Up the Amazon
01.01.70 | Neill Denny
The Office of Fair Trading has delayed its verdict thrice before delivering what is plainly a wrong decision—to clear the merger betwen Amazon and The Book Depository. Perhaps the bureaucrat's intention was to show how it agonised over its verdict.
In justifying its bizarre decision, the OFT resolved that taking over The Book Depository would not result in a substantial lessening of competition in the UK, this as TBD only has 2%–4% of the online market. At a basic level this is of course true, that such a small market share swapping ownership can never lead to a “substantial lessening”, but given that Amazon already has 70% to 80% of the market it is a semantic smokescreen of the worst kind. The OFT is ignoring the 800lb gorilla in the room to study the pattern on the carpet.
Even worse, considering that TBD was the biggest online-only competitor to Amazon, and the struggle it had to get to just 4% of the market, a chance like this to shine a spotlight on Amazon is unlikely ever to come again.
Indeed, by the OFT's twisted logic, whoever Amazon took over in the online book trade would not trigger an enquiry, because it could not lead to a “substantial” lessening of competition. Laughably, the OFT even posits that a high level of competition on Amazon's own Marketplace by other retailers continuing post-merger as somehow evidence that the disappearance of TBD would be immaterial. Perhaps the OFT didn't quite understand that Amazon earns money from every transaction on Marketplace.
The rubber-stamping of this deal by the OFT means the best chance to investigate Amazon in 15 years has slipped past. British book retailers, and publishers, are now increasingly threatened by a competitor with almost limitless pockets, intent on customer acquisition at almost any cost. Amazon's range of secretive activities across the book trade threatens to gravely weaken one of Britain's most important creative industries, and the government does nothing.