EU and Amazon Reach Agreement After E-Book Investigation

Amazon and the European Union's antitrust regulators have reached an agreement that ends Amazon's insistence that e-book publishers give no other company better terms, the Wall Street Journal reported. An EU investigation into whether Amazon's 2003 tax deal with Luxembourg unfairly and illegally allows it to pay much lower taxes on European operations than it would otherwise continues.

Called "most favored nation" agreements, the contract clauses Amazon had insisted on require publishers to inform or offer Amazon similar terms as those offered to rivals. Under the agreement announced today, Amazon won't enforce those clauses or include them in new contract and will allow publishers to cancel contract that contain those clauses. Amazon has committed to these changes "for five years to all e-books distributed by Amazon in Europe," the Journal wrote. "Amazon could be fined up to 10% of global revenue if it goes back on its pledges."

The EU had been investigating whether Amazon's contracts prevented competitors from developing new products and limited competition between sellers of e-books. The investigation has focused on English-language and German-language e-book markets. The case got its start in 2014, when the Börsenverein--the German book trade association--filed a complaint about several of Amazon's business practices with the German antitrust office, a complaint that resonated with the EU. Reports last fall indicated that Amazon was in settlement talks with EU regulators; early this year Amazon made the offer that was agreed to today.

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