The UK Scraps Its 20-Percent VAT on Digital Books

From Publishing Perspectives:

In the kind of major turnabout that publishing professionals normally can only dream about, Her Majesty’s Treasury in the United Kingdom has issued a statement today (April 30), announcing that as of tomorrow—May 1—the UK’s long-derided value added tax (VAT) on digital publications will be gone.

. . . .

Understandably upbeat, the Publishers Association’s CEO Stephen Lotinga says, “We’re delighted that the government has taken this step to significantly fast-track the plans to scrap VAT on ebooks and journals.

“This is a boost to readers, authors and publishers, especially important at this difficult time,” he says. “We hope that it will enable many more people to easily access and benefit from the comfort, entertainment and knowledge that books provide.”

Until now, the UK’s publishing industry has labored under a 20-percent tax on digital publications, while the print rate had been zeroed.

. . . .

Logic seems to have fallen on the chancellor of the exchequer, Rishi Sunak, who “said the zero rate of VAT will now apply to all e-publications from tomorrow (May 1)—seven months ahead of schedule—potentially slashing the cost of a £12 ebook by £2 and e-newspapers subscriptions by up to £25 a year.” That’s a saving of US$2.52 on a $15 book, and as much as $31 coming off the price of a digital newspaper subscription, by the government’s calculations.

. . . .

“We want to make it as easy as possible for people across the UK to get hold of the books they want whilst they’re staying at home and saving lives. That is why we have fast tracked plans to scrap VAT on all e-publications, which will make it cheaper for publishers to sell their books, magazines and newspapers.”

. . . .

  • The Financial Times has reported that nearly 40 percent of adults surveyed in the UK have said that reading was helping them cope while they stay at home.
  • The Reading Agency released a survey—here written up by our colleague Alison Flood at The Guardian–showing that one in three adults is reading more since the lockdown was announced on March 23.

Link to the rest at Publishing Perspectives

Kickstarter Calls Itself Progressive. But About That Union.

From The New York Times:

Kickstarter, the Brooklyn-based crowdfunding site, has long tried to stand apart from Silicon Valley, seeking to portray itself as a socially responsible enterprise that cares more about improving the world than putting money in wealthy shareholders’ pockets.

Then came the union drive.

Earlier this year, a group of Kickstarter employees publicly pressed to form a union, calling for a larger say in the company’s operations. They were spurred to action after controversy over a Kickstarter campaign for a satirical comic book filled with images of people punching Nazis.

Kickstarter pushed back against the union, and as the effort dragged on, two of the organizers were dismissed last month in what they say was retaliation.

Kickstarter maintains it is not anti-labor, and has repeatedly said the firings had nothing to do with the union drive. It said the two workers were let go because of performance issues unrelated to their union organizing.

. . . .

But the firings provoked an outcry from political progressives that echoed across social media and stoked an emotional response from hundreds of the same creators who had been foundational to the site’s success, as well as high-profile supporters like the author Neil Gaiman, the cartoonist Matt Bors and the actor David Cross.

“People should partner with companies that align with their values,” said Nathan J. Robinson, editor of Current Affairs, a left-wing magazine that launched after a Kickstarter campaign in 2015. “When a company is union-busting, there is a very good reason not to give them a percentage of your money.”

Mr. Robinson has been an outspoken voice against Kickstarter. His magazine was in the middle of a second Kickstarter campaign when the controversy erupted, causing his pro-union donors to consider rescinding their contributions.

. . . .

“I have felt extremely conflicted, and at times deeply hypocritical,” said Steve O’Gorman, 33, a game developer from England raising money for an independent video game about unionization.

“The money from the Kickstarter is make-or-break,” he added.

. . . .

Labor organizers and tech industry observers are watching carefully: Will the workers be among the first white-collar employees at a major tech company to unionize?

. . . .

From the time the unionization effort became public in March, it was contentious within the company. Days after organizers announced their intent to unionize, three nonmanagerial employees sent an email to the entire staff voicing dissent. Organizers say that a majority of eligible employees now support unionization.

