There is a price-war going on between the online retailers; Amazon.com, Wal-Mart, Target and the American Booksellers Association (ASA) who defends the independent bookstores. The 3 retailers are selling bestsellers like Stephan King’s “Under the Dome” for really low prices. The ASA will do everything to protect the independent bookstores against this ‘predatory behaviour’. They have already called for an investigation for these anti-competition acts. According to the ASA, the real reason why these online retailers offering books for low prices is because they want to attract new customers so that they will buy additional sales. The ASA say that Amazon.com, Wal-Mart and Target have a secret plot to eliminate competition. They want to have the control of the market for bestsellers. Those acts are devaluing the concept of the book and the book industry will become a danger of collateral damage in this war. That is often be said when more efficient or productive competitors challenge them in the marktplace. But like in all other industries, innovation and technology change the way of selling and buying books en there always will be winners but also losers.
The online retailers brought a chance in the industry but also increased the appetite for books. Even in the middle of the financial crisis more books have been bought. ASA counters it.
The ASA say that the can not compete because of the price advantage Amazon.com and co have but they can offer other advantages like attentive and knowledgeable service, a reader- and- author- friendly atmosphere,…
Instead of painting them as helpless victims they would better release that. Prices are important but also other things like these other advantages can be important for some people.
In the article they said that the independent book stores can offer other advantages than the price advantage that online retailers can bring. In the text you can read: ‘Prices are important but they aren’t all-important. I think that the price advantage will be the most important advantage and the only advantage for many people that they will take into account especially people who do not read much. Only a small group of book lovers will not buy their book online because of the other advantages and perhaps also on principle.
The online retailers even loose money by offering books for these low prices and it is not right that behind the strategy of it the only goal they have is that new customers would buy more. They are creating a monopoly and that is not good for the competition.
JACOBY, J.( October 28, 2009 ), Latest battle in book price wars. Retrieved from http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/10/28/latest_battle_in_book_price_wars/
vrijdag 6 november 2009
maandag 2 november 2009
Recruitment firms fined for boycotting rival (By Bieke Demeester)
The Office of Fair Trading (OFT) in the United Kingdom, announced at the end of September, that six companies breached the competition law.
The Office said that these six companies, which are recruitment companies, formed a cartel and refused to deal with the new rival ‘Parc UK’. They got a fine of £39 million in total for this serious breach of competition law. The new firm ‘Park UK’ wanted to act as an intermediary between recruitment companies and constrution firms. The six recruitment companies didn’t compete fairly: they formed a cartel, named the ‘Construction Recruitment Forum’. The OFT confirmed that between 2004 and 2006, this forum agreed to boycott ‘Park’. Therefor, they agreed upon fixed fee rates, which the intermediary firms (such as Park) would have to pay. This distorted competition and drived up staff costs, a director of the OFT said.
The company which got the greatest fine, was considering an appeal, although they admitted the charge. They said there was only one guilty employee and they already fired him. On the day of the judgment, the shares of this particular company fell be 3,5%.
Remarkable is that the Office of Fair Trading gives high fines. The construction industry in the UK had to pay in September a fine of £130 million for illegal price-fixing.
I think the OFT is necessary to investigate breaches of competition law, because consumers are always the dupe. Some companies are sentenced, but I think a lot of companies aren’t discovered yet. Although is it verbidden to breach competition law, this article shows that some companies don’t care about it and just want to raise their benefits. In Belgium, there is a similar council which has to investigate breaches on competition regulations.
Sources:
WEARDEN, G. (September 30, 2009). Recruitment firms fined boycotting rival. Retrieved from http://www.guardian.co.uk/business/2009/sep/30/oft-fines-recruitment-firms
The Office said that these six companies, which are recruitment companies, formed a cartel and refused to deal with the new rival ‘Parc UK’. They got a fine of £39 million in total for this serious breach of competition law. The new firm ‘Park UK’ wanted to act as an intermediary between recruitment companies and constrution firms. The six recruitment companies didn’t compete fairly: they formed a cartel, named the ‘Construction Recruitment Forum’. The OFT confirmed that between 2004 and 2006, this forum agreed to boycott ‘Park’. Therefor, they agreed upon fixed fee rates, which the intermediary firms (such as Park) would have to pay. This distorted competition and drived up staff costs, a director of the OFT said.
The company which got the greatest fine, was considering an appeal, although they admitted the charge. They said there was only one guilty employee and they already fired him. On the day of the judgment, the shares of this particular company fell be 3,5%.
Remarkable is that the Office of Fair Trading gives high fines. The construction industry in the UK had to pay in September a fine of £130 million for illegal price-fixing.
I think the OFT is necessary to investigate breaches of competition law, because consumers are always the dupe. Some companies are sentenced, but I think a lot of companies aren’t discovered yet. Although is it verbidden to breach competition law, this article shows that some companies don’t care about it and just want to raise their benefits. In Belgium, there is a similar council which has to investigate breaches on competition regulations.
Sources:
WEARDEN, G. (September 30, 2009). Recruitment firms fined boycotting rival. Retrieved from http://www.guardian.co.uk/business/2009/sep/30/oft-fines-recruitment-firms
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