Amazon Faces Antitrust Complaint in Germany
It looks like Amazon’s rough negotiating tactics have finally caught up with the retailer.
The Bookseller reported today that Börsenverein, the German book industry trade group, has filed an antitrust complaint against Amazon with Bundeskartellamt Beschwerde, the German Federal Cartel Office.
The Börsenverein is alleging that Amazon’s ongoing contract negotiation with the Swedish-owned Bonnier crosses the line from playing dirty to illegal. As you may recall from when I broke the story in May, Amazon was said to be pressuring Bonnier by letting Bonnier’s print titles go out of stock and by removing pre-order buttons.
According to industry gossip which has been repeated by Börsenverein, Amazon is pressuring Bonnier into accepting a lower ebook royalty. Rather than take what is now an industry standard cut of 30%, Amazon is said to be seeking to increase its cut to between 40% and 50%. Of course, the details from the negotiations are entirely unconfirmed, even when Börsenverein shares them; any negotiation with Amazon is likely conducted under an NDA and thus the details should not have been disclosed.
According to Börsenverein, Amazon has a 70% share of the online book sales across both print and digital, and was "thus clearly dominant". These "special conditions" demand by Amazon, were driven by the "market strength of Amazon". (Curiously enough, I don’t see a mention of the total German book market and Amazon’s share; I will look into that.)
And so the trade group is asking that Amazon be investigated for violating Germany’s laws against competition. It’s not known at this time whether Amazon will be fined or even investigated, but it seems Amazon’s finally pushed things too far.
In addition to Germany, Amazon is also pressuring publishers in the UK to radically change the terms of their contracts with Amazon, and the retailer is also in round 7 of a knock down drag out fight with Hachette in the US.
There haven’t been any reports of Amazon playing dirty in the UK (not yet), but here in the US Amazon has been short stocking Hachette titles, selling them at full price, and removing the pre-order buttons.
image by todd.vision
Name June 24, 2014 um 3:24 pm
Half-OT, but since you were wondering about the strategy behind German publishers sueing Google for a share of its news-snippets related revenues, assuming that Google could simply decide to force publishers to lift their right to ask for that share, antitrust laws might prevent Google from doing that. Google is arguably the dominant search provider with a power to dictate conditions. Consequently, some publishers have now begun to file corresponding complaints: http://www.heise.de/newsticker/meldung/Verlage-reichen-Kartellbeschwerde-gegen-Google-ein-2237428.html
It is an interesting strategy, considering that that law that allows publishers to get that revenue share in the first place is a result of political lobbying by the publishers. You could argue that the publishers actually have a point, but you could also argue against. Well, business as usual.
Nate Hoffelder June 24, 2014 um 3:47 pm
Indeed. Google is facing their own antitrust suit in Europe, aren’t they?
Thanks for the link.
Edit: Hmm, there are angles which I hadn’t considered. I need to write this up. Thanks again.
fjtorres June 24, 2014 um 5:39 pm
Didn’t you mention a while back that Amazon’s market share in Germany is relatively low?
European antitrust isn’t concerned with consumer harm but rather theoretical competition levels so if Amazon is actually facing decent competition they can skate through on antitrust terms. Of course, on political terms…
Nate Hoffelder June 24, 2014 um 5:58 pm
I’m still looking for Amazon’s total market share. Factor in paper books and I think it is pretty high.
What I wrote was that Amazon’s ebook market share in Germany was less than 50%:
eBooks still make up a tiny minority of the market so at this point they really don’t matter.
Rebecca Allen June 24, 2014 um 8:23 pm
Got any basis for the assertion about german/euro antitrust law being significantly different from US? 'Cause I have been shocked at the similarities as I research …
puzzled June 24, 2014 um 6:55 pm
Anytime the Börsenverein wants to hurt Amazon, all they have to do is sell books to Amazon’s competitors for less.
iNuh June 24, 2014 um 7:42 pm
That would have to be a coordinated effort from a numerous publishers and forming a price cartel against Amazon might not be legal.
iNuh June 24, 2014 um 7:46 pm
Hm, that comment was supposed to be in reply to puzzled’s omment.
Mike June 25, 2014 um 3:14 am
LOL, Amazon is Jesus, I thought. They are not capable of committing sin…
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