06 December 2005

A Lack of Trust

at [UTC–8]
Or, as the case may be, antitrust.

Here in the US, we have a tendency to ignore what is going on in Europe that does not involve either elected officials or sport. For whatever reason, "business" in Europe just doesn't seem to hold the attention of America—not even cognate businesses to one's own. Americans' ignorance of European publishing practices and trends certainly does American authors no good. Similarly, Americans' ignorance of European book-store practices and trends certainly does American readers no good.

All of which leads us to the proposed merger between HMV, the parent of England's largest independent bookstore chain, and Ottakar's, the parent of England's second-largest independent bookstore chain.1 This would not be a good thing; as one article notes,

[Office of Fair Trade] chief executive John Fingleton said the two book retailers competed closely on a number of non-price factors such as range and variety of books. "In particular, our economic analysis shows that Ottakar's competes harder on non-price factors when a Waterstone's is nearby," he said. "The unusually high level of consumer complaints to the OFT shows that UK book-buyers value the fruits of this competition, which the merger would eliminate."

"Waterstones-Ottakars Referred to Competition Commission," The Lawyer (06 Dec 2005) (fake paragraphing removed for clarity).

In short, a 55% combined market share of what the consumers perceive as the market was sufficient to get serious antitrust scrutiny. Now, if our FTC and DoJ would just follow the same logic…

  1. And where, pray tell, does WH Smith fit into this? WH Smith is only incidentally a bookstore; less than a third of the floor space in a typical WH Smith that is not in an airport or train station is devoted to books. Further, WH Smith store sizes seldom exceed those of the local hole-in-the-wall used bookstore, whereas Waterstone's and Ottakar's tend to be the size of smaller Barnes and Noble non-mall outlets and up. In short, WH Smith just isn't the same market; if one is going to look for a book other than a recent mainstream bestseller, one does not go to WH Smith.