Amazon’s agreement to acquire The Book Depository and the UK competition authorities’ prospective interest offers the chance to revisit Amazon’s lack of reporting of details of its UK business performance.
This was first highlighted in In Focus last November and this is surely ideal for nailing the extent of Amazon’s domination of the £400m UK online book sector and, thereby, its position in the overall £2+bn UK market, as well as its profits and the taxes it pays. Surely Amazon’s investors and its employees are entitled to know the basics by major market for the world’s largest online retailer that is also one of the UK’s 20 biggest retailers?
Retail Week Knowledge Bank’s latest profile revises upwards Amazon UK’s 2010 sales that are now estimated at about £2.5bn, of which domestic sales accounted for up to £2bn, including perhaps £900m attributable to ‘media products’, with books a substantial, but minority, share of that.
Trade estimates are that Amazon has about 70% of the UK online book market which, with The Book Depository, would exceed 80%. This is a high proportion of any major, distinct market segment, even though it appears yet to breach the 25% threshold of the total UK book market, the usual trigger for a Competition Commission investigation. But it is coming ever closer.
The Competition Commission may investigate and reveal the scale of Amazon’s UK books business in the online market, including fast-rising downloads and, thereby reveal Amazon UK’s overall scale, business breakdowns and financial outcomes. Meanwhile, given widespread sensitivity over CSR and business transparency, one might hope Amazon’s influential European management will call internally for proper disclosure.
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