Tuesday, July 05, 2011

If Jay Gould Loved Books

In the 1870's, financier Jay Gould tried to corner the silver market and precipitated a financial panic.

As a result of that and other market manipulations, the U.S. Congress took steps to prevent anyone from creating a monopoly.

Not that corporations don't still try.

No one should be surprised that Amazon has decided to acquire The Book Depository, a UK-based online vendor of the written word. The Book Depository represents Amazon's competition, another firm that sells books online. The difference is that one ships for free, and makes that quite clear on its website.

Free shipping isn't what Amazon does. They sell books at low prices.

Fans of The Book Depository worry that Amazon will quickly end the free shipping program, and they don't like the idea of having to pay more for a product just because their preferred vendor was bought out. They'll seek other sources, but the competition is declining because Amazon is doing its best to corner the online book selling market.

The U.S. isn't the only nation concerned with unfair trade and anti-competitive business activities.

The U.K.'s Office of Fair Trade is calling on the public to voice their concerns about the deal. The merger will be subject to British anti-competition laws, and there is no guarantee that the deal will go forward.

It's natural for a business to want the entire market to itself, because when there's no other game in town, the prices can climb to the limit the customer will bear and that's how the bottom line gets padded.

For its part, Amazon will do all it can to convince the regulatory body that there's plenty of competing fish in the sea. Those opposed to Amazon's take-over of the book business will have to prove that the behemoth is slowly choking out its competition, and somewhere down the road, the consumer will suffer.

He who brings the best argument can claim victory. Will it be Amazon or some average citizens of Western Australia who can show harm from the proposed merger?

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