back to article UK competition authority probes Amazon

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. …

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Big Brother

There are alternatives

There's always www.abebooks.co.uk .

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however ....

Abebooks are owned by Amazon

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Abe

are part of Amazon now...

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Alternative or the same?

www.abebooks.co.uk - which is owned by Amazon of course!

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Happy

Try Alibris

Try Alibris.com, they provide an excellent service worldwide and don't have any connection with Amazon. I have used them for over three years now and they have not let me down, so far.

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FAIL

W

Why is it the seller's responsibility to adjust their prices according to the price which other sellers sell at? Surely if someone is prepared to pay a high price for something then we should just let them...if they want to shop around they can. I thought that's what competition was!

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FAIL

re: W

Read the story mate. It's the same seller they're talking about. i.e. Joe Bloggs can't sell something for £12.99 through Amazon Marketplace while at the same time seling it on his own joe-bloggs.com site for £9.99.

The reason Joe Bloggs is currently marking up the Amazon price is due to the Amazon overheads.

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W

Why not? It's the same point: if someone wants to pay £12.99 instead of shopping around (amusingly to the original seller's site) and pay £9.99 what's the problem?

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Anonymous Coward

I agree

Some items I will shop arround for, some i'll just get from the most convenient place.

Also, i'm normally willing to pay a little more to shop through Amazon because it allows me to have one user acount to buy books rather than lots with all the different sellers.

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So what's to stop

...Joe Bloggs (Marketplace) Ltd from selling the product at £12.99 through Amazon, and the entirely different entity Joe Bloggs Ltd from selling at £9.99 through their own website?

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Boffin

Not agreeing

Should point out I'm not agreeing either way with the decision, just clearing up that Amazon are not forcing sellers to be the cheapest on the market by comparing about all other sellers as implied by pirateslayer.

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AF

I can see their concern

Amazon don't have a problem with shopping around, that's the thing - they're expecting people to do it, and that seems to be what this is about.

Their concern - justified or not - is that Joe Public might see a book on Amazon from "Bob';s Secondhand Books" for £12.99. They might then shop around and find it on bobsbooks.com for £9.99, and think "Oh, now, wait a minute, I thought Amazon were supposed to be good? Pah, not going there again" etc etc.

Potentially, sellers charging higher prices through Amazon could make Amazon look bad (to Joe Public).

That's what the problem is.

Now, is it fair to ask sellers to sell at a loss/reduced profit? Is it right to ask a seller to play by your rules if they want to join your gang? That's a whole other bunch of questions.

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Stop

Hey...

Leave me out of this, I don't sell on amazon anyway!!!

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FAIL

15%

Wow, that's quite a margin.

This looks like price fixing. The EU will take 17 years to investigate so Amazon have nothing to fear.

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Gold badge

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.

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AF
FAIL

Read the article again

No, they're not trying to dictate prices between different sellers - just that a seller can't sell through Amazon at one price, and their own site at a lower one. That's all.

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Erm...

I'm with Amazon on this one - if it's being sold via their site, surely they have the right to define the pricing structure. Anyone who wants to sell via Amazon chooses to do so under their terms and conditions - if you don't like the T&Cs then go elsewhere!

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Anonymous Coward

Hide the discounts then

Offer free postage or discounted postage on yoru site. Send out dicount vouchers with items ordered that only remit to sales on your site. Either way there are many ways around this scouging of amazon.

Also controling the price in this respect is just begging for the attention of some govermental body.

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Gold badge

Re: Hide the discounts then

They've thought of that. Amazon's text (linked in the article) takes pains to introduce the concept of "total price", which is what the customer ends up paying after all such extras and discounts have taken effect.

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Customers trust that they’ll find consistently low prices

No we don't, we trust it to be average and convenient to use !

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Anonymous Coward

So...

Surely there's a case for sellers to take action against Amazon for charging more comission than other sites?

