Net Book Agreement
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The Net Book Agreement (NBA) was a
fixed book price agreement Fixed book price (FBP) is a form of resale price maintenance applied to books. It allows publishers to determine the price of a book at which it is to be sold to the public. FBP can take the form of a law, mandatory to oblige by all retailers, or a ...
in the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
and
Ireland Ireland ( ; ga, Éire ; Ulster Scots dialect, Ulster-Scots: ) is an island in the Atlantic Ocean, North Atlantic Ocean, in Northwestern Europe, north-western Europe. It is separated from Great Britain to its east by the North Channel (Grea ...
between
The Publishers Association The Publishers Association (PA) is the trade organisation serving book, journal and electronic publishers in the United Kingdom, established in 1896. Its mission is to strengthen the trading environment for UK publishers by providing a strong voic ...
and
bookseller Bookselling is the commercial trading of books which is the retail and distribution end of the publishing process. People who engage in bookselling are called booksellers, bookdealers, bookpeople, bookmen, or bookwomen. The founding of librari ...
s which set the prices at which
book A book is a medium for recording information in the form of writing or images, typically composed of many pages (made of papyrus, parchment, vellum, or paper) bound together and protected by a cover. The technical term for this physical arr ...
s were to be sold to the public. The agreement was concerned solely with price maintenance. It operated in the UK from 1900 until the 1990s when it was abandoned by some large bookshop chains and was then ruled illegal. It also operated in Ireland until shortly before its final demise.


History

It came into effect on 1 January 1900 and involved retailers selling books at agreed prices. Any bookseller who sold a book at less than the agreed price would no longer be supplied by the publisher in question. In 1905, ''
The Times ''The Times'' is a British daily national newspaper based in London. It began in 1785 under the title ''The Daily Universal Register'', adopting its current name on 1 January 1788. ''The Times'' and its sister paper ''The Sunday Times'' (fou ...
'' tried but failed to challenge the agreement by setting up a low-cost book borrowing club. In 1905, following The Education Act, The Publishers Association introduced the practice of deeming school books 'non-net' allowing schools discounts that were not available on other books. There were also agreements in place to allow public libraries to receive discounts of up to 5% on the net books they purchased. In 1962 the Net Book Agreement was examined by the
Restrictive Practices Court The Restrictive Trade Practices Act 1956 was an act of the Parliament of the United Kingdom intended to enforce competition, and provide an appropriate check on restrictive combines and practices. It required that any agreement between companies ...
, which decided that the NBA was of benefit to the industry, since it enabled publishers to subsidise the printing of the works of important but less widely read authors using money from bestsellers. In 1991 the large bookshop chain
Dillons Dillons is a grocery supermarket chain based in Hutchinson, Kansas, and is a division of Kroger. Other banners under Dillon Stores Division include Gerbes in Missouri and Baker's in Omaha, Nebraska. Dillons operates grocery stores throughout K ...
, followed by
Waterstones Waterstones, formerly Waterstone's, is a British book retailer that operates 311 shops, mainly in the United Kingdom and also other nearby countries. As of February 2014, it employs around 3,500 staff in the UK and Europe. An average-sized Wa ...
, began to offer some books at a discount. As the agreement did not cover books that were damaged (or second hand), shops that wished to sell "new" books below cover price for any reason (for example to get rid of obsolete stock or titles that were not otherwise selling) adopted a simple strategy which meant that they were still sticking to the terms of the agreement: they deliberately defaced or damaged the book(s). The two methods most commonly used were to either use a
hole punch A hole punch, also known as hole puncher, or paper puncher, is an office tool that is used to create holes in sheets of paper, often for the purpose of collecting the sheets in a binder or folder. A ''hole punch'' can also refer to similar t ...
to punch a hole in the cover of the book or to use a
marker pen A marker pen, fine liner, marking pen, felt-tip pen, felt pen, flow marker, sign pen (in South Korea), vivid (in New Zealand), texta (in Australia), sketch pen (in South Asia) or koki (in South Africa), is a pen which has its own ink source a ...
to mark the edge of the pages. The marker pen method was the most common as it took the least effort.


