Published 23 November 2024
In a decision summarised here in French, the COMCO confirms for the first time that a foreign company, in this case the publisher Madrigall, has relative market power on the French book market vis-à-vis a Swiss retailer, Payot, and that it has abused this power.
As we explained in a previous update, the new concept of relative market power is assessed on the basis of three criteria, which were met in this case:
1. Dependence or whether the undertaking concerned has sufficient and reasonable alternatives, which is assessed by answering three questions: first, whether alternatives exist; second, what are the consequences for the dependent undertaking if it chooses to pursue such alternatives; and third, whether the consequences are reasonable. In this case, the Swiss bookseller could obtain French books published by the French company from certain wholesalers in France and Switzerland, from the grey market in France or elsewhere, or, as a third alternative, he could stop selling Madrigall books altogether. However, the negative impact of all these alternatives on the Swiss bookseller was considered to be unreasonable. The first two alternatives, i.e. wholesale supply and the grey market, would represent significant disadvantages for the Swiss retailer, as these supply channels would not be able to offer sufficient quantities of French books and, in any case, the supply conditions would be significantly worse than those obtained directly from Madrigall. The third alternative, i.e. to stop selling Madrigall books, would have resulted in a significant loss of sales, with a consequent significant impact on the Swiss retailer’s margins and profits. Comco emphasised the importance of Madrigall as one of the leading French publishers, with a large number of Nobel Prize and Prix Goncourt winners in its catalogue. The sale of books from other publishers was unlikely to compensate for the loss of such a catalogue. All in all, neither of these alternatives was considered to be reasonable and therefore acceptable within the meaning of Article 4(2bis) CartA.
2. Lack of countervailing power of the dependent undertaking or the existence of an imbalance of power between the undertakings. COMCO’s assessment revealed a clear imbalance between the disadvantages suffered by Payot, the Swiss retailer, and those suffered by the French publisher. Madrigall has many other ways of marketing its books in French-speaking Switzerland, whereas Payot can only buy Madrigall books from the Madrigall publishing house.
3. Absence of self-inflicted dependency or whether the dependency is due to the fault of the dependent undertaking. In this respect, the Swiss retailer must offer Madrigall books to his customers and the purchase of such books is in principle only possible through Madrigall’s (exclusive) distribution system, so that there can be no fault on the part of Payot.
Madrigall’s abuse consisted in offering Payot a price which was significantly higher than the price applicable to French booksellers under the French system. Confirming an abuse on the basis of the newly introduced Article 7(2)(g) of the CartA, COMCO required Madrigall to apply the same conditions to Payot in the case of direct purchases in France and accepted that Madrigall could apply a mark-up for additional costs caused by Madrigall’s marketing efforts and investments in Switzerland.
The full text of the COMCO decision has not yet been published.