The American online retail giant announced yesterday plans to gobble up its biggest British competitor, The Book Depository, for an undisclosed amount. However, the U.K.’s Office of Fair Trading responded today by launching an investigation into the proposed acquisition.
The deal would give Amazon control of Europe’s fastest-growing bookseller and bring the company one step closer to monopolizing the retail book industry. Currently, The Book Depository offers free shipping on 6 million titles to more than 100 countries and boasts more than one million customers. The firm also sells e-books and operates its own publisher, Dodo Press.
“We look forward to welcoming [The Book Depository] to the Amazon family,” Greg Greeley, Amazon’s vice president of European Retail, said in a statement. He added that the acquisition is “subject to customary closing conditions, including regulatory approvals.”
That process may prove challenging, as the U.K.’s regulatory department today launched a preliminary investigation to determine whether the deal would lead to “a substantial lessening of competition” in the market. The “invitation to comment” will allow the public to voice concerns about the acquisition and will remain open through July 18.
Though the deal would spell the most trouble for small booksellers in Europe, Australia, and New Zealand—countries where The Book Depository already controls much of the retail book market—experts say Amazon’s increasing global dominance bodes poorly for bookstores here in the United States too.
“The concentration of power in the hands of one company is certainly problematic,” said Oren Teicher, CEO of the American Booksellers Association. “Amazon already has a major competitive advantage over brick-and-mortar stores, thanks to its ability to avoid charging sales tax in most states. This latest deal just adds to the company’s advantages over independent booksellers.”
The Office of Fair Trading expects to announce its ruling on the acquisition by the end of August. If the committee determines the deal warrants further investigation, it will refer the matter to the U.K. Competition Commission.
Read more: http://www.portfolio.com/business-news/2011/07/05/amazon-snatches-up-british-rival#ixzz1RLmOq6cO