. . . .

In its charter, Kickstarter seemed to encode progressive values into the company’s DNA, promising to engage with larger social issues, including workplace inequality.

The Kickstarter organizers, who are working with the Office and Professional Employees International Union, said they want to ensure the company maintains that commitment.

“A lot of Silicon Valley places will tell you, ‘Oh, we’re changing the world,’” said Taylor Moore, the other organizer fired in September. “At Kickstarter, you can see the people’s lives you’re changing, the people who are helping change the culture.”

The organizers have called for greater transparency in decision making, diversity and pay equity. They have also demanded stronger protections for employees who disagree with management or who file complaints.

. . . .

“The union framework is inherently adversarial,” [Kickstarter President Aziz] Hasan wrote. “That dynamic doesn’t reflect who we are as a company, how we interact, how we make decisions, or where we need to go.”

Link to the rest at The New York Times

Europe’s antitrust chief uses U.S. visit to explain Amazon probe

From MarketWatch:

The head of the European Commission’s antitrust authority used a visit to the U.S. to describe in greater detail the latest American tech titan that’s the subject of possible action, Amazon.

As European Union Commissioner for Competition, Margrethe Vestager has had a lot of influence on U.S. technology companies like Google  which was fined $5 billion for violating EU antitrust rules, and Apple, which was ordered to repay over $15 billion to Ireland.

Now she has her eyes on another American company: Amazon.

. . . .

The EU’s investigation into Amazon which was announced last week was flagged as a company that may be in violation of EU antitrust law through an e-commerce sector inquiry Vestager’s commision conducted over the summer.

“We found that there are price maintenance issues where businesses not only give you a recommended price, but they also police that you actually take this recommended price,” Vestager said at a press conference held in Washington D.C. on Thursday.

When it comes to Amazon, she added that there is also a concern centered around how the platform utilizes consumer spending behavior data from the “little guys”, or third-party sellers that sell goods their goods on Amazon. “Since you have thousands and thousands of little guys you get quite a big horizontal picture of what’s going on in the marketplace,” she said, “and that is giving the big guy an advantage that cannot be matched because you have this special access to data.”

. . . .

On her visit to Washington, Vestager also met with Makan Delrahim, the assistant attorney general for the antitrust division, and Joe Simons, chairman of the Federal Trade Commission. “It’s been a very long time since we have had this sort of formal meeting,” Vestager said, “but it was a good way to sort of make a point of information and then of course cooperation will continue.”

“This is about her getting ready for her next job in the EU and it shows she can play a bigger role in the U.S.,” said Roslyn Layton, a visiting scholar at the American Enterprise Institute in Washington, D.C.

Unlike the United States, Layton said that Europe has still not fully recovered from the financial crisis in 2008. “Many people say, ‘Why not make better policy to help growth?’ Well, those things are hard and it doesn’t sound consumer friendly so it is much easier to say let’s go after the big U.S. companies.”

In addition to Amazon, given that the majority of technology companies Vestager has investigated are from the United States, many question whether she intends to use European antitrust policy to weaken U.S. companies to benefit smaller European ones. Be it in the United States or the EU, the goal of any antitrust policy should be to leave consumers better off, said Guido Lobrano, senior director of global policy at Information Technology Industry Council. “It is a reality that tech companies and large groups have originated in the United States because it is favorable to innovation which is not quite the case in Europe,” he said.

Link to the rest at MarketWatch

If PG were in a business and his competitors were selling on Amazon, in addition to watching online pricing and the Sales Rank of his competitors (probably with some technology that automated the process), he would be using this information to inform his own pricing strategies and, where appropriate, to hammer on his suppliers for lower prices.

If a competitor were selling a product below cost, PG might use the opportunity to restock his inventory.

It’s much, much easier to monitor competitor pricing/promotion activities on an ecommerce platform than it is if a competitor is selling through 500 individual physical stores. It costs money to track in-store competitor activities in meatspace (there are companies who will do this for a fee) and generating a physical retail version of Amazon Sales Rank and tracking it over time would be very expensive.