The European Commission has begun an investigation into whether clauses in Amazon’s contracts with European book publishers are anticompetitive.
The clauses require publishers to inform Amazon — the largest distributor of e-books in Europe — when they offer more favorable or alternative terms to its competitors. EU antitrust rules prohibit abuses of a dominant market position and restrictive business practices.
“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,” Margrethe Vestager, EU Commissioner in charge of competition policy, said in a news release. “Our investigation will show if such concerns are justified.”
Initially, investigators will focus on England and Germany, the largest markets for e-books in the eurozone. Amazon has been estimated to sell about 8 out of every 10 e-books in Britain.
It was Amazon, ironically, that pressured the U.S. Department Justice to file an antitrust suit against Apple and five leading publishers for conspiring to fix e-book prices. A federal judge in 2013 found that Apple violated U.S. antitrust law, a verdict the company is appealing.
The announcement of the EU probe “casts Amazon in a very different role,” The New York Times said, since, in the Apple case, it “was celebrated, and aggressively celebrated itself, as a hero for championing lower prices.”
Last June, the German Publishers and Booksellers Association submitted a complaint to the German antitrust authority, claiming that Amazon’s monopoly-like position in the e-book market violated competition law.
The European Commission said it was concerned that the clauses in Amazon’s contracts “may make it more difficult for other e-book distributors to compete with Amazon by developing new and innovative products and services.” If it brings formal charges, or a statement of objections, against Amazon and Amazon fails to successfully rebut those findings, the company could face a fine of as much as 10% of its most recent annual global sales.
In a statement, Amazon said it was “confident that our agreements with publishers are legal and in the best interests of readers.”