Just as the case of the Luxembourg taxes has ended, the EU has opened a new has opened another investigation into the European practices of online retailer Amazon (NASDAQ:AMZN).
This time the EU Commission in Brussels is curious about e-books on the chance that Amazon could be abusing its dominant position.
The Commission said it would investigate some clauses in contracts between Amazon and publishers because it fears that some of these could make it difficult for other e-book distributors to compete with the American group, thus limiting competition to the detriment of the consumer.
“It is my duty to make sure that Amazon’s arrangements with publishers are not harmful to consumers.” wrote EU antitrust commissioner Margrethe Vestager in an e-mailed statement cited by Bloomberg on Thursday.
Vestager explained the probe, noting that Amazon’s clauses “require publishers to inform Amazon about more favorable or alternative terms offered to Amazon’s competitors” such that Amazon can then demand those same favorable terms.
According to the Commission, such clauses could make it difficult for competitors to compete in the distribution of e-books, preventing the development of new products and services and thus limiting choice for consumers.
But Amazon is sure of that it has not breached any more EU laws, eager to prove its innocence before the European authorities, stressing that its agreements with publishers are legal and in the best interests of the readers:
“Amazon is confident that our agreements with publishers are legal and in the best interests of readers. We look forward to demonstrating this to the commission as we cooperate fully during this process,” said the Seattle based company.
Amazon is not new to these concerns in Europe; indeed, it recently closed a related and rather intense chapter with French publisher Hachette.
In November 2014, Amazon and the French publisher Hachette Book Group reached an agreement on the sale of e-books and traditional books, ending one of the toughest publishing sector battles and overall antitrust disputes in recent memory. Such was the level of friction that the terms of the settlement were not revealed.
Amazon and Hachette, the US subsidiary of the French group Lagardere, battled for an entire year. The clash was initially kept confidential, then it became public as both sides sought the involvement of readers and authors.
The French press in particular stressed that Amazon, targeting 900 authors, had asked its customers to take sides in the dispute with Hachette Book Group (HBG). To do so, the online retail giant published a letter published on the website www.readersunited.com, the email address of Michael Pietsch, HBG’s owner of HBG, urging readers to write to him in order to put pressure.
Amazon, suggested the French press, wanted to make the case that Lagardere had colluded to maintain high prices for e-books. The French publisher in turn summoned writers to blame Amazon of violating antitrust rules, even going as far as publishing a petition in the New York Times.
Hachette ultimately won by regaining the right to set its own prices for e-books, which it considered essential for survival.
On a more curious note, Amazon customers in many western countries could purchase, for a period of about two weeks from May 24 to June 6, Islamic State’s (or ISIS/Daesh) English-language propaganda journal ‘Dabiq’ according to BBC.
Dabiq existed since 2014 and until now was it was thought to be issued only in PDF format. It takes its name from the city of Dabiq, located in northern Syria about 10 kilometers from the Turkish border and some fundamentalists say it is the place where the final battle between Islam and Christianity will take place.
The product description on Amazon Dabiq described as "a magazine with pictures and articles covers topics that include: tawhid (unity), manhaj (seeking truth), hijrah (migration), jihad (holy war) and Jama'ah (the community).
Sources said that the first nine issues of Dabiq were available for sale at just under US$20 through a reseller known as al-Hayat Media – which is the same name as one of the online platforms used by IS to spread its propaganda. The user has promptly been blocked.
Amazon was trading 0.57 percent higher this afternoon.