Amazon, Apple in antitrust probe over ebook prices

Connecticut AG investigating Amazon, Apple over ebook pricing

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The Connecticut Attorney General's Office is investigating Apple and Amazon for striking potentially anticompetitive agreements with electronic book retailers, the office announced Monday.

The state is concerned with contract provisions known as most-favoured nation (MFN) clauses, which both ebook vendors have made with a number of large publishing houses. These MFN provisions prohibit publishers from striking discounts with other electronic book vendors, eliminating the possibility of competitors offering less expensive ebooks than Amazon or Apple.

"Amazon and Apple combined will likely command the greatest share of the retail e-book market, allowing their most-favored-nation clauses to effectively set the floor prices for the most popular ebooks," said Attorney General Richard Blumenthal in a statement.

In a sample of ebook prices, Blumenthal's office found identical prices for e-books on Amazon, Apple, Borders and Barnes & Noble.

The state identified Hachette Book Group, HarperCollins, Macmillan Publishers, Simon & Schuster and the Penguin Group as publishers that have struck these types of deals with either Amazon or Apple.

In letters to the lawyers of both Apple and Amazon, Blumenthal noted that while MFNs are not "per se illegal" under current antitrust laws, they are not entirely legal either. He requested counsel from both companies to meet with him to discuss the inquiry.


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