On 24 January 2017, the European Commission announced it was
inviting comments on voluntary commitments offered by Amazon
relating to parity clauses included in its contracts with
publishers of e-books. In brief, Amazon has offered to end the use
of parity clauses under these commitments, which will apply for a
period of five years. The commitments will be overseen by a
By way of background, on 11 June 2015, the Commission announced
that it had started an investigation into Amazon's distribution
contracts with publishers of e-books (see VBB on Competition Law,
Volume 2015, No. 6, available at
www.vbb.com). The Commission was concerned 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 (referred to by the
Commission collectively as "parity clauses").
On 9 December 2016, the Commission adopted a preliminary
assessment within the meaning of Article 9(1) of Regulation (EC)
No. 1/2003 ("Assessment"). According to the Assessment,
Amazon may be dominant in the relevant markets for the retail
distribution of English and German language e-books to consumers in
the EEA, and Amazon's parity clauses used in the context both
of agency and reseller agreements may constitute an abuse of its
dominant position in breach of Article 102 TFEU and Article 54 of
the EEA Agreement. The Commission takes issue in the Assessment
with a wide range of specific parity clauses, which (according to
its press release) require publishers to offer Amazon similar terms
and conditions as those offered to Amazon's competitors, or to
inform Amazon of such terms. These clauses comprise:
Price-Related Parity Clauses (such
as: Agency Price Parity; Discount Pool Provisions; Promotion
Parity; Wholesale Price Parity; and Agency Commission Parity)
Non-Price-Related Parity Clauses
(such as: Business Model Parity; Selection and Features
Notification Provisions (under which
publishers must notify Amazon of alternative or more favourable
terms offered to other retailers).
The Commission considers that these Parity Clauses and
Notification Provisions have a number of anti-competitive effects
including: dis-incentivising publishers from innovating; making it
difficult for other e-book retailers to compete with Amazon in
creating innovative products and services; deterring entry and
expansion by e-book retailers; and risking higher prices and less
choice for consumers.
Amazon has offered to address the Commission's concerns by
Not to enforce any of these Parity
Clauses or Notification Provisions, and to inform publishers that
it will not enforce them.
To permit publishers to end e-book
contracts with Amazon containing 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). Publishers will
be allowed to terminate the contracts upon 120 days' advance
Not to include, in any new e-book
agreement with publishers, any of the clauses mentioned above,
including Discount Pool Provisions.
The Commission has invited comments on the proposed commitments
by 26 February 2017.
The case illustrates the increasing competition law risks
relating to the use of parity clauses when they benefit firms with
market power. Thus far, these clauses have garnered scrutiny from
the Commission in the earlier (Apple) E-books case, as well as from
the national authorities in, in particular, the HRS and Booking.com
cases (see e.g., VBB on Competition Law, Volume 2014, No. 3, VBB on
Competition Law Volume 2015, No.7 and VBB on Competition Law,
Volume 2016, No. 11, available at
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