Connecticut Investigating Amazon's E-Book Business
By Jeffrey A. Trachtenberg and Dana Mattioli
Connecticut is actively investigating how Amazon.com Inc. sells
and distributes digital books, according to the state's attorney
general, the latest of several state and federal probes into the
tech giant's business practices.
The investigation is examining whether Amazon engaged in
anticompetitive behavior in the e-book business through its
agreements with certain publishers, Connecticut Attorney General
William Tong said in a statement.
Connecticut asked Amazon to provide documents related to its
dealings with five of the largest U.S. book publishers, according
to a subpoena issued in 2019. The Tech Transparency Project, a
nonprofit that investigates technology platforms, obtained the
subpoena through an open records request and shared it with The
Wall Street Journal.
Amazon declined to comment. A spokeswoman for Mr. Tong said the
company has cooperated with the subpoena.
Connecticut has previously taken interest in the e-book
business. In 2012, the U.S. Justice Department alleged in a civil
antitrust lawsuit that five major publishers and Apple Inc. had
worked together to raise e-book prices. Connecticut, along with
Texas, led a similar legal effort by a group of states.
"Our office continues to aggressively monitor this market to
protect fair competition for consumers, authors, and other e-book
retailers," Mr. Tong said in a statement.
The publishers cited in Connecticut's Amazon subpoena include
HarperCollins Publishers, which like The Wall Street Journal is
owned by News Corp; Lagardere SCA's Hachette Book Group; Penguin
Random House, a unit of closely held German media company
Bertelsmann SE; Simon & Schuster, the book publishing arm of
ViacomCBS Inc.; and Macmillan. Penguin Random House has agreed to
acquire Simon & Schuster, pending regulatory approval.
All the publishers cited in the subpoena declined to
The Connecticut investigation is one of several ongoing probes
into the Seattle-based company's market power. In October, the
House Antitrust Subcommittee completed a 16-month investigation
into Amazon and other technology companies, concluding that Amazon
has amassed "monopoly power" over sellers on its site.
The U.S. Justice Department in 2019 launched a broad
investigation of the market power of large technology companies
including Amazon, and the Federal Trade Commission has oversight of
Amazon as part of a broader look into the business practices of big
tech companies. In addition to Connecticut, investigators from
California are looking into Amazon's business practices, the
Journal has reported.
Amazon is the dominant U.S. e-book retailer, accounting for 76%
of digital books sold in the U.S. in September, according to Codex
Group LLC, a book audience research firm. Rival sellers of digital
books include Apple, Alphabet Inc.'s Google and Barnes &
The e-book market has been controversial for years. Amazon
kick-started the business when it introduced its Kindle e-reader in
November 2007, a launch that offered digital bestsellers for $9.99.
The discounted offering helped Amazon build market share, but
publishers believed it hurt the industry.
A few years later, Apple entered the business as it launched the
iPad, with deals that allowed publishers to set the retail prices
of their books. That upended the old model, where publishers let
retailers set prices for consumers, and effectively blocked
discounting without publishers' approval.
The Justice Department subsequently filed its civil antitrust
suit against Apple and five major publishers. The publishers
settled. Apple went to trial but lost.
Write to Jeffrey A. Trachtenberg at email@example.com
and Dana Mattioli at firstname.lastname@example.org
(END) Dow Jones Newswires
January 13, 2021 18:57 ET (23:57 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.