Also it is perfectly legal (but uncommon) for sellers to pass on credit card transaction charges to their customers. I know one company that does pass on the 2.5% charge on the grounds that they don't feel that customers using other payment methods should subsidise credit card users, which seems reasonable to me. If it's legal to pass on credit card transaction charges to customers then it is surely legal to pass on Amazon's transaction charges and in seeking to prevent this Amazon would be acting illegally.

I suspect that this is aimed mainly at large sellers mostly selling items other than used books. Many companies selling things from sporting goods to electronic equipment sell through several online market places, some don't even bother with their own online shop. It's common for traders to sell through Amazon and ebay and to sell cheaper on ebay because they charge less. I suspect that Amazon are pissed off that ebay like to advertise that goods are cheaper there than they are elsewhere, particularly when the elsewhere in question is Amazon.

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Amazon not as clever as thought

Amazon has decreed that Nationwide credit card holders are not welcome to buy big ticket items from it. For large purchases Nationwide require the 3 digit code on the back of teh card to be provided and preferably also use Verified by Visa. Amazon cannot and will not comply. So they are happy to ignore hundreds of thousands of potential big ticket buyers. I had to call Nationwide to get them to release money for a netbook - such a palaver I'll go elsewhere for the other gear I want

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Anonymous Coward

@John Loader

This is a bit off topic for this discussion but;

Its not that Amazon couldn't comply, its that they won't. They've taken the decision that the fraud and chargeback risk is worth it, rather than take the risk of basket abandons at checkout (which is HUGE with VbV because loads of people still don't understand it). CVV also puts a bit of a crimp on one-click ordering because Amazon are prohibited from storing CVVs. However, as this is Amazon's decision and they're carrying all the risk, I fail to see how its any of the Nationwide's business, and I'd take it up with them rather than castigating Amazon.

Back on topic, looks like price fixing to me, very dodgy and Amazon are big enough for the OFT to take an interest.

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Actually a key reason I use Amazon....

//off topic

...is because they don't use VbV or equivalent.

I've lost count the number of times i've simply walked away from a transaction because they have VbV. It's an extra password i invariably forget and i can't be bothered with all the pish of resetting the password (never mind the joke that passes for 'security' in the reset).

//on topic

I don't know enough to comment on the legalities of what the OFT might be investigating, but i can't see how, in principle, there is a problem. The cost of doing business on Amazon is effectively made higher, but then you don't have to do business on Amazon.....

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Stop

John Lewis

Speaking as a former employee, I would like to point out that John Lewis do *not* match prices in non-physical stores.

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Paris Hilton

John Lewis match prices?

Not on their 'own' brand, of course.

Plus, on other brands, try to match what they sell with what others sell - don't JL have lines specially made different in some small respect, so you can't compare exactly matching products?

Paris - she's matchless!

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AF
FAIL

Dodgy proof reading ahoy!

I think the article's author could have phrased that sentence better - I believe he means

"John Lewis" pricing (which would imply a pricing approach similar to John Lewis')

and not

John lewis pricing (which implies, as you've interpreted it, the pricing policy of John Lewis itself)

John Lewis staff will, in my epxerience, sometimes be quite flexible to price matching if you're nice and don't just demand it, though. If you don't ask, and all that...

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Unhappy

Dixons and Comet

When I bought my Samsung 40" LCD it puzzled the hell out of me why one of the stores had a model number almost but just not quite matching anything I could find on Samsung's site. I'm guessing this is to prevent price matching?

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Unhappy

Same Product, Different Model Number

A branded LCD TV a friend bought from JL was absolutely the same as a cheaper one elsewhere, the specs were identical, just the model number was different. JLs extended warranty made it worth the extra cash though.

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Someone please tell me...

... this is an April Fool's gag...???

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Anonymous Coward

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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Badgers

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.

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Silver badge
Alert

Got it in one, mate.

My company DOES run a book sales portal for small publishers and self-published authors to distribute their books online, and this behaviour on Amazon's part could certainly damage our business as you describe.

We did actually look into selling our books on Amazon at one point but quickly abandoned the idea because (the author in the article is wrong about the percentage) Amazon don't charge 15% commission - they charge SIXTY percent commission on book sales. I know this for a fact because when I went to set up our online store with them that's the figure we were given. That's right, Amazon takes 60% of the sale price. My boss took one pop-eyed disbelieving look at that and said "No fucking way!"

