Geographic Fragmentation in the EU Market for e-Books: The case of Amazon

This study documents cross-border availability and accessibility of e-books and print books in the EU Amazon stores. Amazon is by far the largest operator in the EU e-books market with a market share between 40 and 70 per cent. E-books are about 60 per cent cheaper than paperbacks. Direct access to Amazon's six e-book stores in the EU is restricted to 10 EU Member States. However, because book catalogues are largely overlapping between stores, and because all EU28 have access to the Amazon US store that contains most of the Top-100 e-books in EU stores, overall availability of e-books on Amazon is very high in the EU, around 93-95%. Consumers in the EU10 may find significant opportunities for price arbitrage in the Top-100 e-books between Amazon’s EU and US stores. Consumers in the remaining EU18 have no other option than to buy from the US store. E-book prices excluding VAT are negatively correlated with VAT rates as Amazon seems to align prices across countries in order to avoid price arbitrage. Print books versions of e-books can in principle be bought from any store and are therefore widely available and accessible. Moreover, any price arbitrage in print books is limited by transport costs. We conclude that the Amazon e-book stores offer a high degree of cross-border availability of titles but use geographical access restrictions for the purpose of price dispersion. Lifting the digital access walls between Amazon e-book stores would only have a very small impact on consumer welfare through increased product variety. We cannot estimate how it would affect consumer welfare through the price channel however.

Authors:

BATIKAS Michail, GOMEZ HERRERA Maria Estrella, MARTENS Bertin