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A page turner of a lawsuit
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March 18, 1998: 5:57 p.m. ET
Trade group sues Borders and Barnes & Noble for alleged antitrust violations
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NEW YORK (CNNfn) - The nation's largest group of independent booksellers has sued Borders Inc. and Barnes & Noble Inc., alleging the two bookstores illegally used their influence with publishers to obtain preferential deals on books they buy.
In the suit, filed late Wednesday in U.S. District Court in San Francisco, the American Booksellers Association alleges the chains violated antitrust law and used "secret, discriminatory and unlawful terms" to obtain discounts and subsidies from publishers.
The suit claims violations of the federal Robinson-Patman Act, the California Unfair Trade Practices Act and the California Unfair Competition Law.
A source close to the ABA said the damages, which are still being calculated, "could run into the eight or nine figures" - in other words, hundreds of millions of dollars.
The source said the booksellers' losses will be determined during an eventual trial phase, if the suit goes that far.
In a brief statements, Barnes & Noble said it had not received any formal documents yet, and added it "follows accepted industry practices in all of its business dealings."
Borders also said it had not yet reviewed the suit, but said "Borders has thrived by providing its customers with a massive assortment."
But the suit says the concentration of buying power between Barnes & Noble and Borders - the nation's two largest chains -- narrows the choices available to customers and "threatens to undermine the diversity of book retailing."
Barbara Thomas, president of the ABA, told CNNfn's Lauren Thierry the two chains obtain unfairly favorable deals from publishers.
(132K WAV) or (132K AIFF)
"These deals provide important sources of revenue fueling the defendants' growth in existing markets and expansion into new markets," the suit said.
The ABA said the chains have a combined total of more than 2,000 stores and revenues of more than $5 billion.
With 3,500 members, the ABA is the biggest trade group of independent booksellers in the country. But its ranks have dwindled from 5,200 in 1990, while the big bookstore chains have expanded.
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