December 7, 2011

Amazon offers people $15 to walk out of bookstores


Congressman Wright Patman, author of the Robinson Patman Act

By the standards of the Robinson Patman Act — our key anti-trust law enacted in 1936 to prevent big business from predatory practices — seems to have been criminal to a historic degree. After all, if the basic description of predatory pricing doesn’t fit Amazon, who does it fit? (As Wikipedia nicely describes it, “predatory pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors.”) Of course, while anti-trust enforcement is the last thing to expect from the Wall Street-friendly Obama administration — or from anyone since the days of Ronald Reagan — Amazon’s latest announcement takes its standard of predation to a whole new level.

As Businessweek describes it in a report by Rachel King, Inc. wants shoppers to do a price check the next time they’re at the store.

The world’s largest online retailer is offering a 5 percent discount to entice users to try its new mobile app that compares their prices with brick-and-mortar retailers.

How does it work? The app, called Price Check, allows shoppers to look up Amazon’s prices by scanning physical products at a store using their phones. Customers will get the discount, as much as $5 off, on three qualifying products on Dec. 10, the Seattle-based company said today in a statement.

Notably, as a report at All Things D by Tricia Duryea adds, the scanner promotion (see our earlier report about the scanner app) will also “serve as a way for Amazon to increase usage of its bar-code-scanning application, while also collecting intelligence on prices in the stores.”

This, just after we report upon a survey about “show rooming,” the practice of using bookstores to examine books that are subsequently bought online. Of course, that MobyLives report found it interesting to observe that the survey in question meant brick-and-mortar bookstores were a crucial part of almost 40 percent of Amazon’s sales. We asked then what it would mean to Amazon shoppers, then, if those stores went out of business.

We ask it again, in light of a promotion that clearly means to hasten that …

But meanwhile, surely paying people $15 to walk out of bookstores — after collecting surveillance data — is even more in violation of Federal anti-predation laws than anything Amazon has ever done. And while we can expect a reaction from the FTC is to be as unlikely as ever, what about reaction from the rest of the book business?

What do you say?


Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House. Follow him on Twitter at @mobylives