The Federal Trade Commission has charged six of the nation's largest book publishers with illegally discriminating against independent bookstores by selling books at lower prices to major bookstore chains.
The commission issued complaints against Harper and Row Publishers Inc., the Hearst Corp. and William Morrow and Co. Inc., Macmillan Inc., the Putnam Berkley Group Inc., Random House Inc., and Simon and Schuster.Combined book sales of the six companies in 1986 totalled over $1.1 billion, an FTC official said.
The FTC said the publishers were violating the 1936 Robinson-Patman Act against illegal price discrimination and artificially high consumer prices. This is currently the only federal investigation being conducted under the act.
FTC alleged that the publishers are selling books at cheaper prices to the three largest U.S. bookstore chains, Waldenbooks Inc., B. Dalton Bookseller and Crown Books Corp.
Book sales by the large chains have surged in recent years and last year accounted for about 45 percent of the nation's $4.3 billion retail book sales, up from only 11 percent of the retail book market in the early 1970s.
The complaint alleged that through discriminatory pricing practices, the publishers sell or distribute books at lower prices to "favored purchasers" - the bookstore chains - than to "disfavored purchasers" - the independent bookstores.
According to the complaints, the publishers use pricing schedules under which the price for certain books is determined by the number of books in individual orders. Those buying large quantities pay less per book.
The publishers were alleged to treat orders placed by bookstore chains as a single order, even if the books are separately packed and shipped to individual chain outlets. The chain outlets allegedly pay lower prices than independent bookstores that receive shipments as large or larger.
According to the complaints, the higher prices have made it harder for the independent book stores to competitively price their books and to locate in lucrative retail outlets.
If the charges are upheld, the FTC could halt price discrimination and order that all allowances, services and facilities be made available on proportionally equal terms.