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18th Nov 2018

EU probes Amazon's e-book contracts

  • Has internet giant Amazon distorted competition among ebook distributors? (Photo: thejaan)

The European Commission is investigating whether internet giant Amazon has hindered competition with some of the clauses it has put in e-book distribution contracts with publishers.

The commission announced the antitrust investigation against the American company on Thursday (11 June). It “has concerns” that some clauses from Amazon's contracts “may make it more difficult for other e-book distributors to compete with Amazon”.

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According to the commission, Amazon's contracts with book publishers include clauses which give it the right to be informed if a publisher offers “more favourable or alternative terms” to a competing e-book distributor.

The EU is also concerned by a clause that gives Amazon the right to “terms and conditions at least as good as those offered to its competitors”.

Amazon told this website in an e-mailed statement it “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 co-operate fully during this process,” wrote a spokesperson.

Amazon is the largest distributor of e-books in Europe, and it has “developed a successful business that offers consumers a comprehensive service”, said competition commissioner Margrethe Vestager in a statement.

“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 some member states, Amazon's market share is huge. According to an estimate in a 2014 report on the e-book market, Amazon has a 79 percent market share in the United Kingdom, with the largest local e-book seller, Waterstone's, at 3.3 percent.

Richard Mollet, head of the Publishers Association in the UK, welcomed the commission's announcement.

“For some time now we have been calling on competition authorities to look into the imbalance in the book retail market”, said Mollet.

The Federation of European Publishers told this website it would study the terms of the investigation, but said that “at first sight” the Brussels-based organisation “supports any effort to establish a level playing field between the online retail sector”.

The commission's announcement comes several weeks after media reported Amazon has a dispute with Penguin Random House, in what could be a repetition of the feud it had last year over e-book pricing with French publisher Hachette.

The Amazon--Hachette battle was partly fought out in the street via newspaper advertisements and other public statements.

In its recent digital strategy, the EU commission had already announced a more general - and non-binding - analysis of the power of online intermediaries such as Amazon and Facebook.

Power via digital locks

But Canadian-British author Cory Doctorow noted in a recent event in the European Parliament that Amazon derives part of its power from European copyright rules.

He pleaded for a reform of EU rules on copyright prevention technologies, which can prevent consumers taking their purchased e-books from one device to another.

“Only the big technology companies that put digital locks on works, can take them off”, Doctorow said.

“So when a European giant publisher like Hachette falls out with Amazon and says: 'Allright then, don't sell our books, we'll send our customers to your competitors', Amazon sits back and laughs. Because they say: 'You know what, all of the books that you've ever sold through Amazon, are locked to Amazon. And if you want your customers to follow you to some other platform, you have to bet that they're willing to buy all of those books again'."

The commission noted that there is no deadline for the probe to be concluded.

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