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E.U. Could Throw Book at Amazon

kindle_reuters
Amazon's Kindle e-reader is one of the most popular on the market.
  • Why it matters

    Why it matters

    If Amazon is found to require e-book publishers to offer it the same or better conditions as rivals, the online retialer may be in breach of anti-trust laws.

  • Facts

    Facts

    • Amazon, which owns the e-reader brand Kindle, is the biggest distributor of e-books in Europe.
    • The company is already under scrutiny over the low tax rates it pays in Luxembourg.
    • The European Commision has also launched an investigation into Google’s online business practices.
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European regulators have opened an investigation into Amazon’s e-book business. The antitrust authorities are examining allegations that contracts between the U.S.-based online retail group and publishers impede competition and are harmful to customers, the European Commission announced on Thursday.

Margrethe Vestager, the EU Competition Commissioner, said: “It is my duty to ensure that Amazon’s contracts with publishers do not have a detrimental impact on consumers.” These agreements could prevent other e-book distributors from innovating and competing effectively with Amazon, she said.

Brussels will initially focus on the markets for English and German-language e-books, which account for the biggest share of the market in Europe. According to the Commission, the E.U.’s executive arm, Amazon is the largest distributor of electronic books in the 28-member bloc.

Amazon rejected the allegations, saying it was “confident that our agreements with publishers are legal and in the best interests of our readers.” The company said it was cooperating with the authorities in their investigations.

This is not the first time that the European competition authorities have conducted an investigation under antitrust law in the electronic book sector.

E-books sold by Amazon and other traders accounted for about 4.3 percent of the German book market last year. This figure, which has been cited by the German Publishers and Booksellers Association, relates to the general public and excludes school books and reference books.

The Commission objects to certain clauses in contracts between Amazon and publishers, which state that the publishers must inform Amazon of the conditions they have agreed with its competitors and ensure that they are offering Amazon equal, or equally good, conditions.

The Commission is now investigating whether this could “restrict competition between different e-book distributors and result in less choice for consumers”. Ultimately, it is arguing that these clauses could make it more difficult for other e-book distributors to hold their ground against Amazon with new products and services.

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Margrethe Vestager has also launched an investigation into Google’s online business practices. Source: DPA

 

However, it added that there is no evidence as yet that clauses in the contracts are anti-competitive.

This is not the first time that the European competition authorities have conducted an investigation under antitrust law in the e-book sector. In December 2011, they initiated proceedings over concerns that Apple and five international publishing companies could have reached agreements to restrict price competition on the retail market for e-books in the European Union. In the end, the publishers offered to make a number of pledges that allayed the Commission’s fears about competition.

 

Thomas Ludwig is Handelsblatt’s Europe correspondent, based in Brussels. To contact the author: ludwig@handelsblatt.com

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