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Closing the Books on a Lawsuit

Independent booksellers' association settles its antitrust suit against Barnes & Noble and Borders

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An antitrust lawsuit against Borders Group (Ann Arbor, Mich.) and Barnes & Noble (New York) was abruptly ended when the American Booksellers Association settled the case for about $4.7 million. The amount is believed to be significantly less than the legal fees for the group, which represents independent bookstores.

The association settled the suit after a federal court judge in San Francisco dismissed much of the case in preliminary hearings. The suit was the culmination of nearly 20 years of legal challenges by the declining independents against the powerful national chains. In the last 10 years, the independents'share of the consumer book market has fallen to 15 percent, from 33 percent in 1991.

Borders Group announced that it would pay $2.35 million under the agreement, and Barnes & Noble is purported to be paying the same. An executive of the association said it had incurred $18 million in legal fees so far.

The suit charged, among other things, that the two chains have been able to buy books at prices lower than the independents have to pay, sometimes lower even than publishers'publicly stated terms. Lawyers for the chains argued that the independents also negotiate aggressively for the best prices they can get, and that it was legal to encourage one publisher to match another's terms. Each chain, in a separate statement, called the settlement a “vindication.” And Greg Josefowicz, Borders Group president and ceo, said that the settlement allows Borders to avoid anticipated ongoing expenses relating to the suit. The company's earnings estimates for 2001 will remain unchanged as a result of the settlement.

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