HarperCollins was the only one of four major Canadian trade publishers to sit out the negotiated settlement with the Canadian Competition Bureau in January. This week it announced that it would continue to fight against the proposed settlement.
HarperCollins is asking the Competition Tribunal to dismiss an application filed by the Competition Bureau alleging the book publisher is engaged in anti-competitive behavior.
The Competition Bureau filed the motion in late January after HarperCollins did not sign an agreement with the bureau that would permit retailers to sell the ebooks they publish at a discount, while three other major publishers did.
The bureau alleges an agreement between HarperCollins and ebook retailers is anti-competitive and continues to lead to higher prices for Canadians.
HarperCollins says no such agreement exists, but even if it did, the tribunal would not have the jurisdiction to prohibit it.
O O O
It’s worth noting that:
- Unlike the related case in the US, the Canadian Competition Bureau is not alleging any conspiracy to raise and fix ebook prices, merely that the four publishers set policies that limited competition in the Canadian ebook market by enforcing price controls (aka agency pricing) where the publishers set the retail price of an ebook.
- The settlement agreement is laughably weak; it only requires the publishers to give up price control for three calendar quarters and give up the MFN clause for around three years. (One would also think if price competition were important, the publishers would be required to give it up permanently, but no.)
- When this case first came up way back in 2014, HarperCollins agreed to the negotiated settlement.
Since we’re not talking right and wrong here, it all comes down to market economics, and that HarperCollins is saying that their ebook pricing policy is not limiting competition in the ebook market in Canada.
Yeah, I don’t see how they are going to win that one.
The only real question here is whether the tribunal will decide to hit HarperCollins with a more severe penalty when it rules against them. HC might be forced to give up control of ebook prices in Canada for years, and possibly forever.
That is not a good gamble – not when the settlement would cost HC so little.
image by abdallahh