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11th Dec 2017

Focus

EU compels Amazon to change 'unfair' e-book contracts

  • Amazon can no longer tell publishers of e-books that they have to inform Amazon if a competing e-book seller offers a better deal (Photo: James Tarbotton)

The European Commission has convinced the online retailer, Amazon, to change the terms of its contracts with e-book publishers to prevent unfair competition.

The EU's executive body and Amazon announced on Thursday (4 May) that the two sides had reached an agreement.

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  • The European Commission was worried the contract contained clauses that break EU law (Photo: Helloquence)

Amazon, which also offers paper books, is the largest seller of e-books in Europe.

The EU opened up a probe into Amazon's e-book distribution contracts in June 2015.

The controversy was about clauses Amazon had included in its contracts with the publishers of e-books.

The commission feared that the company could be breaking EU anti-trust rules, which help to prevent big companies from engaging in unfair competition.

In the contractual terms, e-book publishers had to agree to inform Amazon when a competing e-book distributor had offered a better deal.

Another standard clause in Amazon's e-book contracts gave the company the right to terms and conditions at least as good as those offered to its competitors.

Under the agreement announced on Thursday, Amazon will no longer include those clauses in new contracts, and promised not to enforce them in old contracts that had already been signed.

If Amazon breaks one of its promises over the next five years, the commission could automatically impose a fine on Amazon of up to 10 percent of its total annual turnover.

The EU commission said that Amazon's promises offer “a timely, effective and comprehensive solution to the [commission's] competition concerns”, and will “contribute to fair competition”.

“They will help ensure that innovation for e-books by publishers and other third parties can benefit companies other than Amazon and protect effective competition for e-books to the benefit of consumers,” the EU commission said about the commitments in a press release.

Amazon also released a short statement, saying the company is “pleased” to have reached a deal.

The case is unrelated to another EU investigation involving Amazon.

In 2014, the commission opened a probe into the company's tax arrangements with Luxembourg. However, that case is still ongoing.

EU probes Amazon's e-book contracts

The European Commission is concerned that some clauses in Amazon's contracts with book publishers hinder competition.

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