Waterstone's bid is referred to the Competition Commission

The Waterstone's bid for Ottakar's has been referred to the Competition Commission by the Office of Fair Trading (see News Review 22 September). The surprise news has been received with relief by many publishers, authors and agents and the bodies which represent them). This may seem like a uniquely British situation, but the battle raging for control of the UK book trade is mirrored elsewhere, as big booksellers and publishers move increasingly to establish control in the markets they operate in.

Strong lobbying by publishers has been particularly influential. Publishers' Association chairman Richard Charkin said: 'We welcome this decision. We made an extremely strong case to the OFT and our arguments against the proposed merger in the interests of authors and readers have clearly been listened to.' Andrew Franklin of Profile said: 'it should be properly investigated, because it raises some important questions which should be thought about in some detail, not just left to the market to resolve.'

Predictably, city analysts were disappointed and the Ottakar's price fell heavily on the news. Richard Ratner, analyst at Seymour Price, said: 'It looks like the political lobbying by publishers had a big part to play. Their complaints are hypocritical given that they sell to supermarkets at lower prices than they do specialist chains like Waterstone's.' But this misses the point, which is whether the takeover would have given Waterstone's a monopoly in the specialist bookshop sector. To judge by the strength of the publishers' reaction, they certainly thought so, and it is difficult to see how one big chain dominating the bookselling scene would not use its power to drive an even harder bargain with publishers over terms.

Not for the first time, there's a clear divergence between the interests of the book trade and those of the City, which is currently benefiting from a wave of merger and acquisition activity. There is a general feeling of relief that the big battalions have not won – or not yet at least.

So what happens next? There will be months of information gathering and hearings before the Competition Commission gives its ruling on 22 May. Publishers and authors' bodies will be lobbying hard. Watch this space.