Oh how the tables have turned for retail giant Amazon.com. Three years ago, Amazon pushed for an antitrust investigation of Apple for e-book price fixing. Now, however, regulators in the European Union have opened an e-book anti-trust investigation into Amazon.
On June 11, 2015 the European Commission announced that it was formally investigating Amazon’s business practices related to its e-book business. Of particular focus are Amazon’s contracts with European publishers. Under the terms of those agreements, publishers are required to inform Amazon if the publishers offer more favorable terms to other e-book retailers. Other provisions allegedly require publishers to offer Amazon terms that are at least as good as those offered to its competitors. The European Regulators are now looking into these provisions to determine their legality. The question of this investigation, according to the European Commission, is to determine whether Amazon’s business practices
“hinder the level playing field and potentially decrease competition between different e-book distributors to the detriment of consumers.”
Amazon, as the largest e-book retailer by far, is in a prime position to exert its dominance over publishers. In the U.S. dominant parties, to a limited extent, can use their position to their advantage. However, under European anti-trust laws, dominant parties must avoid taking actions that extends their dominance.
Depending on the results of the investigation, Amazon could fall from its status as a consumer champion. After the investigation into Apple resulted in a finding of price fixing, consumers hailed Amazon for its support for consumers. However, this investigation could bring that praise to an end. The E.C.’s investigation shows that there is at least some suspicion that Amazon is engaging in practices harming consumers.