25 October 07 | Chad W. Post

This was mentioned in a few places yesterday, but in case you missed it, German price fixing is at risk.

When I went to Germany on an editors trip organized by the German Book Office, I was pleasantly surprised to find out that it’s illegal to discount books in Germany. No matter where you buy a book it’s always the same exact price. Like stamps.

Thanks to the chain stores and Amazon, discounts have become a way of life in America (and the UK), and it was refreshing to encounter a culture that valued smaller, independent booksellers by keeping the playing field a bit level.

(Someone out there may be able to answer this, but one potential wrench in the fixed price system is the discounts publishers give to booksellers. I remember an owner of an indie store in Munich telling us that she didn’t receive the same discount as a the chains, thus severely impacting her profit margin . . . But, this was years ago, and my memory may be as shoddy as her English was . . . )

Anyway, thanks to the Swiss, this system is in jeopardy. The Swiss government recently decided to allow the discounting of some German books, touching off an “Everybody Panic!” response among German publishers. And for good reason—although from an economics perspective, any hindrance to a free market is “bad,” this system really seemed to help smaller bookstores and publishers and make more books available to German readers, allowing community bookstores to be unique and stock books they’re interested in, rather than placing so much power in the hands of a few buyers at a couple chains.

Even the Swiss seem to agree that eliminating fixed prices could be detrimental to book culture:

I called Rafael Corazza, director of the Competition Commission, to ask what he was thinking. “It’s not normal for one market to have special regulations,” he explained. “It was a cartel. The German and Swiss booksellers said it was for a good purpose—they made a cultural argument, but we are an economic commission. They said the system fosters a broader, deeper market for books, that discounting will hurt the small booksellers who support the small publishers, and then you will have fewer books and more focus on best sellers.”

Are they right? I asked.

“I’m not quite sure they’re completely wrong,” he said.

That’s totally not reassuring . . . Every time I leave the States I realize how second-rate we are as a nation, and I’ll be personally disappointed if Germany isn’t able to preserve this part of their culture.

Coincidentally, PW ran an article yesterday illustrating the fucked up side of our discount-crazy book culture:

Amazon sold 2.5 million copies of Harry Potter and the Deathly Hallows worldwide, making it the largest new product release in Amazon history. Because of the deep discounts on the title, however, Amazon did not quite breakeven on sales of Deathly.

That’s absolutely ridiculous, and no independent store can compete with a company willing to lose money on every copy of Harry Potter that it sold. My economics professor would hang me, but I wish we had price fixing here .. .


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