Amazon Faces EU Antitrust Probe Into E-Books Contracts

[Dopedangel]

http://www.bloomberg.com/news/articl...ooks-contracts

Now Amazon seems to be under the fire of EU.

[JSWolf]

It really is unfair for Amazon to be notified about every sale or price drop other shops have going on. I have the EU nails Amazon for this.

[eschwartz]

Unfair or not, it is a rather common generic business practice.

[Little.Egret]

Originally Posted by JSWolf

It really is unfair for Amazon to be notified about every sale or price drop other shops have going on. I have the EU nails Amazon for this.

That's freedom of information for you !

Sainsbury's keeps a eye on prices in other supermarkets and gives me a voucher if what I bought from them was cheaper in ASDA.

[SteveEisenberg]

Originally Posted by Little.Egret

Sainsbury's keeps a eye on prices in other supermarkets and gives me a voucher if what I bought from them was cheaper in ASDA.

Does Sainsbury's insist that Mr Kipling can't lower what it charges ASDA, for jam tarts, unless it also lowers the wholesale price Sainsbury's pays?

I don't know what the answer is to my question. But that's the analogous issue. From the OP link:

Competition regulators have taken enforcement action against similar causes. Priceline Group Inc.’s Booking.com settled antitrust probes in France, Sweden and Italy in April by agreeing to drop clauses preventing hotels from offering lower room prices on competing online travel services.

Here is evidence (not proof) that Amazon does what it is accused of:

http://www.selfpublishingadvice.org/...ues-on-amazon/

Amazon’s Terms and Conditions have always stated that authors who publish on other platforms must not price their books lower elsewhere, and authors who do so are in breach. In the past, this rule hasn’t been consistently enforced, but it seems that the policy is being tightened.

Originally Posted by eschwartz

Unfair or not, it is a rather common generic business practice.

Is this meant as a defense of Amazon?

[eschwartz]

Originally Posted by SteveEisenberg

Is this meant as a defense of Amazon?

Well, yes -- I never take heed of people yammering on about a company being somehow, inscrutably, immoral.
MFN clauses are all of a sudden a shady business practice once it suits the EU drive to persecute non-EU companies for being successful, and I find that incredibly funny in a sad way.

To clarify -- I meant "unfair" in the moral sense as I interpreted the person I quoted. Not in the legal sense, as I do not consider it legally problematic.

[Barcey]

It seems odd that the publishers are complaining about the contract they agreed to with their "agent" Amazon. It's only fair that all "agents" are treated the same.

[SteveEisenberg]

Originally Posted by eschwartz

MFN clauses are all of a sudden a shady business practice . . .

Their concern with MFN clauses goes back to at least May 2002. That doesn't seem sudden to me. Or are you saying that, at some date in the past, whether May 2002 or earlier, when the EU authorities first started being concerned with MFN clauses involving companies with high market share, it was, at that time, sudden?

The first time a law is enforced, it is, almost by definition, sudden. So what?

Originally Posted by eschwartz

once it suits the EU drive to persecute non-EU companies for being successful, and I find that incredibly funny in a sad way.

It is in the nature of competition law that the rules are different if you are successful.

As for persecution, under the law being invoked here, you can't be sent to prison. They can't even wake Jeff Bezos up in the middle of the night to serve process, as happens (not sure if they do it for antitrust) in Amazon's home market. It may be that you have a different idea of persecution than I do.

As for your claim that EU companies are treated differently from ones headquartered elsewhere, maybe it is because no EU retailer has Amazon's literature market share. This idea of EU perfidy seems to me an extraordinary claim requiring extraordinary evidence.

Originally Posted by eschwartz

Not in the legal sense, as I do not consider it legally problematic.

You don't, but European lawyers differ:

http://www.eu-competitionlaw.com/low...me-under-fire/

I realize that my link immediately above is a low-key advertisement. However, I doubt that the factual material there is wrong. Amazon does have a legal problem.

[eschwartz]

Originally Posted by SteveEisenberg

Their concern with MFN clauses goes back to at least May 2002. That doesn't seem sudden to me. Or are you saying that, at some date in the past, whether May 2002 or earlier, when the EU authorities first started being concerned with MFN clauses involving companies with high market share, it was, at that time, sudden?

The first time a law is enforced, it is, almost by definition, sudden. So what?

I think that if MFN clauses were such a problem then perhaps it should've been a problem before.

Instead I see the EU lodging a raft of near-simultaneous complaints against a number of successful businesses.
The common factors amongst these complaints:

They target non-EU companies and prefer EU companies.
These companies are industry leaders.

What they don't have in common:

The offense.

Given that, I feel I am justly suspicious of the suddenness of their concern.

It is in the nature of competition law that that the rules are different if you are successful.

