Explosive report slams Germany's fixed book prices

Fixed book prices are the “sacred cow” of the German book industry. Anything threatening the law that secures retail price maintenance (r.p.m.) for books, both printed and (since 2016) e-books, has booksellers and publishers up in arms. Therefore it comes as no surprise that a critical report published by the Monopolies Commission (Monopolkommission) and demanding the abolishing of the r.p.m. is creating a stir.

The Monopolies Commission is an advisory council that assists the German government and parliament in any matters concerning competition policy and is known for its strong dislike of any market regulations. But while it has a long history of speaking out against fixed prices for books – in 2000 it called them a “first- class regulatory nuisance” - it still couldn’t prevent them from becoming law two years later.

In the 93-page report the commission does not mince words. “Fixed book prices strengthen competition for ancillary services, slow down structural change in the brick-and-mortar book trade and decelerate the emergence of booksellers with buyer power.” At the same time, it says, “they hinder the development of efficient trading structures and the attraction of new customer groups. They prevent cost advantages from being passed on to customers and impose a barrier to market entry.”

Remarkable about the report is the fact that it was not commissioned by any government source but was put together by the commission at its own discretion. And it seems unlikely that the ruling parties in Berlin will pick up the baton any time soon. Monika Grütters, Germany’s culture minister, has said in a statement that she was “stunned” by the document. That doesn’t make the content any less explosive, but takes some heat out of the debate, at least for now.

What has many in the industry worried is the timing. The commission has made it abundantly clear that to publish the damning report now was anything but incidental. According to the commission, the report was prompted by a judgment from 2016 in which the European Union’s Court of Justice ruled that fixed prices for medicinal products in Germany were incompatible with the free movement of goods within the EU. The question is when – and if – Brussels’ anti-regulatory forces will move from pills to books. To counteract any such move early on, the Börsenverein has therefore commissioned its own report to argue why r.p.m. is vital for the German book industry.