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Amazon Overcharging Publishers For Tax
00_NOP writes "Amazon is taking fire in the UK for insisting that publishers pay them for 20% VAT (sales tax) when in fact the online retailer is only paying 3% VAT. 'The firm is able to wield such power over publishers because it has a near monopoly of the UK digital book publishing market. According to reliable estimates, it sells nine out of 10 ebooks in the UK, while using its Luxembourg tax status to wring more profitable terms from publishers. ... In private, British authors and publishers express fears that Amazon's dominance will send the industry into further decline.' Given that the Kindle is rubbish at displaying maths and science and that Amazon is as dangerous a monopoly as Microsoft ever was, is it not time that regulators and consumers stood up to them?"
Amazon is also facing criticism right now for allegedly shutting down a woman's account and remotely wiping her Kindle, then refusing to provide information about why it did so.
Overcharging, potentially illegal actions? Pfft, who cares.
Whats that, you say its bad at displaying maths and science? Someone get the firing squad.
Seriously, what on earth do its shortcomings have to do with whether the government needs to take action?
What does the kindle's failure to display math and science symbols correctly have to do with Amazon potentially being a monopoly?
Publishers insisting on DRM, engaging in infighting, and pushing multiple incompatible standards have given Amazon a device monopoly just like music publishers gave Apple. It's stupidity because they had five years to see what was coming. It's publishers monopolistic greed that enabled Amazon's position, and Jeff Bezos is laughing all the way to the bank.
* http://www.defectivebydesign.org/amazon-kindle-swindle
* http://www.gnu.org/philosophy/the-danger-of-ebooks.html
The better question is why are ebooks subjected to VAT in the first place when printed books are not.
http://www.thebookseller.com/news/uk-government-holds-firm-e-book-vat.html
in a written response reiterated the government's position "Under EU law, VAT on electronic books must be charged at the standard rate. A reduced rate cannot be applied to digital or electronic supplies, or supplies of text via the internet, as they are classed as supplies of services rather than physical goods. There is therefore no scope in the principal VAT directive to apply a reduced rate on e-books."
"Amazon is also facing criticism right now for allegedly shutting down a woman's account and remotely wiping her Kindle, then refusing to provide information about why it did so."
This is the exact reason why I strip the DRM from every Kindle book I buy and then store them in my own offline repository. Should Amazon ever decide to wipe my account I'll still have the books I purchased. The other advantage is I can use any e-reader I want w/o being locked to a Kindle.
What I want to know is where the http://pixelqi.com/ guys are hiding... They had a workable device, shipping in nontrivial volume with the OLPC XO-1, and then seemingly dropped off the map.
All the refresh rate of an LCD panel(because it is one); but, in transreflective mode, looks more like e-ink than any LCD I've ever seen and has the option to do color if you crank the backlight....
We know(because all but the nastiest LCD tablets running Android or iOS can and do do it) that contemporary low-power ARM chipsets are up to the challenge of crunching PDFs; but e-ink displays are mostly too small to display 8.5x11 or A4 pages, too slow for panning/zooming/etc, and PDF reflow is crap. If they would just start existing, the Pixel Qi screens would fairly efficiently solve this problem, at lower cost and lower power than standard LCD panels; but nobody seems to have heard a peep from them.
Surely this is merely a matter of tax laws that lawyers and judges are perfectly well equiped to solve?
If Amazon is a Luxembourg company, than this should be no different from any other Luxembourg company buying and selling products outside Luxembourg borders. Europe has tax laws in place regarding intra-community trade; neither Amazon nor the publisher's opinions matter.
The summary, once again, is not very clear. In fact the Guardian article isn't 100% clear either, but what appears to be the case is that for a product with an intended retail price of £10 in the UK where VAT is 20%, the base UK price would be £10 / (120%) = £8.33. Amazon allegedly insists on negotiating with UK publishers starting with a base price of £8.33. However, in Europe, Amazon is a Luxembourg company and the VAT rate there is 3% for these products. The base price for a retail price of £10 would be £10 / (103%) = £9.71.
I don't think it is really the case that Amazon is "charging them VAT" so tax law doesn't really matter - it would be more accurate to say that they are allegedly insisting on at least an extra 17% discount, and hoping that the publishers don't notice that this is not in fact part of the VAT adjustment. Or alternatively, Amazon is accused of keeping all the tax savings it makes by setting up in the EU's lowest VAT area, Luxembourg, and not sharing them with the publishers.
So if this story is true as stated, and she has bought lots of e-books from Amazon, will Amazon refund her all the money she's spent on them? Or does Amazon just 'absorb' that $$$? I'd sue Amazon for actual damages, court and lawyer fees and damages. I can see the future of e-commerce, and this a bad trend starting here.
Having been totally baffled by the summery. Which is incredibly confusing. Nothing has changed, VAT works like it always does the final customer pays it ALL thats the books buyer paying 20% http://www.amazon.co.uk/gp/help/customer/display.html?nodeId=502578.
This is purely about dodgy maths. Amazon make deals on percentage of Gross Price with the publishers the UK full retail price of the book [net price+20%vat], not on the net price + [Vat in Luxenbourg] 3%. where publishers would get a slightly larger piece of pie . Neither Amazon or the Publishers pay a penny in tax so I fail to see why this is an issue. A better argument would be to standardise of Amazon taking a percentage of the net price as opposed to gross price, but all this should not matter, its really whatever they have negotiated between themselves.
This is a ridiculous Anti-Amazon article, I suspect to distract from the disgusting behaviour that Apple and 5 Publishers are involved in
Never attribute to malice that which can be adequately explained by stupidity
I have heard this saying before. But I have never understood why I should consider it to be correct. Don't the malicious often feign ignorance?
"What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)
Never attribute to malice that which can be adequately explained by stupidity
I have heard this saying before. But I have never understood why I should consider it to be correct.
It shouldn't be considered correct. This saying is promulgated by malicious people in a conspiracy to conceal their actions. There is no way that common acceptance of such a broad generalization could be explained by mere stupidity.
...You do realize that PDF is meant for printing. The P in the acronym kinda gives it away....
So, the 'P' in PDF, which stands for 'Portable Document Format', is supposed to remind us, somehow, of printing?
Does the 'G' in Gif somehow remind us of giraffes?
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cheers,
"If it's a choice between paving the way for tyranny and risking the loss of your digital life at the press of a button by some deceived customer service rep, and having to remember a password, I think the password is the way to go. The former works better, but the latter fails better. A note to anyone from Amazon PR contemplating sending me a comment regarding this: I expect that any comment from Amazon regarding this story will disclose whether and when Amazon can delete files (including files loaded by users) from Kindles, and whether DRM-free files can still be deleted. Also: as a policy, I do not quote anonymous spokespeople for firms unless they are telling me something that could cost them their jobs."