The European Commission has opened a formal antitrust investigation into Amazon’s business practices around e-book distribution and sales. The Commission will in particular investigate certain clauses included in Amazon’s contracts with publishers that require publishers to inform Amazon about more favorable or alternative terms offered to competitors.
Allegedly, should Amazon find out about better deals with other companies, Amazon demands similar terms and conditions than to its competitors, or through other means such as discontinuing sales, ensure that Amazon is offered terms at least as good as those for its competitors.
The Commission has concerns that such clauses may make it more difficult for other e-book distributors to compete with Amazon by developing new products and services, or make forging partnerships with other companies impossible. The Commission will investigate whether such clauses may limit competition between different e-book distributors and may reduce choice for consumers. If confirmed, Amazon would be in violation of EU antitrust rules that prohibit abuses of a dominant market position and restrictive business practices.
The investigation is in its early phases, and is similar to the one famously launched in December of 2011 against Apple and five international publishers alleging price fixing. Articles 101 and 102 of the Treaty on the Functioning of the European Union prohibit respectively anticompetitive agreements and the abuse of dominant market positions — these are the same articles that were called out in the anti-trust agency’s investigation.
The Commission has informed Amazon and the competition authorities of the Member States that it has opened proceedings in this case. There is no legal deadline to complete inquiries into anti-competitive conduct — so this proceeding is likely to take years.
