Amazon’s contract clauses with the publishers are being reviewed by the EC in order to determine the legitimacy of the clauses and whether it shields the company’s competition with other companies.
Latest Amazon news is regarding the anti-trust probe that the company has faced recently. There has been a formal investigation being opened by European Commission to look into the distribution practices of the e-books on e-commerce giant’s site. This investigation shall focus on the huge markets for e-books in European Economic Area, also known as the e-books in German and English. It is known that the company remains the largest e-books distributor in Europe.
There are certain clauses that the EC plans to investigate in particular, the clauses that are mentioned in the contracts of Amazon are the ones that are with publishers. The shield protection is provided to the company through these clauses which it keeps the competition away by requiring –
- the right to be informed of more favourable or alternative terms offered to its competitors; and/or
- the right to terms and conditions at least as good as those offered to its competitors.
(Amazon Ebook Contracts Face EU Antitrust Probe – Tech Crunch)
Amazon news states that the concern for EC in the abovementioned clauses is that they are reducing the options that can be provided to the consumers and also the stifles the competition in that particular section. If the EC finds that the contracts by the company are actually limiting or decreasing the competition then it shall be clear that there is violation of antitrust rules stated in EU. There has been no judgment being made at the moment as the investigation has just been opened.
When asked to comment on this action taken, EU commissioner Margrethe Vestager stated that the e-commerce giant has developed a well-established business that has provided the consumers with wide-ranging service that includes e-books. The investigation is however not questioning that fact. At the same time it is the duty of the lawful services to make sure that the arrangements made by the company with the publishers are not harmful for the consumers by disallowing the competitors to innovate or enhance the service for consumers. He also said that the investigation shall make it visible if the concern has been valid.
Furthermore, the Amazon spokesperson explained that the company is confident that arrangements with the publishers are legit and has been in the best of interests for the readers. Also he expressed that he looks forward to demonstrate the procedure to the EC as the company shall cooperate during the process.
There has been no particular timeframe for the antitrust investigations by EC. It can only be determined by the complexity of the case and also how cooperative the company gets with the procedure.