October 23, 2009 / 2:35 AM / 10 years ago

Booksellers ask Justice Dept to probe price wars

SAN FRANCISCO (Reuters) - The American Booksellers Association has asked the U.S. Department of Justice to investigate a recent price war on books sold online between such retail giants as Wal-Mart Stores Inc, Amazon.com Inc and Target Corp ahead of the holidays.

Workers scan goods at the Amazon warehouse in Leipzig, December 3, 2008. REUTERS/Fabrizio Bensch

Recent price cuts “constitute illegal predatory pricing that is damaging to the book industry and harmful to consumers,” the trade organization’s board of directors wrote in letter sent to the department on Thursday.

Last week, Walmart.com ignited a book price war when it said it would sell the top 10 pre-ordered books, including Sarah Palin’s new book, on its website for $10 each.

Amazon followed the move and then responded once again after Walmart.com then cut its price to $9.

After Walmart.com lowered prices yet again by a penny, those prices were seen at Amazon and Target.com.

On Thursday, an advertisement for the books in question had been taken off Walmart.com’s home page, but the retailer was advertising the titles at $8.98 in its books section, making good on its vow to be the price leader.

“We have learned of the letter, and we are reviewing it. We’re focused on our commitment to providing our customers low prices and our online book announcement demonstrates that commitment,” said a Wal-Mart spokeswoman reached by phone.

Amazon could not immediately be reached for comment. Target said it had no immediate comment.

The books in question include new titles from top-selling authors like John Grisham and Stephen King that typically retail for $25 to $35, according to the association.

The group said it believed that the big-box retailers were selling the books at below cost “to attempt to win control of the market for hardcover bestsellers.”

Moreover, the retailers “are devaluing the very concept of the book,” the association said in a letter sent to the Justice Department.

“They’re using our most important products ... as a loss leader to attract customers to buy other, more profitable merchandise. The entire book industry is in danger of becoming collateral damage in this war,” it said.

The association added that prices on digital books — popularized by Amazon’s Kindle device and the recent launch of Barnes & Noble Inc’s Nook — also bears scrutiny.

Also on Thursday, Amazon posted strong quarterly earnings and a bullish outlook for the holiday season, saying that consumers were gravitating to its site for its selection and prices.

Reporting by Alexandria Sage; Additional reporting by Nicole Maestri; Editing by Richard Chang

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