OFT probes Amazon deal to buy rival

 
Steve Dinneen
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THE Office of Fair Trading has launched an enquiry into Amazon’s acquisition of one of its biggest UK rivals The Book Depository.

The watchdog will now decide whether the merger could be detrimental to competition.

Amazon and The Book Depository make up two of the top three online retailers in the UK, with Play.com in third.

Smaller retailers have already expressed concern about the acquisition, which they say could heap pressure on the already struggling book sales industry.

There are also concerns the deal could threaten offers such as Amazon’s free postage.

An OFT spokesman said: “If we think that there is a prospect of substantial lessening of competition as a result of the merger, we may refer the case to the Competition Commission.”

Submissions will close on 18 July and the watchdog says it expects to make a decision on whether to notify the Competition Commission by 30 August.

Book Depository founder Andrew Crawford said the firm “looks forward to continuing our growth and providing an ever-improving service for readers globally” with support from Amazon.

Analysts said Amazon may be interested in nudging The Book Depository’s growing army of customers towards its high-margin e-book business.

The Amazon deal, which was for an undisclosed sum, comes six months after the US giant bought LoveFilm, and is another sign that the online giant is keen to grow through acquisitions.

The Book Depository made a profit of £1.6m on revenues of £69m in 2010, according to accounts filed with Companies House. In 2009, profits were higher at £1.9m on lower revenues of £61m.