Last autumn, the Competition Authority was notified of the merger of JPV útgáfu ehf. and Vegamóta ehf. JPV is a book publisher and Vegamót were owned by the Mál og menning literary society, a non-profit organisation that has been engaged in book publishing since 1937. In recent years, Mál og menning was a minority shareholder in Edda útgáfa.
In the run-up to the merger, Vegamót had acquired the book publishing division of Edda útgáfa. The merger therefore involved the book publishing division of Edda útgáfa being merged with JPV útgáfa. In the opinion of the Competition Authority, this constituted a merger within the meaning of competition law, and the authority considered that the merger could be detrimental to competition if no intervention were made.
To remedy the competition concerns that the Competition Authority considered the merger would entail, the merging parties submitted proposals for conditions to be imposed on it. Negotiations between the Competition Authority and the merger parties have led to the Publisher agreeing to a settlement comprising twenty-one numbered conditions. Thus, the Publisher will divest certain publishing rights, i.e. the rights to publish specific books and collections, along with the stock of these books and collections, in order to reduce the Publisher's market power vis-à-vis its competitors in book publishing.
The Publisher has also undertaken various other conditions intended to promote competition and counteract the harmful effects of the merger. Among other things, the Publisher is required to contract with authors for the publication rights of only one book title at a time. Furthermore, the Publisher is prohibited from granting book resellers a discount on the wholesale price of its books unless the Publisher can conclusively demonstrate a cost saving from its dealings with that reseller which is consistent with the discount. The Publisher is not permitted to discriminate between booksellers in any promotional or advertising activity, or with material relating to the display and promotion of books in booksellers' stores, unless such discrimination is based on general commercial considerations. Furthermore, the Publisher will henceforth only set the list price (wholesale price) for the books it publishes and sells to booksellers. The Publisher shall not interfere with the reseller's selling price or in any way publish the reseller's selling price for books published by the Publisher.
The conditions imposed on the merger are, in the opinion of the Competition Authority, sufficient to remedy the competition concerns that would otherwise have arisen from the merger.
Decision No. 8/2008.
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