The European Commission has opened a formal investigation into Amazon’s ebook distribution practices. Initially, the EC’s investigation will focus on the largest markets for ebooks in the European Economic Area, namely ebooks in English and German. Amazon remains the largest distributor of ebooks in Europe.
Specifically, the EC said today it intends to investigate certain clauses contained in Amazon’s contracts with publishers that it says appear to shield the business from competition by requiring Amazon is given —
- 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 EC’s concern is these clauses are stifling competition in the sector and reducing choice for consumers. If it confirms a finding that Amazon’s contracts are limiting competition the EC notes that could constitute a violation of EU antitrust rules. Although at this point it’s just opening the investigation — so no judgement has been made yet.
Commenting on the action in a statement, EU competition commissioner Margrethe Vestager said: “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. Our investigation will show if such concerns are justified.”
In a statement provided to TechCrunch, an Amazon spokesperson added: “Amazon is confident that our agreements with publishers are legal and in the best interests of readers. We look forward to demonstrating this to the Commission as we cooperate fully during this process.”
There’s no set timeframe for EC antitrust investigations — with the complexity of the case and how co-operative (or otherwise) those being investigated are determining how long proceedings last.
It’s not the first ebooks-related investigation the Commission has opened. In 2011 it looked into the ebook retail pricing set by Apple and five international publishing houses (Penguin Random House, Hachette Livres, Simon & Schuster, HarperCollins and Georg von Holtzbrinck Verlagsgruppe), with concerns the group were colluding to fix pricing. This led to the companies making changes, in December 2012 and July 2013, which addressed the Commission’s concerns.
Vestager is currently also investigating Google on antitrust grounds, stepping up action in a long-running investigation into Google’s price comparison service, Google Shopping, by launching a formal Statement of Objections this April.