"Books Should Be Cheaper" vs "Save Small Publishers": What Do You Think About the Fixed Book Price System Controversy?

Conflict Between Government and Publishing Industry Over Revision of Book Fixed Price System
Introduced to Prevent Monopoly by Large Publishers... Pricing Issues Remain a Challenge

On the afternoon of the 19th of last month, a bookstore in Seo-gu, Gwangju, showed a quiet scene. / Photo by Yonhap News

[Asia Economy Reporter Lim Juhyung] The conflict between the government and the publishing industry over the revision of the Book Fixed Price System is deepening. The Ministry of Culture, Sports and Tourism (MCST) has expressed its intention to broadly reflect the opinions of stakeholders, but the Korea Publishers Association claims that the MCST suddenly halted discussions on the improvement plan of the existing public-private consultative body for the Book Fixed Price System and has decided to respond by forming a joint countermeasure committee.

The Book Fixed Price System is a system that legally enforces a fixed price on books so that publishers cannot sell books below a certain price. It was introduced in 2014 to prevent large publishers from monopolizing the publishing market through discount offensives. However, this issue is expected to become more complex as it involves not only large and independent publishers but also consumers who directly purchase books.

The current Book Fixed Price System requires publishers to display the fixed price specified by law when publishing periodicals, and sellers can offer price discounts up to 10% off the fixed price and additional discounts such as points or mileage up to 5%. The law also includes an additional clause that mandates reviewing the system every three years to consider abolition, maintenance, or relaxation and to take necessary measures. Accordingly, after the review in 2017 following its introduction, another review process will take place this November.

Since July last year, the MCST has formed a public-private consultative body including the publishing industry, electronic publishing sector, distribution sector, and consumer groups, and reportedly held 16 meetings until June to organize key issues related to the revision of the Book Fixed Price System.

However, conflict arose when the MCST held a public debate on improving the Book Fixed Price System on the 15th of last month in Donggyo-dong, Mapo-gu, Seoul.

At that time, the MCST explained that the debate was held to hear the opinions of various stakeholders, but the publishing industry refused to attend, calling it an act that disregarded existing discussions and procedures.

The Korea Publishers Association protested that the MCST notified them at the end of July that it would completely halt existing discussions and prepare improvement plans from a new perspective.

A stack of books at a local bookstore in Seoul. The Korea Publishers Association expressed opposition on the 6th, stating that the Ministry of Culture, Sports and Tourism had notified them of the suspension and reconsideration of the public-private consultative body discussions on the book fixed price system. / Photo by Yonhap News

On the 6th, the Korea Publishers Association expressed deep concern, stating, "The MCST is showing an attitude that undermines the painstaking efforts of the publishing industry to supplement and improve the revised Book Fixed Price System since 2017," and urged, "Provide a clear explanation and an official response regarding future directions."

They added, "The Book Fixed Price System, which has been maintained and developed with improvements over 18 years, is a matter of survival especially for small publishers and neighborhood bookstores," emphasizing, "If this revision is damaged or has other ulterior motives, we will respond with full force." The Korea Publishers Association plans to hold an emergency countermeasure meeting with related organizations such as the Korea Publication Culture Association and the Korea Federation of Bookstore Associations to discuss response measures.

Meanwhile, consumer opinions on the current Book Fixed Price System are divided. Some agree with the original purpose of diversifying published books and supporting small publishers, while others criticize it for hindering market competition and limiting consumer choice.

A 27-year-old office worker A said, "Recently, on social networking services (SNS), unique books published by independent publishers and neighborhood bookstores with a different vibe are trending," adding, "If indiscriminate price competition had allowed only large publishers to survive, such books or bookstores would not exist. I believe the Book Fixed Price System is necessary to provide new opportunities in the literary world."

Another office worker B (31) said, "Countries with developed humanities like France and Germany have similar Book Fixed Price Systems to Korea," and added, "No law is free from controversy, but that is a matter to be discussed gradually, and the purpose of the law is worth preserving."

On the other hand, C (28), who opposes the Book Fixed Price System, said, "It doesn't make sense for the government to fix prices of goods sold in the private market," and criticized, "If book prices are fixed, who will be harmed? Only the lower-income people who find it difficult to buy books due to lack of money will be hit."

Last year, a petition urging the abolition of the Book Fixed Price System was posted on the Blue House's petition platform and received over 200,000 signatures. The petitioner at the time emphasized, "The current Book Fixed Price System is a regulation that just exploits the small number of readers," and stated, "Books as a medium for knowledge transmission should always be supplied at affordable prices wherever they can be obtained."

People choosing books at a local bookstore. / Photo by Yonhap News

Meanwhile, according to a survey, consumers have shown a positive response to discounts under the Book Fixed Price System.

According to the "Consumer Awareness Survey on the Book Fixed Price System" released by the MCST on the 15th of last month, among 2,000 respondents, 36.9% had a positive opinion of the Book Fixed Price System, higher than the 23.9% negative opinion. However, 70.7% responded that the current discount rate should be expanded, overwhelmingly higher than the 26.0% who favored maintaining the current rate.

Consumers seem to view the purpose of introducing the Book Fixed Price System positively but also agree with revising parts of the law to lower book prices.

Meanwhile, an expert suggested that excessively strict price fixing harms both consumers and sellers and that the Book Fixed Price System needs to be relaxed.

Professor Lee Eunhee of the Department of Consumer Studies at Inha University said in a phone interview with Asia Economy, "In an open market economy, government-enforced price fixing disadvantages both competition among companies and consumer rights," adding, "Especially in markets like publishing, where expected growth rates are not high, lowering prices is an important competitive factor. In this case, it can undermine the competitiveness of large companies and cause a vicious cycle where small companies are also hit due to overall market shrinkage."

Professor Lee added that while relaxing the Book Fixed Price System to allow companies to compete on price, neighborhood bookstores could be supported through other means such as regional voucher payments.

Meanwhile, the publishing industry has decided to respond by forming a joint countermeasure committee. According to the publishing industry on the 8th, about 30 related organizations formed the "Joint Countermeasure Committee to Defend the Book Fixed Price System" at an emergency meeting held on the 7th in the large auditorium on the 4th floor of the Korea Publication Culture Association.

The committee stated, "Participants condemned the recent MCST's disregard for the consensus reached through 16 rounds of public-private consultative meetings, the postponement of signing the agreement, the sudden reconsideration of the Book Fixed Price System, and the rejection of proposals to reactivate the consultative body for further discussion."

They added, "Regarding the e-book sector, which is a key issue, participants said that if companies want to receive tax exemption benefits, they should comply with the Book Fixed Price System, and it is clear who the companies are that want to engage in discount competition outside the system."