That pesky most-favored nation clause in e-book contracts is rearing its head again, this time in Europe. The European Commission has announced it is opening an anti-trust investigation into Amazon’s practice of requiring notice when e-books sold on Amazon were sold more cheaply somewhere else so that it could price-match them there.
EU Commissioner in charge of competition policy Margrethe Vestager said: “Amazon has developed a successful business that offers consumers a comprehensive service, including for e-books. Our investigation does not call that into question. However, it is my duty to make sure that Amazon’s arrangements with publishers are not harmful to consumers, by preventing other e-book distributors from innovating and competing effectively with Amazon. Our investigation will show if such concerns are justified.“
The most-favored nation clause was a major factor in the Apple/Agency Five anti-trust investigation here in the US—an investigation which was mirrored in the EU and brought settlement agreements from Apple and the publishers there. In fact, those settlements precluded the publishers from entering into most-favored-nation arrangements with anyone, including Amazon, for five years. Of course, Amazon is still free to make those contracts with self-publishing writers, small publishers, and anybody else not party to the settlement.
When asked for a statement, Amazon told Ars Technica, “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.”
It should be interesting to see what comes of this, though unclear how big the effect will be. Many European countries have limitations on how much any book can be discounted from its list price.