Category Archives: financial crisis

Amazon.it Brought to Heel by Levi Law

Hon. Levi

While trying to research publication information on the Italian guidebook that profiled my home state, a visit to Amazon.it, which just opened this year, revealed the following warning:

Dear Customer,

It now seems certain that by September 1, a law on the price of books in Italian will come into effect. The main article states: “It shall be allowed that, on the sale of books to the end consumer, by whatever means or method, including mail order, even if such is brought about by electronic commerce, will have no discount to exceed 15 percent of the cover price.”  In compliance with this law, we will continue to offer great prices on our selection of millions of titles in foreign languages. Soon we will offer you the opportunity to choose from a catalog of hundreds of thousands of used books.

Please be assured that you will continue to find very low prices on Music , DVDs and Blu-ray ,Video Games , Electronics , Computers , Gardening and Garden , Home and Kitchen , shoes and bags , watches and many other categories in the future.

Thank you for your trust in Amazon and we reaffirm our commitment to continue to offer not only competitive prices and free shipping, but also the best buying experience.

The team at Amazon.it

PS Till August 31, we will be offering one last opportunity to purchase up your favorite books at prices never before offered. See, for the next few weeks, more than 235,000 books in Italian that we’re offering at a discount of at least 40% cover price.

The law in question is the Levi Law, named after the 52-year-old Democratic Party senator who also introduced a law to gag bloggers in 2007 (the “Levi-Prodi” law), which hasn’t passed yet. (Prodi, darling of the Anglo press for his liberalist views, gave his name to law by virtue of being Prime Minister when it was introduced.) According to Corriere della Sera, over 1000 people signed a petition against the law and sent the petition to Italian President Napolitano.

Back home, where Wal-Mart rules the roost, I miss my neighborhood book and music vendors. There is an argument for small stores and the specialization that they provide. Transactions can transcend mere consumerism and can be a learning experience and create community. Anyone who’s ever had a favorite book or record store knows this feeling. (I can cite Hawley-Cooke and ear X-tacy in Louisville and Normal’s in Baltimore as contributing heartily to my current ethos and worldview.) Italy’s small stores, when they provide this experience, are to be valued and appreciated. But at a time when Italy’s economy continues to stagnate, for the 40th-odd quarter in a row, with low growth that is the fault of too many small businesses and low international investment, this doesn’t seem like a particularly savvy move.

For whatever reason, Hon. Levi seems particularly harshly opposed to the internet as a means of facilitating communication and commerce in Italy. That he is a typical figure of the Italian left should help explain why Berlusconi has held reign for most of the past decade and a half.

But, Italy’s parliament’s slowness this time may be to the market’s advantage. As the iPhone and various tablets take over e-reading, the law may not have much effect.  Amazon has already signed an agreement with Mondadori to distribute ebooks, and Edigita, a consortium that includes RCS and Feltrinelli, will distribute 1000,000 books from 30 different publishing houses.

I wonder what Tim Parks, who spoke eloquently about the rising costs of publishing to the Foreign Press Association in Milan, might have to say about this.

**UPDATE**

The Washington Post reports that even in a weak economy, there still is a niche for small, independent booksellers:

The small, independently owned bookstore is staging a modest rebirth in the midst of a bone-killing economy and the exponential growth of online retailers and e-books.

I wish someone would tell Italian lawmakers that you can actually have Amazon and good, small bookstores too.

**

Update #2:

I don’t have a lot of sympathy for the closing of mega-stores like Borders. I’ll never forget being at the flagship Barnes & Noble store in Baltimore‘s Inner Harbor shopping district, watching a clerk tell a customer over and over again that Invisible Man was in the science fiction section. The customer stood his ground and said, “no, not H.G. Wells’ The Invisible Man — Ralph Ellison’s Invisible Man.” Assured by his computer monitor, the clerk told the customer that that book didn’t exist.  I’m sure that up in Washington Heights, Ellison did a series of half-gainers in his grave. And you shouldn’t have to guess the races of the characters in this story.

Raiding the Ratings Agencies

Infernal Affairs

The financial news has been so intense this week that I’ve all but given up on trying to blog it. Twitter‘s where you’ll find most of my comments on the tumult in Europe and the US.

Amid markets falling and politicians on both sides of the Atlantic flailing, one bit of rather shocking news did stand out: Standard and Poor’s Milan offices were raided on the orders of a prosecutor’s office in the small Pugliese town of Trani, ostensibly on the behalf of a consumer right’s group.There is little doubt that the raid was politically motivated.

After all, they picked a hell of a day to execute the warrant. The FTSE MIB, Milan’s main index, dropped 5.16% Thursday, and then a mysterious “technical glitch” prevented both the MIB and the all-share index from being released. The raid on the ratings agencies didn’t exactly take away from the conspiratorial edge. After Reuter’s excellent real-time reporting on the event Thursday, other sources have been quick to pick up on the implications. DC-based consultants Sidar Global Advisor predicts that:

There will be strong pressure on credit rating agencies, and the demand for transparency, and further regulation. After Italian police have raided the offices of S&P and Moody`s in Milan, there have been reports on the credit rating agencies` compliance with regulative issues.

True, but I should note that the ratings agencies are seen with extreme suspicion in Italy, as are currency speculators (despite the fact that most of them work to improve the holdings of pension, not hedge, funds). Thanks in part to a general lack of economic education in Italy, ratings agencies and currency traders are routinely blamed for all of Italy’s economic woes, when in fact it is loss of competitiveness, exports and a decade of almost zero growth that, when combined with Italy’s historically high debt-to-GDP ratio, creates a very unpleasant environment for investors. (Not to mention political incoherence/impotence and terrible bureaucracy.)

Simply put, all these factors far outweigh whatever infelicities the ratings agencies may have committed. The raiding of the Milan offices this week is widely seen as a political move designed to discredit the agencies to outside investors. Sowing distrust and confusion is, sadly, a time-tested way of doing politics and business in Italy. Ratings agencies can make mistakes, they too can be political, and they probably need better oversight — but not all of Italy’s problems can be laid at their doorstep and that of the speculators.