University Press Accused of Price Discrimination

Harvard University Press (HUP) is one of 48 publishers under investigation for price discrimination by a group representing college book-stores across the country.

The National Association of College Stores (NACS) alleges that these publishers engage in "dual pricing," offering better discount rates for independent booksellers than for college bookstores, violating antitrust law.

Since last December, NACS's legal counsel, Arent, Fox, Kinter, Plotkin & Kahn, has collected nearly 80 complaints from more than 50 stores, which show that publishers offer a 40 percent discount rate to independent book stores and only 20 percent to college stores.

"We have considerable evidence of illegal pricing," said Margo S. Block, one of the two lawyers handling the case.

HUP officials said yesterday that no one in the office was qualified to comment, but in response to a story in The Chronicle of Higher Education, Harvard denied that it priced illegally.

Block said she has invoices which show that the same book is being sold for different prices to the same store, based on whether or not the publisher assumes the book will be used for course purposes.

Fred Woodward, director at the Kansas University Press, said that having different rates for different stores is not a violation of anti-trust law.

"No one would question [a publisher] offering y discount to a wholesaler and x discount to a retailer, because they do not compete directly, they are at different functional levels," said Woodward, who is also the former president of the Association of the American University Presses.

According to Woodward, it can be proved that college books stores and independent trade book stores are different functional levels.

"I feel fairly confident that if the case does move forward it will be dismissed," he said.

If the case is pursued, it would most likely be tried under the Robinson-Patman Act of 1936, according to Professor of Law Einer R. Elhauge, a specialist on antitrust law.

Elhauge said the courts have tended to construe the statute fairly narrowly, as one that protects competition, instead of promoting the welfare of individual stores.

"In general, most price discrimination is perfectly legal, only certain forms are banned under Robinson-Patman," Elhauge said.

"They would have to show a substantial lessening of competition in the book retail market," he added.

Elhauge said that the charge could also be defended on the grounds that the price discrimination was cost-justified or was done with the intent of meeting the demands of competition.

Woodward said college book stores often agree to higher prices in return for more lenient return policies.

The decision of whether or not to go forward with the suit will be made at the NACS annual board meeting April 9, according to NACS spokesperson Jerry Buchs.