Competition on price, and larger selection could fuel growth of e-book market
The Netherlands Competition Authority (NMa) is pleased with Dutch State Secretary of Culture Halbe Zijlstra’s pledge not to introduce fixed book prices for electronic books (so-called e-books). This means that publishers are not allowed to set retail prices. Booksellers are thus able to compete on price in the case of e-books. Chris Fonteijn, chairman of the Board of the NMa, reacts: ‘We hope that Mr. Zijlstra’s promise will give a major boost to competition in the e-book market.’
Over the past 12 months, the NMa has identified and examined the trends in the Dutch e-book market. It appears that competition in the market has trouble taking off. One of the reasons is that booksellers often follow the publishers’ recommended retail price, as a result of which competition on price is virtually absent. Another reason is that the selection of Dutch e-books titles is limited.
At the same time, the NMa sees certain developments that make the e-book market increasingly attractive to publishers, booksellers, and consumers alike. More and more individuals own an e-reader, a tablet computer, or both, thereby increasing the number of potential e-book readers. In addition, booksellers increasingly offer discounts on e-books. Furthermore, e-books are a perfect opportunity for introducing new business models, for example, offering e-books through subscriptions, where readers have unlimited access to e-books for the duration of the subscription.
The creation of the new ‘Digital Platform’ for storage and distribution of e-books may lead to a larger selection of e-books in Dutch. This Digital Platform is an initiative by the Royal Dutch Booksellers Association (KBb), and the General Publishing Group (GAU), part of the Dutch Publishers Association (NUV).
GAU and KBb have made commitments to the NMa that cooperation between publishers and booksellers through the Digital Platform will not impede competition. That way, both existing and new market participants will gain access to the Platform. Access requirements are objective, transparent, and non-discriminatory. The Platform does not have any exclusivity conditions. Agreements between publishers and booksellers on prices and supply conditions are made outside of the platform. Finally, users are allowed to use information (modified and unmodified), from the Digital Platform for their own websites, enabling them to differentiate themselves from others. Considering these commitments, the Digital Platform can improve competition. The NMa will see to it that these commitments are observed.