The European Commission (EC) has recently revealed that it is starting an antitrust probe into Amazon's e-books business.
The EC believes that Amazon is abusing its powers for the distribution of its e-books. The EC suggests that the investigation will mainly focus on the company's contracts with publishers. The EC worries that, by investigating these contracts, it will be in a position to determine if Amazon is forcing publishers to inform the company about deals with other businesses.
The EC suggests that such practice from Amazon is not beneficial to rivals as it reduces competition and leaves customers with limited choices.
An EC press release suggests that Amazon has successfully developed a business that offers a comprehensive service to users that include e-books. The EC investigation does not question Amazon's successful business. However, the EC has other concerns.
"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," says Margrethe Vestager, EU Commissioner in charge of competition policy.
The latest antitrust probe brings an additional headache to Amazon in Europe. The EC is currently also investigating if Amazon received favorable tax deals, which may have violated competition rules in Europe. Recently, Amazon also announced that the company will start collecting sales taxes from all countries in Europe as it is facing massive pressure from many European governments.
The EC has investigated e-books sectors in the past, under the European Union's (EU) antitrust rules. In December 2011, the EC started proceedings over concerns that Apple and five well-known international publishing houses might have plotted to restrict the retail prices of e-books and limit competition in the European Economic Area (EEA), which is a breach of antitrust rules in EU.
Based on the EC's investigations, the involved companies provided several commitments to address the Commission's concerns.
There has been an upsurge in e-book demand in Europe, and Amazon is currently the biggest distributor of e-books on the continent. Many other companies offer e-books, but they will not be able to compete properly in the European markets if Amazon tries to cut competition.
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