In April the European Commission charged Google over manipulating search results, and now another large U.S. tech company has come under fire. This time Amazon is the company being investigated.
Today the European Commission issued a press release stating that it had launched a formal investigation into “certain business practices” by Amazon. These business practices relate to clauses in Amazon’s ebook contracts requiring publishers to notify them if they offer a competitor a better deal.
In a way it’s similar to the price matching that some retailers offer, but in reverse: Amazon wants to make sure that it “offered terms at least as good as those for its competitors.” Whether or not this is taking place isn’t in question — the investigation is focused on whether or not this is anti-competitive.
“Amazon has developed a successful business that offers consumers a comprehensive service, including for e-books. Our investigation does not call that into question,” EU Commissioner in charge of competition policy Margrethe Vestager said. “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.”
On the one hand, it’s understandable that Amazon wants to ensure that it is offered as good a deal as its competition, but as the largest ebook distributor in Europe, it could be argued that it already has a number of advantages over its competitors. This investigation will focus on “whether such clauses may hinder the level playing field and potentially decrease competition between different e-book distributors to the detriment of consumers.”
Amazon is not the first company to be investigated in the EU over ebook sales. In 2011 the European Commission investigated Apple and five major international publishers including Penguin Random House, Simon & Schuster, and HarperCollins over colluding to “limit retail price competition for e-books in the EEA.” Eventually all of the companies involved settled.
It’s not clear at this point how long the present investigation will last. The Commission points out that there is no “legal deadline” for it to complete its inquiries.