Bookshops hit back at Amazon 'bullying'

INTERNET giant Amazon has been referred to the Office of Fair Trading amid accusations by Scottish booksellers that it is "bullying" them out of business.

For some bookshops, Amazon represents more than half of their online business and a substantial part of their overall trade.

But now the company has told the shops they cannot sell books cheaper anywhere else online, even on their own websites. It has issued an ultimatum saying that unless the stores sign up to a new agreement by Wednesday they risk being delisted.

Up to a dozen stores have now complained to the OFT that Amazon's actions are unfairly restricting their ability to sell books to customers at lower prices.

Books typically sell for 10 per cent less on some alternative websites – as Amazon charges fees for its services – but the company says it has been forced to act to protect its low-price promise to readers.

Tim Godfray, chief executive of the Booksellers Association, said the organisation was backing the OFT referral. "Booksellers are already concerned about pricing issues in the current free price environment, and we encourage the OFT to look into this move by Amazon," he said.

"We would ask, are we in a free market? Is it permissible for an internet bookseller to control in some way the pricing of another seller's products? We look forward to an OFT ruling as soon as possible."

There are thousands of sellers on Amazon, many of whom have their own websites, and whose stock levels range from just a few hundred books to the megasellers who have 100,000 titles online.

Many of them use Amazon Marketplace, a hugely successful online service launched in 2001 that lets customers sell new and used books.

It has become a major trading place for bookshops even though Amazon charges Marketplace sellers 25 per month and a range of fees that increases the price of books. They have now been warned not to sell books at prices that undercut Amazon.

One Scottish bookseller, who asked to remain anonymous for fear of reprisals by Amazon, said the action by the company was "bullying."

The bookseller, who runs an award-winning shop, sells on Amazon and other sites, as well as through his own website.

"I was appalled when I discovered what Amazon intended to do," he said. "In effect, Amazon is attempting to stop me and other sellers deciding what price we sell at on different sites.

"This despite the fact that it costs us less to list on some other sites. For some time I have been offering books on my own website at 10 per cent less than I sell on Amazon and on other sites, partly because there is no commission to pay on my own site and partly to drive traffic to my site.

"This is nothing but a bullying attempt by Amazon to use its strength on the internet to get an even greater proportion of online business.

"It is in my view anti-competitive, is a form of price fixing and ultimately will lead to customers paying higher prices for the same products."

Vanessa Robertson, who runs the Edinburgh Bookshop and the Children's Bookshop, claimed Amazon's move was aimed at increasing its market share.

"Market share matters more to them at the moment than profit," she said.

"We try to avoid the same things that Amazon sell. For example, our cookery section has no Jamie Oliver or Gordon Ramsay books.

"We offer a personal service and have great community interaction – we have three book groups – all the things Amazon does not offer."

The complaint against Amazon has also attracted support from leading authors in Scotland. Alexander McCall Smith, author of the globally successful No 1 Ladies Detective Agency series, said: "I am concerned about any strategy that may make it more difficult for bookstores to be competitive. It is vital bricks-and-mortar bookshops continue to exist – that people can hold and touch books – and the market does not become an exclusively virtual one."

Amazon has a history of flexing its muscles with publishers. In 2008, the company came in for criticism over its attempts to prevent publishers from direct selling at discount from their own websites. Earlier this month, it settled a major dispute after it removed the "buy buttons" from all Macmillan books as part of an ongoing conflict about electronic book pricing.

A spokesman for Amazon UK 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."

A spokeswoman for the OFT said the complaints would be considered and a response issued in due course.