Best 'value for money' spent – does this mean
better choices or do they only want to save money – which is
important – but do they look at long term benefits in terms
of getting quality and improvement while comparing product
What do Retailers or producers offer?
The best choice in terms of quality and price. They want to sell
and create a brand image so that they create a customer base which
comes back to them. Its not always pure price competition. For
instance, even indian & chinese smartphone makers like Micromax
and Oneplus care about quality – they are buying Patents to
be in tune with cutting edge technology even as they sell low price
What do the marketplaces have to offer?
They seem to be in the monopoly game. Last decade, Amazon Vs.
Hachette set up the first example in the online marketplace.
In 2009, when Amazon accounted for as much as 90 percent of the
U.S. e-book market. At the time, Amazon was selling the most
popular e-books for less than $10 which was below its buying price
of about $13.
The publishers anticipated that Amazon would eventually pressure
them to lower their wholesale prices to undercut competitors,
So, the 5 major publishing houses came up with a plan that would
have given them more negotiating power —they agreed with
Apple on an "agency model" that would let them set retail
prices and give Apple, or any other seller, a percentage. That
would have sustained them, encouraged competition on the e-books
platform without killing the offline retail business — to the
benefit of publishers, other technology companies, and, ultimately,
The plan backfired: The U.S. government filed an anti-trust case
against Apple and the publishers for conspiring to restrain
competition. (The five publishers settled the case; the court ruled
against Apple, which has appealed.) But although the publishers may
have violated the law, the case ended up helping Amazon dominate
the book market.
Why did an anti-trust case help give Amazon the kind of market
power that anti-trust law is designed to prevent?. There is a
difference in approach of the US and EU Competition
Amazon's price parity clause had been unpopular right from
its introduction in Europe in 2010. Amazon had argued that it was
essential if its customers were to feel confident that they
weren't missing out on cheaper prices elsewhere, but
Marketplace traders—who number a staggering two million
around the world—felt it was restrictive.
In contrast to the US position – Their case was picked up
by regulatory bodies, first in Germany and then in the UK, where
the Office of Fair Trading started an inquiry into whether the
clause was anti-competitive. It is likely that with the
investigations closing in, Amazon saw the writing on the wall and
pulled its clause voluntarily, and before it was forced to do
The outcome is a relief for Marketplace sellers like small
traders and other online retailers, who will now be free to price
as they like on Amazon, their own websites and anywhere else. One
of those is FirstyFish, Firsty's eBookstore for publishers and
that offers lots of flexibility in selling to consumers.
Publishers might also be encouraged to sell their print and
digital content direct to consumers on more competitive terms. They
may not be inclined to offer prices as low as Amazon's, but
they will be emboldened to go cheaper in their D2C operations.
Publishers are getting better and better at establishing their own
online communities and engaging with them, and their sales through
their own websites and affiliated ones should continue to rise.
The debate about pricing, the rights and wrongs of wholesale and
agency models and the e-book price collusion cases brought against
Apple and publishers in Europe and the US certainly help us draw
some conclusions from these sagas –
Competition Authorities will not
allow giants to simply dictate their own terms – whichever
model they may use as a garb to sell in the market.
Another is that smaller retailers
of books and eBooks have got a bit of protection and power back,
even if they want to be part of the dominant marketplaces success
in both book and eBooks retail.
As PM Modi's democracy goes soul searching for its
braoder and sustainable economic model, a pro-comeptitive culture
needs a peep. Looking into this politics of size – what it
means for our economy?
Will elaborate on this next.
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The Legal Metrology Act, 2009 was passed by the Indian Parliament in order to repeal and replace The Standards of Weights and Measures Act, 1976 and the Standards of Weights and Measures (Enforcement) Act, 1985.
In the wake of liberalization and privatization that was triggered in India in early nineties, a realization gathered momentum that the existing Monopolistic and Restrictive Trade Practices Act, 1969 was not equipped adequately enough to tackle the competition aspect of the Indian economy.
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