Feb 15 2013

Lord Lucas on the threat from Amazon

Posted by: Nick Shaxson in: Thoughts

Take a look at Lord Lucas in Britain’s parliament, talking very frankly about Amazon. I can’t embed this video, for some reason. Still, this is scary stuff. Some excerpts:

Amazon is an amoral monopsony in its growth phase. It is using extremely low margins to drive market share. It is using aggressive tax avoidance to afford those low margins. It is not just us that it does not pay tax to; it does not pay tax to anybody.

That’s mostly true. (It does pay some tax, but escapes most of it.) The broad point is well made, though.

And then read this.

We now have nowhere to shop on a large scale. The internet retailers have control and the internet retailer that will have control above all is Amazon.

Suppliers will then become dependent on the one retailer. It is clear where Amazon intends to go after that: it intends to take out the publishers. It is already doing that in the States, forming its own relationships with authors and publishing its own exclusive-to-Amazon books. At the end of the day, what need has a company with three-quarters of the book trade of independent publishers? It can do everything itself.

It will continue to use a wide range of predatory tactics to do that. Amazon trawls the web to make sure that it always offers the lowest price on anything. It compels suppliers to charge it less than they do anybody else, on pain of being dropped-either individual projects or entirely. It runs this thing called Amazon Marketplace, where little traders can go, but it knows everything that happens in that marketplace: all communications between a business and its customers, what is being sold and at what price. When it sees a good opportunity, it goes to the supplier and undercuts the trader.

If you use Amazon fulfilment, it will clean up your complaints file so that bad notices will not remain for others to see. If you do not use Amazon fulfilment, it will not. It provides a home for people who are breaching copyright by importing books from outside the appropriate area. It provides a home for people who are running VAT scams. In one way or another, if we do not do something as a Government to remove the tax bias that benefits it, to enforce our existing laws and to put it through the Competition Commission, we will find that we have been steamrollered by Amazon.”

This is big, serious stuff happening. We’re like the frog put into the steadily warming pan of water. It’s already pretty hot.

Oh, and then there’s stuff like this.

Hat tip and transcript: Richard Allen, RAVAS.

2 comments so far

Demetrius 2th February, 2013 1.37 pm

What is both worrying and scary is that once I was able to go into the town centre and have a choice of shops, even often for particular requirements. Now I am finding that even for more general things there are no shops in town to go to,

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