The most-favored-nation clause is a tool invented by Apple and used by Amazon to prevent being undercut by price competition. It is on house arrest in the European ebook market for the next five years.
The European Commission said on Thursday it had accepted commitments from Amazon to alter its ebook contracts with publishers to end an EU antitrust investigation.
Amazon, the biggest ebook distributor in Europe, proposed to drop some clauses in its contracts so publishers would not be forced to give it terms as good as those for rivals.
Such clauses relate to business models, release dates, catalogs of ebooks, features of ebooks, promotions, agency prices, agency commissions and wholesale prices.
"Today's decision will open the way for publishers and competitors to develop innovative services for ebooks, increasing choice and competition to the benefit of European consumers," EU competition chief Margrethe Vestager said in a statement.
"We want to ensure fair competition in Europe's ebooks market worth more than 1 billion euros," she continued.
Amazon said it was pleased to reach an agreement with the Commission.
The Commission opened an investigation into the company's ebooks in English and German in June 2015, concerned that such parity clauses made it harder for other ebook retailers to compete with Amazon by developing new and innovative products and services.
Amazon made its offer of concessions in January. The commitments apply for five years in Europe.
The EU competition enforcer then gave rivals and customers a month to provide feedback before it decides whether to accept the proposal. Under EU antitrust rules, such settlements mean no finding of infringement nor fines which could reach 10 percent of a company's global turnover.
The Commission is also probing Amazon over its arrangement with Luxembourg to minimize its tax bill, part of a crackdown on such deals in the 28-country bloc.
(Reporting By Philip Blenkinsop and Foo Yun Chee; editing by Robert-Jan Bartunek)