Another victory for publishers: Amazon drops anti-competitive clauses in e-book contracts

(Press release from Börsenverein des Deutschen Buchhandels (German Publishers and Booksellers Association))

For the second time in a week, the Amazon Corporation has had to bow to pressure from antitrust authorities. In fact, the online giant has now offered to drop its anti-competitive contract clauses with e-book publishers. The EU Commission had been investigating a number of Amazon’s contractual practices after an antitrust complaint filed by the Börsenverein des Deutschen Buchhandels (German Publishers and Booksellers Association).

Börsenverein Managing Director Alexander Skipis noted: “This step marks a great victory for publishers in Germany and Europe. Amazon continues to use its market dominance in a downright coercive manner to wrest disproportionate commitments from publishers and to create advantages for itself over other e-book sellers. The company is using these practices in its quest to gain a monopoly position; in the process, the online retailer is destroying book-market structures that stand for cultural quality and diversity. Let’s not forget that Jeff Bezos once said publishers should be hunted like sick gazelles. It’s also good to remember that a broad network of thriving bookstores and publishers is essential to our ability to guarantee a diverse and high-quality range of books. Amazon has had to make a number of tough admissions in quick succession this year; indeed, the online giant has been forced to acknowledge that its current business practices – which threaten precisely this diversity and high quality – will not succeed. The Börsenverein will be watching Amazon’s market behaviour very closely and will not hesitate to intervene resolutely if necessary”.

On Thursday it was announced that Amazon’s 100-percent subsidiary Audible and Apple had given up their exclusivity deals in the realm of digital audiobooks as a result of an antitrust complaint submitted by the Börsenverein. Click here to read the press release.

The Börsenverein first filed a complaint with Germany’s Federal Cartel Office (Bundeskartellamt) against Amazon’s contractual practices with regard to e-books in June 2014. The Börsenverein argued that Amazon was misusing its market dominance to garner from publishers an increase in rebates for e-book purchases. After the Federal Cartel Office passed the complaint on to the EU Commission, the Börsenverein entered into dialogue with the Brussels competition authority, which launched its official probe in June 2015.

Thanks to the pressure set into motion as a result of the probe, Amazon is now ready to commit to forgoing its so-called “parity clauses”. These clauses stipulate that publishers must inform Amazon if and when they offer better terms to other retailers, at which point they must also grant Amazon the same terms.

In a press release issued on tuesday, the EU Commission expressed concern that Amazon’s parity clauses could restrict competition between different e-book sellers and, as a consequence, lead to less choice for consumers. The EU Commission is now inviting market participants to provide feedback on the commitments offered by Amazon. As the official complainant, the Börsenverein will examine Amazon’s offer in detail and present its views to the EU Commission.