Amazon.com Faces German Antitrust Scrutiny

Amazon.com Faces German Antitrust Scrutiny

A first step to EU involvement?

A group representing German book publishers has formally filed a complaint with antitrust regulators in the German government, asking them to investigate Amazon.com's business practices. The group claims that Amazon is violating German antitrust laws and that its behavior needs to be curbed immediately.

"Amazon's business conduct not only affects those publishers involved, but poses a danger to all who offer e-books in Germany," the German Publishers and Booksellers Association complaint notes. "We call on the Bundeskartellamt [the German antitrust authority] to open an investigation and halt Amazon's actions."

Amazon's actions in Germany mirror those in the United States, where the retailing giant is involved in a very public spat with publisher Hachette. In Germany, Amazon is battling a publisher called Bonnier over the revenue split from the sale of e-books. And as with its Hachette fight, Amazon is making it difficult to impossible for customers to purchase Bonnier titles while negotiations continue. The delivery of many books are simply delayed by several days or weeks.

Amazon's behavior is clearly malevolent, and the company is equally obviously abusing its market power to gain a pricing advantage. But what's less clear is whether this behavior violates any laws. Unless Amazon is found to have a monopoly, this kind of tactic is not illegal.

But that's in the United States. German and EU antitrust laws are, of course, a bit different, as is the legal approach taken by regulators in these regions. And those differences could work to the benefit of Amazon's detractors.

For example, Amazon currently controls 70 percent of the market for both traditional books and e-books in Germany, a figure that wouldn't warrant antitrust oversight in the United States. German regulators will, however, determine whether this market power constitutes monopoly power in that country and then act accordingly.

The publishers claim that Amazon's tactic of withholding books from companies that don't agree to onerous new revenue splits amounts to "extortion," because books that are not listed on Amazon "don't exist in the eyes of a reader ... Amazon is the largest selling platform for books on the Internet in Germany."

Beyond that, it's reasonable to assume that the European Commission—which oversees antitrust laws for all of the EU—could potentially get involved as well. It's not hard to imagine that Amazon controls similar market power throughout the continent and that its behavior impacts consumers outside of Germany as well.

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