The retailer already owns Waterstone's, and authors and publishers say the merged super-group would ensnare half of high-street book sales in some towns, offering readers less choice.
They are worried Waterstone's would strengthen its grip on publishers, enabling it to wring further discounts and cut authors' royalties. Buying Ottakar's would also give Waterstone's another anvil against which to hammer small bookshops into extinction.
The Office of Fair Trading turned up at the altar last December to prevent the £96.4m marriage going ahead, referring the deal for a full competition inquiry. But the Competition Commission said yesterday it was rejecting appeals from the Society of Authors and the Publishers Association that the book industry and consumers would suffer provisionally giving the go-ahead to the union.
The commission dismissed the argument that books are a special cultural case, saying Waterstone's and Ottakar's would have "every incentive" to offer a full range of titles to gain an edge over rivals who include online retailers such as Amazon and supermarkets. Such threatening competition, already causing sharp declines in high street sales (supermarkets were selling the sixth Harry Potter book for as little as £4.99 last year), would ensure that book prices stayed low, it said.
The Society of Authors disagreed. The takeover would "be a bad development for authors, publishers and the public", it said. "The range available... will decline, with Waterstone's exercising more control over what is sold and to some extent what is published. Life for mid-list authors will get tougher." HMV says the takeover is vital to ensure it can do more than tread water in a shark-infested market.
What the literary world thinks of HMV taking over Ottakar's
Nick Hornby AUTHOR
"We have no independent bookshop culture and that's something I miss. But one smaller chain being bought by a slightly bigger one isn't killing us, it's rents. You'd be mad trying to open a bookshop in an inner city. Waterstone's has not been a great force for good; the choice is becoming smaller. All these three-for-two book deals - I don't think it's a great place to go if you're seriously interested in books."
Bill Samuel DEPUTY CHAIRMAN OF FOYLES
"It would be a great pity if the very distinctive Ottakar's brand were lost. Their children's sections are particularly attractive, encouraging the bookbuyers of the future. Their range is good and their windows, compared to Waterstone's, suggest they understand better how to sell a book on value, rather than price."
Tracy Chevalier AUTHOR
"The inquiry made people think about how books are sold in this country. In terms of the [potential takeover], what goes around comes around. Waterstone's could be taken over by someone else, but there's always room for someone else to turn up. Waterstone's was owned by WH Smith. It's always a different permutation, and so I don't feel so bad about it."
Neill Denny EDITOR OF 'THE BOOKSELLER'
"A lot of authors will think 'Wottaker's' is a bad thing, but I don't think the book market is as simplistic as that. HMV's argument is that we need a stronger high street bookshop because the internet is so strong. Two weak competitors becoming a stronger single competitor is more likely to survive. Waterstone's new managing director has also devolved more power to local store management."
Mark Le Fanu GENERAL SECRETARY OF THE SOCIETY OF AUTHORS
"It's depressing because to a large extent what is published is determined by the major booksellers and two of the largest are these two. If they merged the decision-maker's power would be colossal. At the moment if Waterstone's aren't enthusiastic, authors have a chance with Ottaker's. Authors rely a great deal on high street bookselling."
Helen Dunmore AUTHOR
"We're disappointed. We will be looking to Waterstone's so they do all the things they said they would, so readers don't lose out. We are extremely enthusiastic about competition - apparently more so than the Competition Commission - and we have no axe to grind with any bookseller. We want them all to be competing, and we would like several strong players on the high street. It's good for the industry."
D J Taylor AUTHOR AND JOURNALIST
"I was quite depressed by the news. I'm director of an organisation called 'Inpress' for 30 small publishers. The problem with Waterstone's is they're not interested in the kinds of books these people deal in.
I know publishers who have had to bribe Waterstone's to display their books at a discount. As far as publishers are concerned it's just more of the same. It's very gloomy for people trying to promote variety in publishing."
Terence Blacker AUTHOR AND JOURNALIST
"It has serious implications for books available in the short term, but also what will get published long term. We're putting a lot of power in a large organisation that is just looking at the bottom line. The balance of power has swung away from publishers towards booksellers. Decisions are made by the guy in the central office and they are just looking at the bottom line. It will make the market a cruder place."
Ed Victor LITERARY AGENT
"I don't think it's a good thing at all. I've been in this business for a long time, and the biggest change has been power shifting towards the bookseller. As the discounts get higher, the authors' royalties get lower. A lot of the publishers I've spoken to are upset about it. Having anything have too much of a market share is not a good thing. It's going to be a big chunk of our business.But it's not the end of the world for us, it's not a tragedy."
Nick Goulding CHIEF EXECUTIVE OF THE FORUM OF PRIVATE BUSINESS
"The Competition Commission is reluctant to consider the impact of a merger on independent booksellers, and the long-term effect on competition and innovation if many were forced to cease trading. It has also ignored the fact that big chains suck money out of local communities, while small shops recycle it. Big retailers get bigger and UK suppliers and small shops are squeezed."
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