There is a way around it, however. If any of our sellers contact us about this Amazon policy, we'll tell them to tell Amazon that they aren't selling the books on our site - we are buying them wholesale, we are selling them at retail and we are setting the price. Amazon cannot reasonably expect a seller to charge the same at wholesale as they do on retail - to force them to do so is to undermine the entire founding principles of commerce!

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Black Helicopters

15%

So why not keep the price the same, but add the 15% Amazon 'charge' into the p&p/handling? Simples.... both are visible, and if I find myself using a particular 3rd party supplier enough times (initially paying extra for the convenience of Amazon) then I'll (maybe!) make the effort to go direct.

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Same as ebay

Ebay have the same rules, if you want to get good rates for a shop there they insist you 1) list your whole product range and b) keep price parity with your own site.

It's a simple commercial decision - you want to list on ebay / amazon because there are lots more eyeballs there, it's a busy high street and it will bring you customers you wouldn't have had.

But you want them to come to your own site the next time, because you don't want to lose money on listing fees.

The easiest way of pulling people to your own site for their next purchase - be cheaper, as simple as that.

What's in it for Ebay and Amazon then though? They get one paltry commission and lose a customer for that type of sale next time, not worth it.

With these sorts of rules in place it's win win for the ebay and amazon type sites. They get a bigger better product range (courtesy of your hard work), they get some free money from your sale and they don't have to worry about customers leaving their site.

They have to wonder though - what is in it for the 3rd party seller to use ebay / amazon under these conditions? They get a bigger market for sure but at 15% it's a steep price to pay with very little hope of ever pulling them to your own site.

Ever heard the one about the golden goose?

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Monkey See Monkey Do

It looks like Amazon have picked up a (dirty) trick from Apple who have set similar conditions on any supplier of ebooks to its iPad.

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FAIL

Just means less $/£ for seller, more profit for Amazon/eBay

I'm sure this just means more commision $/£ in the long term for Amazon/eBay?

They already make enough profit anyway. It's just the seller who's loosing out.

Also, how is Amazon/eBay suppose to control a seller's own website anyway and hence their prices?

When I buy something online, Google Shopping is the first place I look and if the item I want happens to be on Amazon or eBay at a good price (not neccessarily cheapest) (plus no more than 2 negatives in the past month for the eBay seller), i'll get it from there.

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I'm with Amazon on this one...

When I find something I want on Amazon market place, I often have to do a search to find the companies own site to check that they aren't offering it cheaper. And of course if they are I don't use Amazon. So Amazon is giving the seller free advertising. This is unfair for Amazon and also a pain for the consumer. I'd like to have confidence that the price on Amazon is cheapest.

I really don't see the problem here, if companies don't like paying the 15% commission, then they don't have to use Amazon, no one is forcing them. Either offer consistent pricing or GTFO.

Simples.

Andy.

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Thumb Up

If we call it "The Amazon Tax"

sound a *little* bit more like what it does.

Note that this discusses "second hand* books, not new stuff direct from publishers. So the price is whatever the original seller has been able to get them for.

Note that if Amazon *really* were concerned about their "best price" on the Net reputation they would mark such suppliers (on the suppliers pages) as offering cheaper on their own (much smaller range of items probably) web sites to avoid the dreaded "consumer confusion". No requirement to offer a link (or even a listing of which suppliers do undercut them) just a note on individual suppliers pages. Your choice. convenience (and presumably the ability to employ a decent security and backup team) versus lower cost up front.

The OFT might also consider that common pricing in a free market could also be called a price fixing cartel. Something which *certain* suppliers in the UK (especially the building trade) have quite a lot of practice at doing.

thumbs up for taking a look at them.

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There are ways round it

How about the book sellers offering loyalty rewards for buying direct. 15% off your next purchase. Technically they are being sold at the same price, but you get a discount equating to the Amazon markup.

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