Tim Godfray
| By Lisa Campbell
The Booksellers Association has said the Office of Fair Trading’s decision to clear the merger between Amazon and The Book Depository will give Amazon more power to put its competitors out of business.
The OFT announced today its four-month-long investigation into the merger of the two internet companies and said the takeover would not lead to a lessening of competition within the UK book industry. The decision has prompted calls from the Publishers Association for the body to monitor the book retailing market as a whole, particularly online bookselling.
The BA said the merger will hurtle the industry further into a “monopoly situation.” Tim Godfray, chief executive of the BA, said: “ Amazon now has even more power to put its bookseller competitors out of business and, having done that, it will be in an excellent position to increase prices and/or reduce choice.”
The OFT decided there was limited pre-merger competition between the two companies and found that competition within Amazon Marketplace would continue to be strong after the takeover. It also found that with popular books, Amazon would face strong post-merger competition from bricks and mortar booksellers, supermarkets and other online retailers, including other Amazon Marketplace sellers. For deep range titles, the OFT decided Amazon would face rivalry from other online retailers and Amazon Marketplace sellers.
Godfray added: “The numbers of high street bookshops are currently declining, producing, in effect, less competition for Amazon. The suggestion by the OFT in its judgement that sellers on Amazon Marketplace offer competition to Amazon, when the latter takes a commission on every sale, is difficult to understand. Any deal that threatens their survival on the high street still further should receive proper scrutiny by the government and competition authorities. In any review of competition issues, we think that the public interest aspects should play an important part.”
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