The American Booksellers Association, the trade organization of independent booksellers, has asked the department of justice to investigate Amazon, Walmart, and Target, charging that the three companies are engaging in “illegal predatory pricing” of books, which it says is “damaging to the book industry and harmful to consumers.”
The booksellers’ organization is reacting to the online book price war between the three companies, in which all three companies are selling advance order hardcovers with $25 to $35 MSRPs at $8.98 to $9.00 (see “Target Joins Online Book Price War”). Since publishers have confirmed that they are not selling to these retailers at special prices, the companies are losing money on every sale, as much as $7.50 per sale on a $35 book.
“By selling each of these titles below the cost these retailers pay to the publishers, and at the same price as each other,… Amazon.com, Warlmart, and Target are devaluaing the very concept of the book,” the association argues. “Authors and publishers, and ultimately consumers, stand to lose a great deal if this practice continues and/or grows.”
The association notes that the pricing of digital editions at $9.99 by Amazon, also below the companies cost, precipitated the price war.
It also argues that for the retailers involved in the price war, books are being used as loss leaders for other merchandise, but that “the entire book industry is in danger of becoming collateral damage in this war.” The ultimate result would be the concentration of purchasing power in a handful of trade buyers, along with the ability to raise prices unchecked by competition.