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Wednesday, 13 July 2011

The Book Depository & Competition

As the world debates one issue of competition (News Corp's bid for full ownership of BSkyB) it's worth remembering, as writers and readers, that another stifling of competition is happening right under our noses. It's been announced recently that Amazon have aquired The Book Depository, probably the fastest-growing bookseller in Europe. Now, I can see why this looks good for Amazon but just hold on a minute - Amazon already had 70% of the UK online book sales. 70%! Its largest rivals? Well, The Book Depository and It's sorted out one of those problems with this acquisition, hasn't it?

Amazon has been blamed for a lot in the UK in recent years. Their online bookselling has decimated the book trade in our cities, muscling many independent book shops out of business and pushing big chains to the edge (and sometimes over the edge). Along with it is one of the companies responsible for HMV's current struggles as they monopolise the film and music market. We all know why - Amazon are cheap. They offer an attractive prospect to consumers struggling with the economic downturn and wanting to maintain their level of purchasing without actually spending the same amount of money. I think we're all guilty of bowing down to them on this point. I'm trying to implement a set of rules for my own Amazon purchases but my bank balance isn't too keen on it. I take a hit while trying to stick to my ethics.

I can think of no better illustration for how Amazon mercilessly attacks the profits of small publishers than this blog by Linen Press. I'm pretty sure this is the third time I've quoted this article but it is well worth reading - every time someone buys a Linen Press book through Amazon it actually costs the publisher £2. That's right: it costs the publisher because Amazon takes 60% of the RRP. Go look at the figures in the article; it makes for lousy reading.

The beauty of The Book Depository is that it maintains a list otherwise not available to the public. On their website they proudly state that they're seeking to make available the widest selection of titles possible and they aim to republish those no longer available through their Dodo Press imprint. How much will this be squashed by the profit-hungry Amazon, who cut things down to the bone in order to protect their profits? The Book Depository is also famous for their free delivery. Amazon do this on orders over a certain amount; is this something which will pass along to their recent acquisition?

There's absolutely nothing we can do about Amazon's ethics - or lack thereof. However, when a company monopolises 70% of the market and then acquires some more, surely questions have to be asked? The Office of Fair Trading haven't announced whether there is something for them to look into here. I'm a cynic: whether it is or isn't a strangulation of competition the OFT will wave it through because they're dealing with Amazon.

What will that mean for consumers? Well, we get cheaper prices. But, at some point, when Amazon hold 100% of the market and can push smaller companies into the abyss with barely a nudge, we'll come to regret saving a bit of money now and then. Choice will shrink. Good books will be muscled out in favour of profitable books. What will we do then?

This Guardian blog is also enlightening.

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