reader comments 8
Share this story
Amazon has offered to tweak the terms of e-book contracts with publishers in the hope that it will be enough to prevent European Commission competition officials from, well, throwing the book at the online retail giant—which has been accused of potentially breaching antitrust rules.On Tuesday, the commission—which is the executive arm of the European Union—said that it was seeking feedback from interested parties on commitments that have been proposed by Amazon, after the competition wing of the EC opened an investigation into the company in June 2015.
Antitrust commissioner Margrethe Vestager has expressed concerns that Europe’s largest distributor of e-books may have violated the rules by making it difficult for smaller rivals to compete due to so-called parity clauses in contracts between Amazon and publishers.
Under those clauses, sometimes known as “most-favoured nation” or “MFN,” publishers are required to tell Amazon about “more favourable or alternative terms” that are offered to its competitors.
It’s claimed that Amazon may have abused its dominant position to elbow out others in the e-book distribution market, by forcing publishers to always offer the firm “any new alternative business models, such as using different distribution methods or release dates, or making available a particular catalogue of e-books.”
Amazon has submitted the following offer to the commission, which—if approved—would apply for a five-year period to e-book deals throughout the European Economic Area:
Not to enforce (i) any clause requiring publishers to offer Amazon similar terms and conditions as those offered to Amazon’s competitors or (ii) any clause requiring publishers to inform Amazon about such terms and conditions.
This commitment would cover in particular terms and conditions concerning business models, release date and catalogue of e-books, features of e-books, promotions, agency price, agency commission, and wholesale price.
Amazon would also notify publishers that it would no longer enforce such provisions.
To allow publishers to terminate e-book contracts that contain a clause linking discount possibilities for e-books to the retail price of a given e-book on a competing platform (so-called Discount Pool Provision). Publishers would be allowed to terminate the contracts upon 120 days’ advance written notice.
Not to include, in any new e-book agreement with publishers, any of the clauses mentioned above, including Discount Pool Provisions.
The company has long indicated that it would seek a settlement deal with the commission in order to swerve infringement charges and a potential fine of up to 10 percent of its annual turnover.
Interested parties have one month to respond to the commission’s call for feedback on the offer.
As is standard in such competition cases, Amazon said it would appoint a “trustee” tasked with policing compliance of any such settlement deal with the EU.
“We are pleased to have reached an agreement with the European Commission.
As the commission noted, however, we disagree with some of the suggestions in their preliminary assessment,” Amazon told Ars, adding:
In our view, there is no separate market for the sale of e-books as they compete directly with print books and many other forms of media. We welcome the fierce competition that exists across these forms of media and the many benefits this competition offers customers.
The provisions in question helped to deliver great selection and lower prices to customers—the notion that they had the opposite effect is simply wrong. We will continue to cooperate with the commission during this process, and we will continue working to help authors and publishers reach more readers, improve the digital reading experience, and bring our customers the best possible prices and selection.
But despite its gripes, Amazon has sought to put the case to bed by seemingly meeting the commission’s concerns.
This post originated on Ars Technica UK