By Porter Anderson, Editor-in-Chief | @Porter_Anderson
‘Close This Loophole as Soon as Possible’In Germany, the Higher Regional Court in Frankfurt has dismissed the lawsuit brought by the Börsenverein des Deutschen Buchhandels, Germany’s publishers and booksellers association, against Ebay for violating fixed book prices.
As Publishing Perspectives readers know, Germany since 2002 has been one of many world book publishing markets with legally fixed prices for books. Updates since the original legislation have seen to it that digital formats are included under the legal framework, which also has been seen as protective of the nation’s market by making its laws apply to “cross-border” book sales by international retailers.
In December 2019, the online platform Ebay, based in San Jose, California, advertised a “10-percent Advent discount” for one day and included price-controlled books in that discount program.
Ebay had defended its approach, the Börsenverein points out, with the argument, among other things, that it compensated the sellers for the discounted 10 percent of the purchase price. And this week—upholding a lower-court ruling in Wiesbaden—the higher regional court has now decided that the discount campaign does not violate the German Book Price Fixing Act.
Those familiar with Ebay—a third-party vendor site—will find the court’s position interesting and perhaps foreseeable: The judges in the new decision said that Ebay is not subject to the book price-fixing act because it doesn’t deal in books itself.
In addition, the sellers received the full fixed sales price in the end.
‘The Cat Bites Its Own Tail’
The court this week, the Börsenverein reports, has recognized the fact that the presence of the discount creates price competition because of how a consumer may react to it–opting for its lure of a lower price—and that this runs counter to the meaning of the price fixing act. “The legislature is aware of the problem of third-party financed purchase contracts from other cases,” the publishers’ association says, “and sees no need for action. Thus, there is no so-called ‘regulatory gap contrary to plan’ and no violation of the law.”
To the contrary, the Börsenverein and its legal representative—the price-maintenance specialist Christian Russ—such third-party-financed price reductions establish a form of price competition that is prohibited by law and thereby circumvent fixed book prices.
In a comment on the court’s position this week, Christian Sprang, a legal advisor to the Börsenverein, is quoted, saying, “Today’s verdict is bitter and clearly shows how urgent the need for action is at the legal level.
“For years, we’ve advocated clear regulations for triangular constellations such as voucher, affiliate, or discount models. If the higher regional court assumes that the legislature knows about these models and does nothing about it, then the cat bites its own tail.
“We appeal to the federal government to close this loophole as soon as possible. The book price fixing act protects our uniquely dense book trade network in Germany.
“Discount campaigns such as those on Ebay create price competition that small and independent bookstores in particular cannot compete with.”
The higher regional court did not allow for an appeal.
The Börsenverein, however, indicates in its media messaging that it will file what’s called a “non-admission appeal” to the German Federal Court of Justice.