Amazon Probed for E-Books as EU Widens Scrutiny of U.S. Tech

Updated on Inc. faces a probe into its e-book contracts with publishers as the European Union’s Antitrust Commissioner Margrethe Vestager added to her growing list of fights with U.S. technology companies.

EU regulators said the world’s biggest online retailer may be squeezing out rival distributors of e-books by insisting that publishers can’t give them better terms.

“We’re not actually targeting U.S. companies -- we don’t have a geographic bias,” Vestager said in an interview on Thursday. “This just reflects that there are many strong companies in the U.S. that influence the digital market elsewhere.”

The e-books probe is Amazon’s latest clash with the EU after it was embroiled in an investigation into tax loopholes for multinationals including Apple Inc. Since taking office in November, Vestager has also sent Google Inc. a formal antitrust complaint for shutting out rival search engines and started a clampdown on possible barriers to e-commerce and digital content including Hollywood studios’ pay-TV deals.

The EU’s antitrust watchdog said the Seattle-based company includes clauses in its contracts that “require publishers to inform Amazon about more favorable or alternative terms offered to Amazon’s competitors” and to “ensure that Amazon is offered terms at least as good as those for its competitors.”

Amazon, now the largest distributor of e-books in Europe, helped pioneer the market with the introduction of the Kindle device in 2007.

Penguin, Apple

“Amazon is confident that our agreements with publishers are legal and in the best interests of readers,” the company said in an e-mailed statement. “We look forward to demonstrating this to the commission as we cooperate fully during this process.”

The Amazon case follows settlements with publishers, including Penguin, and Apple in a previous probe into pricing of e-books.

The EU said it will analyze whether the clauses inserted by Amazon prevent competitors from developing new products and “whether such clauses may limit competition between different e-book distributors.”

This behavior may violate “EU antitrust rules that prohibit abuses of a dominant market position and restrictive business practices,” regulators said.

“‘If a publisher/e-book distributor got a better deal elsewhere and Amazon had a right to match that deal then Amazon might become an ‘entrenched supplier’,’’ said Tim Cowen, a lawyer at Preiskel & Co. LLP in London.

Competition regulators have taken enforcement action against similar causes. Priceline Group Inc.’s settled antitrust probes in France, Sweden and Italy in April by agreeing to drop clauses preventing hotels from offering lower room prices on competing online travel services.