The Netherlands Competition Authority aspires more competition regarding e-books

The Netherlands Competition Authority (“NMa”) announced its points of view regarding the development of e-books and hopes the competition regarding Dutch e-books will increase.

The NMa responds to an earlier decision of Halbe Zijlstra, the Dutch secretary of Culture, who announced he is not planning to set a fixed price for electronic books, although for regular books there has been a minimum price for decades in the Netherlands. The main reason for not regulating the price of e-books, is because this would not be in the interest of innovation in the media sector.

Research shows one of the reasons the competition does not seem to evolve, is the fact that booksellers often follow the price advised by their publishers. Following the decision of Zijlstra, publishers can no longer determine the price, therefore sellers can compete on the price of their e-book.

Another reason for lack of competition could be the high VAT rate which is charged for e-books in the Netherlands, as the e-books are not considered goods but services, creating a tax rate of 19%. In other European countries also high VAT rates apply to digital books, while some states in the US, like New York, exempt e-books from the levy.  

Fortunately, the European Parliament adopted a resolution longing for a lower VAT rate to digital books, newspapers and magazines. Now, let’s hope the European Commission will respond and take action.

Reference: NYTimes