The Rise and Fall of the Net Book Agreement

The Net Book Agreement was a significant event in the UK publishing industry. It was implemented in 1900.

The agreement set a minimum price for books sold by retailers. This was to ensure authors and publishers received a fair income.

The agreement was overseen by the Net Book Agreement Committee. This committee was responsible for setting the minimum prices and monitoring compliance.

The agreement was in place for over 80 years, until its eventual abolition in 1969.

The Net Book Agreement had a profound impact on the book industry, with far-reaching consequences for both booksellers and readers.

The primary aim of the NBA was to ensure a fair profit margin for all booksellers, both large and small.

Big retailers were prevented from overshadowing their rivals and dominating the market, which was a major concern for the publishers.

Any bookseller that discounted below the fixed retail price faced potential repercussions, including being cut off from supply by the publisher.

Publishers wielded significant power through the NBA, which was an industry-wide voluntary agreement rather than government legislation.

The Times initiated a discount book club in 1905, but publishers responded by ceasing supply, ultimately forcing The Times to back down and affirm the NBA's authority.

The NBA's fall led to a market where unique, quieter titles were pushed to the sidelines, making it harder for readers to discover rare gems in bookshops.

David Salariya, a recovering publisher and amateur time traveler, still mourns the loss of the Net Book Agreement, which he believes led to the commodification of books.

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The Net Book Agreement is crumbling around booksellers and publishers, according to Tim Hely Hutchinson, chief executive of Hodder Headline.

The agreement, which dates back to 1899, is a price-fixing deal between publishers and booksellers to protect the wide range of books published and stocked in shops.

Hodder Headline's withdrawal from the agreement is a significant blow, and insiders expect it to herald the end of the NBA.

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If one more major publisher withdraws, the agreement may not survive beyond the summer, with Random House and Harper-Collins wavering.

The Publishers' Association is fighting to keep the agreement, having launched an appeal to raise £1m for a legal defence.

The battle begins in earnest in the spring, when the Restrictive Practices Court will re-examine whether it is in the public interest.

The Office of Fair Trading's director general, Sir Bryan Carsberg, will have to satisfy the court that the publishing and bookselling trade has substantially changed since 1962.

The opposing camp claims that the NBA widens the range of books published, and without it, publishers would be more discriminating, offering customers cheaper books and stimulating literary interest.

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The Court Case surrounding the Net Book Agreement (NBA) was a significant development in the history of the agreement. The Authority analyzed the NBA and associated agreements under Section 4(1) and 4(2) of the Competition Act, 1991.

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The Authority found that the NBA constitutes agreements and decisions between undertakings that impose resale price maintenance (RPM), restricting competition by fixing minimum resale prices and limiting retailers' ability to compete on price. This eliminated price competition both between retailers and between publishers within the substantial market of books sold in the State.

The Authority considered economic theories on RPM, acknowledging the Chicago School's arguments about potential benefits but ultimately finding that the weight of evidence and economic analysis indicated RPM is generally harmful to competition and consumer welfare. The Authority distinguished the Irish legal context from the UK, where RPM was permitted under a public interest test.

The Authority examined the ancillary agreements, including the Book Club Regulations, Library Licence, Book Agent's Licence, Quantity Book Buying Scheme, National Book Sale, and Primary and Secondary School Licence, and concluded that these arrangements reinforce the restrictive effects of the NBA and similarly offend Section 4(1).

The Authority applied the four cumulative tests under Section 4(2) and found that the NBA and related arrangements do not contribute to improving production or economic progress, do not allow consumers a fair share of benefits, impose terms not indispensable to objectives, and afford the possibility of eliminating competition in a substantial part of the market.

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Here are the notified agreements that were refused a certificate or licence:

The Authority held that these agreements and arrangements constitute agreements between undertakings and decisions of an association of undertakings that have as their object or effect the restriction of competition in the market for books within the State.

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