As for persecution, under the law being invoked here, you can't be sent to prison. They can't even wake Jeff Bezos up in the middle of the night to serve process, as happens (not sure if they do it for antitrust) in Amazon's home market. It may be that you have a different idea of persecution than I do.

As for your claim that EU companies are treated differently from ones headquartered elsewhere, maybe it is because no EU retailer has Amazon's literature market share. This idea of EU perfidy seems to me an extraordinary claim requiring extraordinary evidence.

I maintain my stated claim: they are persecuting non-EU companies.

And I have yet to hear convincing logic produced by the EU as to why success should be penalized. I have, however, seen them throw the proverbial spaghetti at the wall to see what charges stick to said companies.

You don't, but European lawyers differ:

http://www.eu-competitionlaw.com/low...me-under-fire/

I realize that my link immediately is a low-key advertisement. However, I doubt that the factual material there is wrong. Amazon does have a legal problem.

I accept that as a valid explanation of the EU viewpoint.

[Dopedangel]

Amazon forcing suppliers to give it the cheapest price is harming competition. Competition between sellers so customers have to pay higher prices. Amazon is using its market domination in an anticompetitive way. As much as I agree that EU has started attacking american companies but most times EU is correct in what they are asking for. Many of such things are being let go wrongly in the US currently because of toothless regulation agencies or political interference or apathy.

[AnotherCat]

Originally Posted by Dopedangel

Amazon forcing suppliers to give it the cheapest price...

Would you point me to a trusted source where that claim is made. Thanks.

That because as far as the Bloomberg link says Amazon requires in its purchase contracts terms as good as is offered to others i.e. Amazon does not require to be the "cheapest", just that it wants to “ensure that Amazon is offered terms at least as good as those for its competitors.”. If that is so, then quite frankly, for myself, I just regard that as being good business.

[Dopedangel]

Originally Posted by AnotherCat

Would you point me to a trusted source where that claim is made. Thanks.

That because as far as the Bloomberg link says Amazon requires in its purchase contracts terms as good as is offered to others i.e. Amazon does not require to be the "cheapest", just that it wants to “ensure that Amazon is offered terms at least as good as those for its competitors.”. If that is so, then quite frankly, for myself, I just regard that as being good business.

I think you are not getting what Amazon is doing and how it is anticompetitive. Lets say your book is being sold for $10 where $7 is for you $3 for the sellers. Now lets say a seller is willing to make less money and sell for $9 now where you still get your $7 but the seller get $2. But Amazon says that you have to relist with them at $9 meaning you get $6.7 and Amazon gets $2.3.
This way they wont face competition from other sellers as Authors or publishers wont be willing to take the hit for the discounts. So Amazon will keep out competitors from this business.
Publishers were forcing publisher pricing on Amazon so not to devalue their product as well as stop Amazon from becoming a monopoly that was wrong as well and it backfired by killing off most all the small sellers and gave the market to Amazon on a platter.
Unlike physical warehousing costs the price of bandwidth and data storage like with most electronics is coming down and sellers willing to take smaller margins per ebooks sold could come up and disrupt Amazon but because of these contracts that is unlikely to happen.



http://www.selfpublishingadvice.org/...ues-on-amazon/

Amazon is not the only ebook distribution channel to discount books without the prior consent of the author – and price drops are fine if they help you sell more books without denting your profit, but only Amazon insists on being the cheapest supplier as part of their terms and conditions
only Amazon will drop your book if it’s cheaper on a different store

[murg]

Originally Posted by Dopedangel

I think you are not getting what Amazon is doing and how it is anticompetitive. Lets say your book is being sold for $10 where $7 is for you $3 for the sellers. Now lets say a seller is willing to make less money and sell for $9 now where you still get your $7 but the seller get $2. But Amazon says that you have to relist with them at $9 meaning you get $6.7 and Amazon gets $2.3.

This is all wrong.

This scenario doesn't trigger the clause on Amazon's contact because the publisher is selling the book to the other retailer at the same $7 it is selling to Amazon. The other retailer discounting the book has nothing to do with the publisher.

Now, if Amazon's contract prevents discounting and the publisher allows the other retailer to discount, then that would trigger the clause.

[eschwartz]

As murg said.

The idea that Amazon would require a discount from the supplier if another retailer offers a discount seems rather farfetched, in the style of a conspiracy theory.

Now, under the agency model Amazon would get discount from the supplier -- but so did the other retailer.

[HarryT]

Originally Posted by eschwartz

As murg said.

The idea that Amazon would require a discount from the supplier if another retailer offers a discount seems rather farfetched, in the style of a conspiracy theory.

Certainly for non-Agency books, Amazon will lower their price (and hence reduce the amount that the author gets paid) if another store discounts the price of the book to below what Amazon are selling it for.

I don't know how it works for Agency books.