Bundeskartellamt brings an end to minimum sales requirement in the press wholesale sector

The “alliance of publishing houses” (Verlagsallianz) consisting of seven major German publishing houses and the Association of German Book, Newspaper and Magazine Wholesalers (BPVG) have refrained from applying the minimum sales requirement in the press wholesale sector. The Bundeskartellamt had previously expressed competition law concerns as the requirements potentially discriminate against publishing houses with low-selling publications. With the current provision being abandoned, the Bundeskartellamt has discontinued the proceeding against the alliance of publishing houses and the BPVG.

The following publishing houses are members of the alliance: Axel Springer SE, Funke MEDIENGRUPPE GmbH & Co. KGaA, Gruner + Jahr GmbH, Heinrich Bauer Verlag KG, Hubert Burda Media Holding KG, Medienholding Klambt GmbH & Co. KG and SPIEGEL-Verlag Rudolf Augstein GmbH & Co. KG.

The minimum sales requirement was part of the “Industry agreement on terms and conditions for press wholesale distribution” which had been in force since March 2018. For the first time this new agreement stipulated a wholesale surcharge for publications not achieving a minimum average turnover per retailer per year (“minimum sales” surcharge). As a result, the distribution of smaller publications generating less sales became more expensive. The publishing houses represented in the German working group of small or medium-sized publishing houses (Arbeitskreis Mittelständischer Verlage e.V.) protested against this provision.

Andreas Mundt, President of the Bundeskartellamt: “Our investigations to date have shown that the new remuneration system potentially discriminates against publishing houses that mostly distribute low-selling or niche publications. These publishing houses are affected by higher distribution costs irrespective of whether they try to adjust the circulation to the demand or not. This discrimination precisely contradicts the intention of the law that allows the formation of a cartel by all competitors on the side of the wholesalers and of the publishing houses in exceptional cases in the interest of non-discriminatory press distribution.”

The Bundeskartellamt had informed the alliance of publishing houses and the BPVG of its investigation results and its resulting preliminary legal concerns. BPVG then notified all magazine publishing houses and national distributors by circulars on 11 December 2019 that minimum sales surcharges would no longer be applied as of 1 January 2020. For this reason, the proceeding was discontinued.