The Bookseller.com

2nd December 2008

Amazon is not dominant, say lawyers

19.06.08 Benedicte Page

Media and competition lawyers have poured cold water on suggestions that Amazon's tactics in its terms dispute with Hachette could put the online retailer at risk of committing an abuse of a dominant market position.

Book trade insiders had suggested that the ongoing dispute—which has led to Amazon.co.uk taking down the "Buy New" button on a number of Hachette titles—could be in breach of competition law. The abuse of a dominant market position is an offence under the UK 1998 Competition Act and also under European law.

A senior publisher said: "[Amazon] stands to lose much, much more than Tim [Hely Hutchinson, Hachette UK c.e.o.]. If this blows up and gets referred to the Competition Commission, it smacks of an abuse of dominant market position and Amazon is in deep trouble."

However, Christopher Brown, a competition lawyer at London firm Farrer & Co, said: "In order for an abuse of a dominant market position to be established, you would have to show that Amazon was dominant in a market. This will perhaps depend on whether there is a separate market for online book retailing. Even assuming that dominance was established, removing the 'Buy New' button appears to be part of the broader trading dispute, so it comes down to a question of whether the price Amazon is offering to Hachette is unfairly low. There has never been a successful case either at European or national level where a company was found to abuse a dominant market position by imposing unfairly low prices. This is no great surprise—working out what is a 'fair' price is very difficult and competition authorities don't want to be price regulators. I would be very surprised if there were an abuse case here."

Caroline Kean of media law specialist Wiggin added: "I don't think they [Amazon.co.uk] are in a dominant market position. They are not the only retailer on the net, and they are not the producers [of the books]. You could still obtain them somewhere else." This week, Kate Mosse's Labyrinth, one of the titles with its "Buy New" button removed on Amazon, was being heavily promoted on rival websites, with 30% off on Waterstones.com and inclusion in a "two for £10" offer on Play.com.

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