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Amazon moves towards a monopoly

26 March 2012

I'm afraid we can't escape Amazon in the news at the moment. In Publishing Perspectives Bryce Milligan, the publisher of small American indie Wings Press, asks whether Amazon's philanthropic grants are not just helping along their company aim of overwhelming the competition. The independent Publishers Group of small publishers is currently engaged in a battle with the Internet giant. The options don't look good - either trade with Amazon at a discount, which means the publisher will actually lose money, or don't trade with them at all. For a small publisher these impossible conditions mean the loss of a vital customer. With the way internet book sales are growing, how can they survive this over a period of time and continue to trade?

This looks very much like the exercise of the monopoly which many have been fearing for some time, and, worryingly, it looks almost too late to stop Amazon. In the UK the Office of Fair Trading recently allowed Amazon to take over what amounted to its only real competition, The Book Depository, even though they already have a dominant position in online book retailing.

Of course you could argue that it doesn't make sense for the biggest online retailers in the US not to be covering the widest range of books possible - isn't that what you go to Amazon for? The ability to source a huge range of titles has always been one of the company's biggest selling-points, even though people don't on the whole want to wait up to six weeks whilst they order something - perhaps a book from a small publisher - which they just don't happen to have in stock. Even with second-hand books, Amazon has the market cornered and has set it up so that they don't have to do much work, just pass the order on to the used book dealer whilst raking off its profit.

Seth Godin, who makes this point about Amazon needing to sell everything, goes on to say: 'There's been a long history of ubiquity at the bookstore. With a few extreme exceptions, just about every book is available at every bookstore if you're willing to order it. Universal availability feels like part of the contract we make with bookstores-we expect them to sell everything. In the digital world, this goes triple, because there's no issue of shelf space to deal with.'

So, what's to be done? As the US Authors' Guild recently concluded:

'A truly competitive, open market has no indispensable player that can call the shots. The book publishing industry has such a player, and Amazon is poised and by all appearances eager to use its muscle to rip up the remaining physical infrastructure of book retailing and the vital book-browsing ecosystem it supports.

If Amazon succeeds, the free market will have had little to do with it.'

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