Amazon's e-book distribution contracts could be illegal, says EU

The EU will conduct a formal investigation of Amazon's contracts with publishers, but the company says its contracts are legal

Amazon logo on tape

Amazon logo on tape

Amazon.com's e-book distribution deals are coming under close scrutiny from the European Commission, which has begun a formal antitrust investigation into the company's contracts with publishers.

The probe will focus on clauses in Amazon's contracts that require publishers to tell the company about more favorable or similar terms and conditions they offer competitors, or ensure that Amazon is offered terms as least as good as the competition, the Commission said in a news release.

Such clauses can make it more difficult for other e-book sellers to compete with Amazon by developing new and innovative products, the Commission said, adding that it will investigate if the clauses limit competition and reduce consumer choice. If that is the case, Amazon could violate European Union antitrust rules that prohibit the abuse of a dominant market position.

The company denied the allegations, saying its agreements with publishers are legal and in the best interests of readers. The company plans to cooperate with the investigation, it said.

Amazon is currently the largest distributor of e-books in Europe, where e-books have become increasingly popular in the last years. The investigation will focus on e-books in German and English, the largest e-book markets in the EU, the Commission said. It began the investigation on its own initiative, and not as a result of a complaint, it said.

The e-books sector has been under investigation in Europe before. In 2011, the Commission opened a probe into deals Apple had with publishers on the suspicion that they had colluded to fix prices for e-books. Those concerns were addressed in 2012 and 2013 when the companies offered commitments that were accepted by the Commission.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, online payment issues as well as EU technology policy and regulation for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com

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