Amazon’s commitments to ease anti-competitive clauses in its agreements with e-book publishers have become legally binding, following a decision by the European Commission.
“Today’s decision will open the way for publishers and competitors to develop innovative services for e-books, increasing choice and competition to the benefit of European consumers,” Competition Policy Commissioner Margrethe Vestager said.
“Amazon used certain clauses in its agreements with publishers, which may have made it more difficult for other e-book platforms to innovate and compete effectively with Amazon. We want to ensure fair competition in Europe’s e-books market worth more than €1 billion.”
The Commission opened an investigation in June 2015 because it had concerns about clauses included in Amazon’s e-books distribution agreements that could have breached EU antitrust rules. These clauses, sometimes referred to as “most-favoured-nation” clauses, required publishers to offer Amazon similar (or better) terms and conditions as those offered to its competitors and/or to inform Amazon about more favourable or alternative terms given to Amazon’s competitors.
The clauses covered not only price but many aspects that a competitor might use to differentiate itself from Amazon, such as an alternative business (distribution) model, an innovative e-book or a promotion.
The Commission considered that such clauses could make it more difficult for other e-book platforms to compete with Amazon by reducing publishers’ and competitors’ ability and incentives to develop new and innovative e-books and alternative distribution services. The clauses may have led to less choice, less innovation and higher prices for consumers due to less overall competition in the European Economic Area (EEA) in e-book distribution.
Amazon sought to address the Commission’s concerns by offering not to enforce, introduce or to change the terms of its agreements with publishers. It amended its proposal following feedback received from interested parties on the suitability of Amazon’s originally proposed commitments.
The Commission has now concluded that the amended final version of the commitments offers a timely, effective and comprehensive solution to the competition concerns it had identified.