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Business

EU launches probe into Amazon e-books

The European Union's anti-trust watchdog has opened a formal investigation into Amazon over its distribution of e-books. It is the latest in a series of such inquiries by Brussels targeting major global firms.

The European Commission, the EU's executive arm, announced Thursday it was probing certain clauses in Amazon's contracts with publishers which may shield the company from competitors, including an obligation to be informed of more favorable terms being offered by rivals.

The Commission said the clauses could violate EU antitrust rules that prohibit abuses of a dominant market position and restrictive business practices.

Amazon is the largest distributor of e-books in Europe and owns the popular e-book device, the Kindle. And the investigation marks yet another front in mounting EU scrutiny of America's tech giants.

In April, the EU executive opened a formal investigation into tech giant Google's business practices regarding web search results, and later this year will conduct a sweeping review of the behavior of online platforms.

The latest probe

Competition Commissioner Margrethe Vestager said in a statement that the inquiry into Amazon did not call into question the company's "successful business" offering customers goods such as e-books.

Margrethe Vestager

Vestager has initiated a series of antitrust probes since becoming EU Competition Commissioner

"However, it is my duty to make sure that Amazon's arrangements with publishers are not harmful to consumers by preventing other e-book distributors from innovating and competing effectively with Amazon," Vestager noted. "Our investigation will show if such concerns are justified," she added.

The investigation will center on English and German e-books, which are the largest markets across Europe.

Amazon, however, stressed it was confident its agreements with publishers were legal and in the best interests of readers. "We look forward to demonstrating this to the Commission as we cooperate fully during this process," it said.

US firms under scrutiny

But if the Commission finds that Amazon's arrangements limit competition and reduce consumer choice, then the firm could be fined or forced to change its business practices.

The investigation is the latest in a series of probes initiated by Vestager since her taking over as EU Competition Commissioner in November last year.

US-based tech firms have been a particular target for Vestager amid concerns that companies across the Atlantic are distorting the EU's cherished single market.

President Barack Obama, whose administration is trying to negotiate an ambitious transatlantic free trade deal with the 28-nation bloc, warned earlier this year against Europe turning to protectionism to the detriment of the US tech sector.

sri/uhe (AFP, AP, Reuters)

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