Book publishing companies offer national retailers special promotions and discounts that they don’t offer to independent booksellers. How likely is it that this type of pricing arrangement is a violation of antitrust legislation?


That’s right. When the Federal Trade Commission (FTC) was investigating complaints by the American Booksellers Association and independent booksellers, they found that a number of book publishing companies had engaged in predatory pricing by offering discounts and promotions to large national book retail chains and buying clubs. Such actions are a violation of the Robinson-Patman Act. The book publishers settled the dispute and agreed to stop the pricing practices. Penguin later paid penalties when they continued the predatory pricing practices.