Booksellers Seek Probe on ‘Predatory’ Amazon.com, Target Prices
By Christopher Stern and Cotten Timberlake, Bloomberg
October 23rd, 2009
The American Booksellers Association asked the Justice Department’s antitrust division to investigate “predatory” pricing of books sold by Amazon.com Inc., Wal-Mart Stores Inc. and Target Corp.
“We ask that the Department of Justice investigate practices by Amazon.com, Walmart and Target that we believe constitute illegal predatory pricing that is damaging to the book industry and harmful to consumers,” nine ABA board members wrote in a letter addressed to Christine Varney, the assistant attorney general for the antitrust division.
The letter, dated Oct. 22, was posted on the Web site of the group, which represents independently owned U.S. bookstores.
Earlier this month, Target, Walmart, and Amazon.com all said they would sell bestsellers by John Grisham and Stephen King for about $9. These books typically retail for between $25 and $35, the association said. King’s “Under the Dome” costs a retailer at least $17.50, the group said.
Meg Smith, a spokeswoman for the American Booksellers Association, referred reporters to the letter on the Web site.
“We are committed to providing our customers with the best possible prices, and that is what we are doing here,” Daphne Davis Moore, a spokeswoman for Bentonville, Arkansas-based Walmart, said in an e-mail. “We always work to follow applicable law.”
Drew Herdener, an Amazon.com spokesman, didn’t immediately respond to a request for comment. Kelly Basgen, a spokeswoman for Minneapolis-based Target, had no immediate comment. Justice Department spokeswoman Gina Talamona declined to comment.
‘Going Rogue’
Walmart dropped 15 cents to $50.48 yesterday in New York Stock Exchange composite trading. Target advanced 59 cents to $49.49. Seattle-based Amazon.com added 3 cents to $93.45 on the Nasdaq Stock Market.
Amazon.com cut the price of top-selling books including Sarah Palin’s “Going Rogue: An American Life” to $9 on Oct. 16, matching an online price reduction by Wal-Mart the day before. Target said Oct. 19 it would make similar cuts.
Amazon.com, the world’s largest Internet retailer, and Walmart, the world’s biggest retailer, are vying for sales of hardcover books scheduled for release in November. Walmart also offered free shipping and price cuts of 50 percent or more on 200 bestsellers, including Dan Brown’s “The Lost Symbol.”