Dissolution of the NBA

The Publishers Association The Publishers Association (PA) is the trade organisation serving book, journal and electronic publishers in the United Kingdom, established in 1896. Its mission is to strengthen the trading environment for UK publishers by providing a strong voic ...
applied the NBA in the Republic of Ireland until 1992, after the Competition Act 1991 came into force. In June 1994 Ireland's Competition Authority refused to license the NBA, on the grounds that UK publishers' market share was high enough for the NPA to distort competition in Ireland. In the UK in August 1994 the Director General of the
Office of Fair Trading The Office of Fair Trading (OFT) was a non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforced both consumer protection and competition law, acting as the United Kingdom's economic ...
decided that the Restrictive Practices Court should review the agreement. In September 1995 several major publishers (including
HarperCollins HarperCollins Publishers LLC is one of the Big Five English-language publishing companies, alongside Penguin Random House, Simon & Schuster, Hachette, and Macmillan. The company is headquartered in New York City and is a subsidiary of News Cor ...
and
Random House Random House is an American book publisher and the largest general-interest paperback publisher in the world. The company has several independently managed subsidiaries around the world. It is part of Penguin Random House, which is owned by Germ ...
) withdrew, and in September 1996 the Booksellers Association decided to take no part in the case. In March 1997 the Restrictive Practices Court ruled that the Net Book Agreement was against the public interest and therefore illegal. The adoption of this new procurement discipline by academic libraries since the demise of the NBA is the focus of "Managing suppliers for collection development: the UK higher education perspective." The collapse of the Agreement strengthened large bookstore chains and reduced book prices. It also paved the way for the large
supermarket A supermarket is a self-service Retail#Types of outlets, shop offering a wide variety of food, Drink, beverages and Household goods, household products, organized into sections. This kind of store is larger and has a wider selection than earli ...
chains to take a chunk of the book business, typically offering a small number of best-selling titles at deeply discounted prices. As of 2009, 500 independent bookshops had closed since the demise of the agreement. An early example of the changes in the book publishing markets following the termination of the agreement was the entry of the US-owned booksellers
Borders A border is a geographical boundary. Border, borders, The Border or The Borders may also refer to: Arts, entertainment and media Film and television * ''Border'' (1997 film), an Indian Hindi-language war film * ''Border'' (2018 Swedish film), ...
into the British high street, following their purchase of Books Etc, but the failure of the changes was demonstrated by the rapid bankruptcy of Borders, as the supermarkets rapidly dominated the market with loss-leading price discounting, wiping out the competition. However, market concentration and a demise of independent bookshops also took place in economies such as Germany and France where a fixed book price agreement is still in place. The loss in business was smaller than predicted by many commentators. The number of titles published in the UK briefly increased when the NBA was dissolved in 1997; the volume of books sold in the UK increased temporarily by about 30% compared to 1995, but the retail prices collapsed.
Office of Fair Trading The Office of Fair Trading (OFT) was a non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforced both consumer protection and competition law, acting as the United Kingdom's economic ...

An evaluation of the impact upon productivity of ending resale price maintenance on books
, 42.


See also

* ''
United States v. Apple Inc. ''United States v. Apple Inc.'', 952 F. Supp. 2d 638 (S.D.N.Y. 2013), was a US antitrust case in which the Court held that Apple Inc. conspired to raise the price of e-books in violation of the Sherman Act. The suit, filed in April 2012, alleg ...
'', a book price-fixing conspiracy, which also involved collusion between publishers and was also ruled illegal


References


External links


Politics and the NBA
* ttp://www.encyclopedia.com/doc/1G1-11333194.html The Economist: Blood on the Bookshelves{cbignore, bot=medic Anti-competitive practices Publishing in the United Kingdom United Kingdom competition law 1900 establishments in the United Kingdom 1997 disestablishments in the United Kingdom Price controls Regulation in the United Kingdom de:Buchpreisbindung fr:Prix unique du livre