European Commission launches formal antitrust investigation into Amazon’s ebooks business

Updated at 8:51 p.m. PST to add statement from Amazon.

The European Commission said today that it has opened an official antitrust investigation into Amazon to determine if the e-commerce giant is abusing its power to distribute electronic books.

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According to an EC press release, the investigation will focus on Amazon’s contracts with publishers that obligate publishers to tell the company if someone else is offering a better deal on electronic books. The EC worries this may be hampering competition and reducing consumer choice.

“Amazon has developed a successful business that offers consumers a comprehensive service, including for ebooks,” said EU Commissioner in charge of competition policy Margrethe Vestager in a statement. “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 ebook distributors from innovating and competing effectively with Amazon. Our investigation will show if such concerns are justified.”

Amazon has not yet responded to a request for comment.

The probe adds to Amazon’s headaches in Europe, where the EC is also investigating whether the company received favorable tax deals that might have violated competition rules. The company recently announced it would start collecting sales taxes across Europe after facing enormous pressure to do so from European governments.

In recent years, U.S.-based tech companies have increasingly found themselves at odds with European regulators over issues involving taxes, antitrust, privacy, and security. A few weeks ago, Vestager filed formal charges against Google for alleged antitrust abuses.

In the case of Amazon, the case is likely causing a few snickers around the Apple headquarters this morning. Apple settled a big ebook antitrust case in the U.S. that was driven in part by Amazon’s complaints over Apple’s deals with publishers. The EC launched a similar probe that was settled when publishers agreed to make some changes to their contracts with Apple.

In Europe, the surge in ebook reading has drawn the attention of the EC. The new probe will focus mainly on books in English and German.

There is not a strict timeline for completing the investigation. The Google antitrust case lasted four years before the official charges were even levied.

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Update: In a statement from Amazon spokesman Conor Sweeney, the company said it believed that its agreements were well within the law and would provide all necessary information to the EC:

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.