Amazon Offers to Settle EU Probe Over E-Books Contracts

  • EU publishes settlement plan, seeks feedback on ending case
  • Amazon has agreed to change e-book contracts with publishers

Amazon.com Inc. is poised to settle a European Union probe into its e-book deals with publishers by changing controversial clauses, according to regulators.

Amazon won’t enforce clauses that required publishers to offer it terms as good as or better than those they sign with other e-book distributors and will avoid them in future contracts, the European Commission said in a e-mailed statement that outlined details of the company’s offer to settle the investigation. The pledge would last five years and would allow publishers end contracts that link e-book discounts on Amazon to e-book prices on other online stores.

The EU is asking publishers to give feedback in the next month before it can move toward closing the case without levying fines or declaring that the company breached antitrust rules. Companies that break commitments offered to the EU can be fined as much as 10 percent of global revenue.

The e-books probe has been a distraction for Amazon as it fights a higher-profile case over its tax arrangements with Luxembourg -- one of a series of EU probes targeting the fiscal arrangements of U.S. tech giants. Apple Inc. was ordered to pay 13 billion euros ($14 billion) in back taxes when the EU ruled against its tax deal with Ireland.

While Amazon said it welcomed the agreement with the EU, it said it disagreed with regulators’ view that e-books don’t compete directly with print books and other forms of media.

‘Simply Wrong’

"The provisions in question helped to deliver great selection and lower prices to customers -- the notion that they had the opposite effect is simply wrong," Amazon said in an e-mailed statement.

Amazon and Apple managed to shut down a German antitrust probe into audio books deals last week when they also agreed to drop restrictive terms with publishers. Amazon’s success in settling the probe contrasts with Alphabet Inc.’s Google, which tried and failed to strike a similar accord with EU regulators investigating its search engine.

Google’s several offers of concessions met with fierce opposition from European publishers and smaller rivals that eventually forced the EU to abandon a settlement.

EU Competition Commissioner Margrethe Vestager hasn’t shied away from going after big U.S. companies since taking over as the EU’s antitrust chief in late 2014. While she dismisses criticism that she’s deliberately targeting U.S. firms, some of her most high-profile probes concern Amazon, Google and Apple.

Amazon, now the largest distributor of e-books in Europe, helped pioneer the market with the introduction of the Kindle device in 2007. The EU opened its probe in June 2015, saying it was checking whether Amazon’s contracts prevent competitors from developing new products and limit competition between sellers of e-books. The investigation focuses on books published in English and German.

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