The European Commission today opened an investigation into Amazon’s e-book business and is examining the company’s deals with publishers that are said to limit competition and reduce consumer choice.
Under the spotlight are contracts that require publishers to tell Amazon if there are any better terms on offer which enables Amazon to offer conditions as good as or better than those offered by its competitors.
By compelling publishers to share this sensitive information, Amazon may be restricting competition and putting consumers at a disadvantage.
If the EC is right, Amazon will have been engaging in restrictive business practices.
Competition Commissioner Margrethe Vestager commented, “Amazon has developed a successful business that offers consumers a comprehensive service, including for e-books.
“Our investigation does not call that into question. However, it is my duty to make sure that Amazon’s arrangements with publishers are not harmful to consumers, by preventing other e-book distributors from innovating and competing effectively with Amazon.”
A spokesperson for Amazon said the company “is confident that its agreements with publishers are legal and in the best interests of readers.”
The Commmison’s statement reads:
'e-books have experienced a surge in popularity in recent years and are of increasing importance to online retail.
Amazon is currently the largest distributor of e-books in Europe. Initially, the Commission's investigation will focus on the largest markets for e-books in the European Economic Area, namely e-books in English and German.
The Commission has concerns that certain clauses included in Amazon's contracts with publishers concerning such e-books could constitute a breach of EU antitrust rules that prohibit the abuse of a dominant market position and restrictive business practices. In particular, the investigation is focused on clauses which seem to shield Amazon from competition from other e-book distributors, such as clauses granting it:
• the right to be informed of more favourable or alternative terms offered to its competitors; and/or
• the right to terms and conditions at least as good as those offered to its competitors.
The Commission will now investigate further whether such clauses may hinder the level playing field and potentially decrease competition between different e-book distributors to the detriment of consumers.'
