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 following commitments:
- 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.
- 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.
- Not to include, in any new e-book agreement with publishers, any of the clauses mentioned above, including Discount Pool Provisions.
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.
A summary of the proposed commitments will be published in the EU’s Official Journal. Interested parties can submit comments within one month from the date of publication.
Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the EEA Agreement prohibit the abuse of a dominant position which may affect trade and prevent or restrict competition.
The Commission opened a formal antitrust investigation into Amazon’s practices in June 2015. Article 9(1) of the Antitrust Regulation 1/2003 enables companies that are concerned by a Commission investigation to offer commitments in order to meet the Commission’s concerns.
Before accepting the commitments, the Commission gives market players and other interested parties an opportunity to submit comments. If the market test indicates that the commitments are suitable to remedy the concerns, the Commission may adopt a decision under Article 9 of the Antitrust Regulation. Such a decision would not conclude that there is an infringement of EU antitrust rules but would legally bind Amazon to respect the commitments it has offered.
If a company breaks such commitments, the Commission can impose a fine of up to 10% of the company’s worldwide turnover, without having to find an infringement of the EU antitrust rules.
More information, including the full version of the commitments is available on the Commission’s competition website, in the public case register under the case number 40153.