Amazon Launches in Canada Amid Bookseller Protests

After months of speculation, Amazon.com launched Amazon.ca (www.Amazon.ca) June 25, offering Canadians the opportunity to buy books and music in Canadian dollars with local shipping by Canada Post. "Amazon.ca provides great savings and convenience to Canadian customers and allows us to source products from Canadian publishers and distributors and work with them to increase online sales of their merchandise," said Jeff Bezos, Amazon.com's CEO. "Amazon will not only serve Canadians, but will also export Canadian products all over the world, increasing the visibility and reach of Canadian writers and artists."

Amazon has hired Assured Logistics, a part of the Canada Post group of companies, to handle fulfillment. Amazon.ca will operate as a subsidiary of the U.S. parent and will have no physical presence in Canada, in order to comply with Canadian cultural investment laws, which require that a bookseller be majority Canadian-owned.

"We've been very open with the Heritage Department, and the way this is organized is not only in strict compliance with the Heritage Act but also in the spirit of what's trying to be accomplished, which is to promote Canadian publishers and authors," Bezos said at a news conference in Toronto. However, the day after the launch, the Heritage Department announced that it is "actively examining whether or not the Investment Canada Act applies to Amazon's venture."

The decision came after strong protests about the site from the Canadian Booksellers Association and Indigo Books and Music. The two organizations issued a joint statement accusing Ottawa of flouting its policy in dealing with Amazon.com. "We are surprised and disappointed to learn that the Canadian government has been silent about Amazon. com entering the Canadian book market in what appears to be a direct contravention of its own longstanding book policy," they said, explaining that Canadians must control any company engaged in the distribution, publishing or retailing of books in Canada. The same policy kept Borders from opening in Canada in a partnership with Canadian interests, they stated.

"Now is not the time for a double standard to be applied in the Canadian book industry. We have been hard at work with the industry, which has made very significant demands upon us," said Indigo president and CEO Heather Reisman.

"This Amazon.com deal scores a direct hit on independent Canadian booksellers who have been struggling through many years of upheaval and have just begun to show signs of prospering again. The government of Canada must not allow Amazon.com to drive a Mack truck through the Canadian book policy," said CBA president Todd Anderson.

Responding to the criticism, Bezos asked, "Is Indigo-Chapters, which controls some 70% of Canadian book retailing, really concerned about protecting Canadian culture? Or are they really just concerned that Amazon.ca offers 30% discounts on most books over C$30 and free shipping on orders over C$75?" Amazon.ca will offer Canadians more than 1.5 million books, CDs, DVDs and videos in English and French, with 30% off books over C$30 and introductory free shipping on orders over C$75.