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PA and IPG unite to oppose Amazon/TBD
15.07.11 | Lisa Campbell
The Publishers Association has united with the Independent Publishers Guild for the first time to oppose the merger of Amazon and The Book Depository, while calling for a wider public investigation into the competition between the online and bricks and mortar bookselling market.
In an unprecedented move, the PA and IPG have banded together to urge the Office of Fair Trading to stop the merger of the online retailers, which was announced last Monday (4th July). By Tuesday, the OFT had asked for submissions from the public and other parties concerning "any competition or public interest issues". Its stance reflects the seriousness with which the PA and IPG members are treating the proposed merger.
In a statement, Richard Mollet, c.e.o. of the PA, said: "The Publishers Association will be making a joint submission with the IPG; the first time that our two organisations have collaborated in this way. This reflects the strength of feeling among publishing companies that the OFT should block this merger."
Going further, Mollet said more should be done to investigate the fairness of the market share internet-only retailers have in comparison to physical bookshops. He said: "Whatever the decision in this particular case, we feel it is high time that competition authorities took a closer interest in the developments of the book retail market—especially given that data from BML shows that internet-only retailers have 31% of the retail market by value, and growing."
The OFT does have the power to investigate markets that do not appear to be meeting the needs of consumers, with possible outcomes including taking competition or consumer enforcement action, encouraging businesses in the market to self-regulate, making recommendations to government to change regulations or public policy, making a market investigation reference to the Competition Commission and improving the quality and accessibility of information for consumers. The OFT said it could not comment on whether it would look into the bookselling market as a whole while it is still investigating the merger of Amazon and TBD.
More than 100 members of the IPG responded to a survey expressing concerns that the merger would give Amazon too much power in the online bookselling market, which may lead to it having more leverage when demanding better terms from suppliers.
One IPG member said: "I am fearful that this would lead to aggressive demands for extra discount by Amazon." Others worry Amazon's market dominance could mean eventual market control and increased pricing of books for consumers, particularly of e-books. It may also result in a decrease in range of books available for consumers, another said. "In terms of the sale of printed books, there are other alternatives for consumers while bricks and mortar booksellers survive, but in terms of e-books there are few credible alternatives to Amazon. The Book Depository is one of them," one publisher said. Another said that the merger would mean "less choice, less discoverability, less range". Another added: "It [the merger] will restrict their [consumers'] choice and Amazon, as the only source of online sales, will potentially be able to offer poorer discounts as competition dries up."
Many IPG members expressed scepticism that TBD would be run truely independently of Amazon, as the company has claimed it will.
Bridget Shine, executive director of the IPG, said: "Our survey shows that our members are deeply concerned about the impact of Amazon's anticipated acquisition of its nearest competitor. It would ultimately lead to reduced choice and increased prices for customers."
Last week, the Booksellers Association announced it would formally oppose the merger, describing Amazon as already having a "de facto monopoly".