04 February 2016

German Government proposes fixed book prices for e-books

On 3 February 2016, the German Government submitted draft legislation to the German Parliament concerning the application of the law on the fixing of book prices to e-books.

The German fixed book price law requires publishers to impose resale price maintenance (RPM) on their retailers when distributing books. Although RPM is generally prohibited under German and EU competition rules, there are a few national exceptions to this rule provided in the German Act against Restraints of Competition. One of them is the German fixed book price law which obliges retailers to sell books to the public at the prices which have been set by publishers.

The underlying reason for the imposition of resale prices on booksellers is to promote the sale of less known, difficult or culturally interesting books instead of only promoting best-selling books. Booksellers that provide the corresponding presale services for this type of book are able to recoup their higher costs with a guaranteed margin on blockbusters.

Currently, the German fixed book price law does not include any specific details as to whether or not it applies to electronic books or only to printed books. The existing law has generally been interpreted as extending to e-books while a degree of legal uncertainty prevailed.

According to the German Government’s proposed legislation, the German fixed book price law shall now explicitly include e-books. In this way, the German Government takes into account the changing consumer landscape of increasingly demanding electronic versus printed literature and the growing popularity of e-books.

Whether the new law will extend to foreign language books is an important question for publishers of e-books. According to the present rules, the scope of application extends to foreign language books only if they are primarily intended for sale in Germany. There is no indication that this will change under the new law.

The legislative changes shall come into effect on 1 September 2016 and will not only be applicable to sales within Germany but also to trans-border sales of e-books, if the customer is located in Germany. For the proposed law to come into effect, the German Parliament as well as the German Federal Council would have to approve it.

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