent bookstores. The U.S. District Court ought to take the importance of a heterogeneous bookstore industry into account when determining whether these discounts from publishers violate antitrust laws.

The primary complaint in the lawsuit claims that the large national chains demand discounts from publishers. Since the chains command a significant portion of the market, they have the capability to pressure the publishers for special privileges, which the plaintiffs believe are injurious to small, independent competitors. Against the power and size of the large chains, smaller competitors have a poor chance for survival. But one should not limit the issue to unfair pricing practices. After all, the larger chains have made printed material more accessible and cheaper to most consumers. Thus, the suit seems to ignore the antitrust laws' directive to protect the consumer through fair competition. But the present patterns in the industry will likely lead to conditions that will not favor the consumer at all.

A result of the alleged discounts is closer relationships between the bookstores and publishers. The plaintiffs claim publishers consult the large chains regarding a proposed publication before offering the author a contract. By dominating the market, these large chains are gradually deciding which books will make it into print. This trend toward consolidation and vertical integration severely threatens the selection of books that may be available in the future. The appealing bookstores and reasonable prices are hardly an adequate price to pay for the potential decline of independent bookstores or unattached publishers. Naturally, publishers always will consider a book's marketability, but the alleged discounts gradually empower the large chains to make the publishers' decisions for them.

In addition to the potential decline in selection, these discounts do not guarantee low prices in the future. Eliminating the smaller stores, as well as dictating publishing decisions, will turn the large bookstore chains into an oligopoly. With tacit agreements between themselves, they will have the power to raise prices and restrict availability as they please - a likely result of the current trend.

Finally, independent bookstores serve the consumer somewhat differently than Borders or Barnes & Noble. Independents can shelf risky titles that the chains might reject due to public protest. Although lower prices are not their primary goal, independent bookstores offer customer more options. The courts must take the unique nature of the book-retailing industry into account when considering this suit.

03-24-98