Amazon’s ebook contracts eyed by EU
Antitrust body examines if language squeezes out rivals
LUXEMBOURG— Amazon.com faces a probe into its ebook contracts with publishers as the European Union’s antitrust commissioner Margrethe Vestager added to her growing list of fights with U.S. technology companies.
EU regulators said the world’s biggest online retailer may be squeezing out rival distributors of ebooks by insisting that publishers can’t give them better terms.
“We’re not actually targeting U.S. companies — we don’t have a geographic bias,” Vestager said in an interview on Thursday. “This just reflects that there are many strong companies in the U.S. that influence the digital market elsewhere.”
The ebooks probe is Amazon’s latest clash with the EU after it was embroiled in an investigation into tax loopholes for multinationals including Apple Inc. Since taking office in November, Vestager has also sent Google Inc. a formal antitrust complaint for shutting out rival search engines and started a clampdown on possible barriers to e-commerce and digital content including Hollywood studios’ pay-TV deals.
The EU’s antitrust watchdog said the Seattle-based company includes clauses in its contracts that “require publishers to inform Amazon about more favourable or alternative terms offered to Amazon’s competitors” and to “ensure that Amazon is offered terms at least as good as those for its competitors.”
Amazon, now the largest distributor of ebooks in Europe, helped pioneer the market with the introduction of the Kindle device in 2007.
“Amazon is confident that our agreements with publishers are legal and in the best interests of readers,” the company said in an emailed statement. .
The Amazon case follows settlements with publishers, including Penguin, and Apple in a previous probe into pricing of ebooks.
The EU said it will analyze whether the clauses inserted by Amazon prevent competitors from developing new products and “whether such clauses may limit competition between different ebook distributors.”
This behaviour may violate “EU antitrust rules that prohibit abuses of a dominant market position and restrictive business practices,” regulators said.
“If a publisher/ebook distributor got a better deal elsewhere and Amazon had a right to match that deal then Amazon might become an ‘entrenched supplier,’ ” said Tim Cowen, a lawyer at Preiskel & Co. in London.
Competition regulators have taken enforcement action against similar causes. Priceline Group’s Booking.com settled antitrust probes in France, Sweden and Italy by agreeing to drop clauses preventing hotels from offering lower room prices on competing online travel services.