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Commission seeks feedback on commitments offered by Amazon in e-book investigation

The European Commission is inviting comments on commitments offered by Amazon to address competition concerns relating to parity clauses in contracts with publishers. The clauses may breach EU antitrust rules and result in reduced competition among e-book distributors, and less consumer choice.

The Commission has concerns relating to certain parity clauses contained in contracts between Amazon and publishers. These clauses, sometimes referred to as “most-favoured-nation” or “MFN” clauses, require publishers to inform Amazon about more favourable or alternative terms offered to Amazon’s competitors and/or offer Amazon similar terms and conditions than to its competitors. This requirement includes forcing publishers to also offer to Amazon any new alternative business models, such as using different distribution methods or release dates, or making available a particular catalogue of e-books.

These clauses may make it harder for other e-book retailers to compete with Amazon by developing new and innovative products and services. Such clauses may also limit competition between different e-book distributors and reduce choice for consumers. The Commission considers that Amazon’s behaviour may violate EU antitrust rules that prohibit abuses of a dominant market position and restrictive business practices.

To address the Commission’s competition concerns, Amazon has offered the voluntary commitments. Nothing in these commitments should construe as implying that Amazon agrees with any concerns preliminary expressed by the commission in case. Commitments were given on the understanding that commission will confirm that there are no grounds for further action and will close the proceedings opened in 2015.

According to these commitments Amazon will cease to enforce or otherwise rely upon any Business Model Parity, Agency Commission Parity, Agency Price Parity, Features Parity, Promotions Parity, Selection Parity, wholesale price parity or Notification provision contained in an eBook Agreement between Amazon and eBook suppliers for the sale of eBooks to consumers in the EEA.

In other words – not to enforce (i) any clause requiring publishers to offer Amazon similar terms and conditions as those offered to Amazon’s competitors or (ii) any clause requiring publishers to inform Amazon about such terms and conditions. This commitment would cover in particular terms and conditions concerning business models, release date and catalogue of e-books, features of e-books, promotions, agency price, agency commission and wholesale price. Amazon would also notify publishers that it would no longer enforce such provisions.

Amazon will notify each of these eBook Suppliers that it will no longer enforce such provisions, and Amazon will notify each eBook Supplier whose eBook agreement for the sale of eBooks to consumers in the EEA contains a discount pool provision currently in effect that the eBook supplier may terminate the eBook agreement for any reason upon 120 days’ advance written notice.

In other words – to allow publishers to terminate e-book contracts that contain a clause linking discount possibilities for e-books to the retail price of a given e-book on a competing platform (so-called Discount Pool Provision). Publishers would be allowed to terminate the contracts upon 120 days’ advance written notice.

The commitments would apply for a period of five years to e-book agreements throughout the European Economic Area. Amazon would appoint a Trustee to monitor Amazon’s compliance with the commitments. Interested parties can submit comments within one month from the date of publication.