Why the rise of the unstoppable Amazon juggernaut is worrying its rivals

By Steve Hawkes - The Telegraph - June 28th, 2013

( Photo: NTI Media Ltd/Rex Features)

Amazon is offering to transform every CD purchase customers have made with them into a new digital, downloadable file of the same album. Buy a CD, get an MP3 for free. With the launch of its new "AutoRip" service in the UK, Amazon shows why millions of shoppers love them and why its rivals are furious with them.

Amazon's new service is a direct attempt to lure business away from Apple's iTunes. Anyone ordering a CD can now have the digital file sent straight to a cloud player while they wait for the postman.
While the power struggle with Apple is fascinating, the side effects on UK high street stores could be brutal. And it will pose yet more questions about what policymakers can do to help.

Ever since John Lewis, the self-styled doyen of fair play, complained about Amazon's tax "dodging" last autumn, the web giant has been in the eye of a storm.
The complaint Amazon's high street rivals have is that AutoRip is yet another example of why Amazon's low tax bill is a problem.
With the margins in electrical retailing wafer thin, saving on tax gives Amazon precious wriggle room and a huge competitive advantage.

The US giant already escapes the onerous business rate levy hitting high street stores.
The problem for the critics is that Britain's youth place Amazon above almost every brand in the country. "Generation Y", attached at all times to their smartphones and tablets, adore Amazon.

There is bound to be catch with AutoRip, be it fees for using Cloud Player in the future, or higher prices for physical CDs. Amazon's pledge that it simply wants to help customers is, simply, unbelievable.
Yet the web giant's service will no doubt be successful, meaning it's taken another huge step in a ruthless expansion drive that's sending shudders through Britain's best known stores.
Just watch for the sparks to fly when Amazon eventually decides to move into food.