Norway’s competition authorities see abuse in a database used by the country’s publishers to track the market. Publishers protest they have done nothing wrong. As yet the finding are provisional, but carry hefty penalties
Alleging that Norwegian publishers used their database Bokbasen to coordinate prices, selection and timing of releases, to the detriment of consumers, the Norwegian Competition Authority has advised publishers face fines totalling NOK 502 million ($52 million).
As reported by the Norwegian trade journal Bok365 the competition authority’s concerns revolve around the Bokbasen database a group of Norwegian publishers use to track and influence the market.
The publishers have purchased the subscription Mentor Forlag from Bokbasen and have thus gained access to share information about each other’s publications via the database. The four publishers all have an ownership interest and board representation in Bokbasen. The publishers have had insight into and influence over the Book Base, the services offered and the information that could be exchanged via the database. The Norwegian Competition Authority’s preliminary assessment is that Bokbasen has facilitated the exchange of information and thus participated in the illegal cooperation.
Norwegian Competition Authority project manager Jan Petter Fedje states,
Our assessment is that the publishers have systematically entered information about their own publications in the database, and been aware that other publishers could retrieve this information. Information exchange that includes future prices is at the core of what is considered harmful to competition, and may lead to consumers having to pay higher prices.
Gjermund Nese, department director at the Norwegian Competition Authority, said:
We take this type of illegal cooperation very seriously, which the size of the notified fees emphasizes. Our preliminary assessment is that the publishers’ exchange of information is suitable for restricting competition by making it possible to coordinate book prices, the selection of books and the time of publication to the detriment of consumers, at the Norwegian Competition Authority. The Competition Authority’s assessment is that the purpose of the co-operation has been to restrict competition in violation of the prohibition against restrictive co-operation in section 10 of the Competition Act and Article 53 of the EEA Agreement.
Although the findings are preliminary and subject to revision, the expectation is that the following penalties will be imposed:
Bokbasen will be fined NOK 3.89 million; Cappelen Damm will be fined NOK 151.9 million; VB Bok / Akademika (Forlagshuset Vigmostad & Bjørke) will be fined NOK 93.4 million; Gyldendal will be fined of 202.4 million kroner; and Aschehoug is charged a fee of 50.8 million kroner. The publishers’ parent companies will be held jointly and severally liable.
Publishers have until November 24 to respond, but some have already gone public with their reactions:
Tom Harald Jenssen, CEO of Cappelen Damm, had this to say:
Bokbasen is a crucial tool for book retailers to be able to effectively pick in, order and buy from the entire range of available books from Norwegian authors and publishers. The database has not been used as claimed by the Norwegian Competition Authority, but to inform booksellers and book buyers about planned new publications and an impressive breadth of previously published books with associated necessary and updated metadata. We do not recognise ourselves at all in the Norwegian Competition Authority’s assessment.
The services offered are based on the Norwegian Book Database – the most up-to-date catalog of all book publications in Norway. The book database also creates infrastructure for new digital solutions for publishers, bookstores, libraries and schools. Metadata production related to Norwegian book publications is the core of Bokbasen’s operations and is performed by our own librarians with specialist expertise in cataloging and classification.
Both Gyldendal and Vigmostad & Bjørke have gone on record as saying they will dispute the findings, while Aschehoug CEO Mads Nygaard said,
We both disagree with and are surprised by the Authority’s preliminary hypotheses. The book database is a digital catalog of published and planned publications used by all publishers and booksellers in Norway, and includes publicly known information. The book base is important for diversity and competition in Norway because it makes 100,000 titles available for sale to Norwegian book readers. The purpose of the book database, and our participation, has never been intended to restrict competition in the market. The realities are completely turned upside down.
The news will revive memories of the ebook price-fixing saga in the United States, which resulted in several of the country’s biggest publishers, along with Apple, being convicted, but any comparisons should be held a at least until such time as these allegations by the Norwegian Competition Authority have stood the test of rebuttal.