German Publishers and Booksellers Association Files Complaint with the Bundeskartellamt against Amazon
German Publishers and Booksellers Association: Amazon’s negotiating practices vis-à-vis publishers violate antitrust laws / Amazon abusing its dominance on the German purchase market for e-books
The German Publishers and Booksellers Association (Börsenverein des Deutschen Buchhandels) has filed an official complaint against Amazon with the Bundeskartellamt, Germany’s federal antitrust authority. Since early May, the giant online retailer has delayed deliveries of printed books from Bonnier, a leading publishing group in Germany, in order to force higher discounts for the sale of e-books. In the opinion of the German Publishers and Booksellers Association, these negotiation tactics are evidence that Amazon is abusing its strength and position on the German purchase market for e-books.
"Amazon’s extortive activities against publishers violate antitrust laws," argues Alexander Skipis, chief executive at the German Publishers and Booksellers Association. "Amazon’s business practices have an effect not only on those publishers involved; they also pose a threat to all e-book sellers and distributors in Germany. We urge the Bundeskartellamt to open an investigation and prohibit Amazon’s activities."
Prior to filing the complaint, the German Publishers and Booksellers Association had the case examined by antitrust lawyers, who concluded that Amazon is indeed abusing its market position in a clear and undisputable manner. According to media reports, the online retailer is asking publishers belonging to the Bonnier Media Group for an increase in the discount for e-book purchases from today’s roughly 30 percent to 40 to 50 percent in the future. This would give Amazon – for no objectively justified reason – clear advantages over other purchasers of electronic books. To achieve this, Amazon is attempting to enforce its demands using means that resemble coercion. By imposing delays in delivery, Amazon is increasing pressure on the affected publishers, who then feel the economic consequences directly. Amazon’s business practices vis-à-vis German publishers became public after media coverage of similar cases involving Hachette Publishers in the USA.
In this case, the market in question is the purchase market for e-books in Germany. As a buyer of electronic books in Germany, Amazon has a so-called "relative market strength" or "market-dominant position." This position is not determined by the share of the market held by a company, but rather by the fact that market participants are dependent upon one company in a special way. In concrete terms, Amazon’s dominant market position means that publishers have almost no alternatives to turn to without suffering considerable competitive disadvantages. The market strength of Amazon as an e-book purchaser is the result of its dominant position as a seller: according to the Association of German Mail-Order Booksellers (Verband der Versandbuchhändler), Amazon controls a market share of as much as 70 percent of the online and mail-order market of printed and digital books in Germany, which clearly would make it the market dominator.
The text of the complaint reads further: "Amazon’s demand of special conditions such as is the case here is nothing if not the expression of its market dominance, i.e. of a situation in which Amazon – as the market-dominating online sales partner – is indispensable for publishers. In this situation, antitrust law must prevent the granting of such advantages."
The Bundeskartellamt will act in officio, i.e. it will initiate proceedings of its own accord and is not bound by requests or complaints. If it determines a violation to antitrust laws, the Bundeskartellamt can call for the cessation of the breach of the law or impose fines.
Frankfurt/Main, 24 june 2014
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