There’s nothing to investigate

Pity the poor independent booksellers caught up in the three-way price war between Amazon, Walmart and Target. The independents and the American Booksellers Association that represents them sent a lengthy letter to the U.S. Department of Justice asking for an investigation into what they contend is illegal predatory pricing action.

Good luck with that. Although the Justice Department has been known to act irrationally when it comes to reviewing the anticompetitive aspects of mergers and acquisitions, the pricing action by the big book sellers hardly seems illegal. It certainly isn’t good for the independents’ competitive prospects, and Target would have preferred that Walmart and Amazon had taken an approach to pricing that didn’t involve using popular new releases as loss leaders. However, Walmart needs to demonstrate price leadership, and Amazon couldn’t sit by after Walmart dropped prices. Neither could Target, which had to lower prices to live up to its “low price promise. Target can absorb the negative margin impact, but for independent book retailers the promotion is another step down a path of no return already traveled by independent pharmacies, hardware stores and pet shop owners.