The Competition Authority has today published Decision no. 47/2017 where a comprehensive review of the book publishing market in Iceland has been completed. The occasion is a request from Forlagið ehf., the country's largest book publisher, for a review of the conditions imposed in the Competition Authority's decision no. 8/2008 concerning the merger of JPV útgáfu ehf. and Vegamóta ehf. That merger resulted in Forlagið taking its current form as the country's most powerful book publisher, and the conditions were imposed to eliminate the merger's harmful effects on competition.
The Publisher has requested that the conditions be annulled or relaxed. The Publisher has objected to the definition of the market in the case and the assessment of the company's market share. Furthermore, the Publisher believes that Decision no. 8/2008 have been based on incorrect assumptions, that circumstances have changed and also that the conditions place a burden on the company's operations.
The Competition Authority's current review of the book market shows that Forlagið's position has not fundamentally changed in recent years. Forlagið is still the largest book publisher in Iceland with a 45-50% share of the general book publishing market, and has approximately four times the share of the next largest publisher, Bjartur-Veröld. Furthermore, Forlagið has a wide range of publications compared to most other book publishers. It is therefore the conclusion of the authority's assessment that Forlagið still holds a dominant position in the book market.
The Competition Authority therefore considers it important that the conditions, which the Publisher is now requesting be lifted, and which mainly concern the Publisher not abusing its strength vis-à-vis competitors and thereby harming competition, should remain in force. It is also significant that the majority of competitors who participated in the competition authority's survey believe that the conditions have contributed to increased competition and that there are no grounds for partially or fully annulling them. Furthermore, the regulator considers that the Publisher has not justified how the conditions actually constrain the company, or what the impact would be for it and others if they were to be lifted.
On 5 February 2008, the Competition Authority Decision no. 8/2008 regarding the merger of JPV útgáfa ehf. and Vegamóta ehf. (an imprint then owned by Mál og menning). 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. An agreement was reached on the conditions, which were subsequently imposed by the decision.
The conditions that are still in effect include, among other things, that:
The publisher may only negotiate publication rights for one book title at a time with any given author.
The Publisher is not permitted to grant book resellers a discount from its wholesale price unless the Publisher can demonstrate beyond doubt a cost saving from its dealings with the relevant reseller that is consistent with the discount.
The publisher is prohibited from discriminating against booksellers in any promotional or advertising activities, or with materials relating to the display and promotion of books in booksellers' shops, unless such discrimination is based on general commercial considerations.
The publisher is prohibited from entering into any exclusive purchasing agreements with booksellers.
The publisher is not permitted to have any involvement in the resale price of the books it publishes, nor to publish the resale price in any way.
Decision of the Competition Authority No. 47/2017 (70 pages)
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