UK competition authority probes Amazon
Move to John Lewis pricing pisses off sellers
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The Office of Fair Trading is investigating complaints received about Amazon's introduction of a new pricing scheme for people using its UK site to sell second-hand books and other items.
Amazon.co.uk is pushing sellers to make sure the prices they offer on Amazon are the same as or lower than they offer anywhere else online.
Many sellers offer books or other products on Amazon for a certain price and on their own sites for slightly less - because sales on their own websites are commission-free. The requirement for price parity began yesterday, but will not be actively enforced until 1 May.
A spokesman for the bookseller said:
We are simply asking sellers who choose to sell their products on Amazon Marketplace not to set prices on Amazon that are higher than the prices they sell at elsewhere. Customers trust that they’ll find consistently low prices on Amazon.co.uk and we think this is an important step to preserve that trust. This general requirement already exists for many of our seller agreements in Europe (and all seller agreements in the US) and we’re now introducing it for the remaining seller agreements in Europe.
Sellers range from hobbyists to specialist bookshops which use Amazon as their main online presence.
One bookseller who spoke to us on condition of anonymity said: "There's already a climate of fear - Amazon is brutal and known to throw people off the site with no recourse or appeal. Amazon wants to dominate online secondhand book sales and this will help them. I offer books cheaper on my site because i don't have to give Amazon a 15 per cent commission payment."
Some forum posters believe the new policy will only be enforced against big sellers, because checking every item would be too much of a burden on Amazon's systems.
Amazon's explanation of the change is here.
John Lewis pricing (the chain famously claims to be "Never Knowingly Undersold") applies to all non-physical stores including catalogues, mobile applications or other websites like ebay.co.uk.
The OFT will study the complaints received before deciding whether the market needs a little help or if the problem should be referred to another competition authority. ®
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COMMENTS
Monopoly
There must be a case to answer here. Amazon are attempting to dictate pricing between their suppliers and *other* resellers, which they have no business doing, and quite clearly intend to make it hard for anyone new to come along and challenge their current monopoly.
Up there prices or lose dosh.
If a book seller has to pay 15% to Amazon and is not allowed to charge less for books on there own site where there is no 15% surcharge, then surely that means most book stores will need to increase there instore book prices by 15%.
Looking at a random book I note the following:
"In Stock.
Ships from and sold by Amazon.com." @ 47% off.
Being that Amazon are going to be using there strong domanat position to 'fix' the prices for other re-sellers so that they can not compete by offering there products on an alternitive site for a diffrent price, even though for example sombody other than Amazon might be offering them similar services but for less than 15%.
The reason I think this has been pulled up, is because if i want to start an online bookstore called "iamthebooklord.co.uk" and my buissness model is for other stores to sell threw my web portal, where I take say 2% commision on sales, the book stores that also trade on Amazon would not in theory beable to sell there books threw my portal to the customers for a lower price even though there overheads are lower. Thus my portal can not compete with Amazon fairly. Additionaly if what I understand is correct that you can lose your Amazon buissness overnight with no recourse, I suspect I would not even beable to drum up any buisness for my portal in the first place due to sell's fears of being cut off.
If that is not monopolistic behavour I don't know what is.
Surprised?
Whether it's Amazon, eBay or the supermarkets - when competition is reduced to a few huge retailers, the smiles fade and the gloves come off - and price control of suppliers is a long-established tradition.
Ask any business - milk, veg, etc - who supplies supermarkets. When you see this week's special offer on, say, lettuce - chances are it's the supplier taking the loss (whether they like it or not) not the supermarket.
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