European Commission accepts Amazon commitments to remove most favoured nation clauses from e-book distribution agreements
- 08/05/2017
- Articles
On 4 May 2017, the European Commission (“Commission”) announced that it had accepted, pursuant to Article 9 of Regulation (EC) No.1/2003, to make binding commitments that Amazon offered ending the use of parity clauses in distribution agreements with electronic book (“e-book”) publishers. These commitments will apply for a five year period and will cover any e-book in any language which is distributed by Amazon in the EEA.
The Commission previously had concerns with clauses which gave Amazon the right: (i) to be notified of more favourable or alternative terms offered by publishers to its competitors; and/or (ii) to be granted terms and conditions at least as favourable as those offered by publishers to its competitors (see VBB on Competition Law, Volume 2017, No. 1). In addressing the Commission’s concerns, Amazon has specifically agreed:
- Not to enforce: (i) relevant clauses requiring publishers to offer Amazon similar non-price and price terms and conditions as those offered to Amazon’s competitors; or (ii) any such clauses requiring publishers to inform Amazon about such terms and conditions;
- To allow publishers to terminate e-book contracts that contain Discount Pool Provisions (i.e., a clause linking discount possibilities for Amazon to the retail price of a given e-book on a competing platform);
- Not to include, in any new e-book agreement with publishers, any of the clauses mentioned above, including Discount Pool Provisions.
If Amazon breaches any of these commitments, the Commission could impose a fine of up to 10% of Amazon’s total annual turnover, without having to establish a violation of the EU competition rules. In its press release announcing acceptance of Amazon’s final commitments, it states that these “will help ensure that innovation for e-books by publishers and other third parties can benefit companies other than Amazon and protect effective competition for e-books to the benefit of consumers.”