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Publishers fail to delay court referral of book price fixing

Ian Mackinnon
Wednesday 09 August 1995 23:02 BST
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IAN MacKINNON

The prospect of discounted books moved a step nearer yesterday when publishers failed to prevent the referral to the Restrictive Practices Court of an agreement under which prices are fixed.

A High Court judge rejected the argument that a decision by the court on the Net Book Agreement (NBA) must wait until after a European Commission ruling on whether it should be exempt from European Union trade laws banning anti-competitive price fixing.

Mr Justice Ferris said he thought the English court "should be prepared to make up its own mind" on the legality of the agreement under domestic law and dismissed the Publishers Association's application for a delay. He said the EC would have to take the views of the English court into consideration when making its own decision.

Had the association been successful yesterday it could have stalled the process for several years. But the decision clears the way for the Office of Fair Trading to seek a full hearing on the agreement before the Restrictive Practices Court.

The NBA, a price-fixing deal between publishers and booksellers to protect the wide range published and stocked, dates back to 1957, but the last time it was examined fully was in 1962. It was briefly examined again in 1964, when the court decided it was not against the public interest. As a result, in 1968 books were exempted from legislation which prevented resale price maintenance.

Yesterday's successful move by the OFT is the latest twist in a saga that has seen growing opposition to the agreement both inside and outside the industry.

The controversial withdrawal from the NBA of some major publishers, such as Reed Books and Hodder Headline, had been heralded by industry insiders as the final nails in its coffin. But even the support of book shops such as Dillons, which offered discounts of 20 per cent to 50 per cent on leading authors including John le Carre, did not spell the end. Nor was the might of the supermarket chain Asda, which flouted the agreement by discounting 10 best-sellers for pounds 1, enough.

However, under increasing political pressure the OFT's director general, Jeffrey Preston, wants the Restrictive Practices Court to rule on whether or not the market has changed so much in the past 33 years that book price fixing should now be banned, or the agreement otherwise varied. It is expected to make its application in December and if successful, the full hearing could take place as early as next summer.

After yesterday's hearing Mr Preston said: "This ruling clears the way for the court to hear the OFT's application for leave to ask it formally to review the NBA. This agreement effectively prevents price competition in a large part of the book trade and, for this reason, I would like to see it reviewed by the court as soon as possible."

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