Amazon, Apple End Exclusivity Deals for Audiobooks -- 2nd Update
January 19 2017 - 12:11PM
Dow Jones News
By Natalia Drozdiak
BRUSSELS-- Amazon.com Inc. and Apple Inc. have abolished
contractual obligations around the world that required the two
companies to supply and distribute audiobooks solely with each
other, under pressure from European Union antitrust regulators.
Germany's competition watchdog on Thursday dropped its formal
probe into the companies' arrangements, while the European
Commission, the bloc's antitrust regulator, which was also
scrutinizing the companies' arrangements, said it welcomed the
deal.
The so-called exclusivity obligations required Apple to source
audiobooks only from Amazon's Audible unit which, in turn, was
prevented from supplying its audiobooks to other digital platforms
besides Apple's iTunes store, the two regulators said.
"The exclusivity agreement affected the sales opportunities of
audiobook publishers since, apart from Audible, there were few
alternative purchasers available," said Andreas Mundt, head of
Germany's antitrust regulator, the Bundeskartellamt. Removing the
obligations "will enable a wider range of offer and lower prices
for consumers."
The agreement between two of the world's largest audiobook
distributors, which was struck Jan. 5, 2017 but only made public
Thursday, will likely "improve competition in downloadable
audiobook distribution in Europe," the European Commission
said.
An Audible spokesman confirmed the agreement with Apple which
applies to contracts around the world, and not only in Europe. "We
look forward to continuing to offer customers our unmatched
selection of hundreds of thousands of audiobooks in the Apple
iTunes store, and to working with our many content providers and
audio partners," he said. Apple declined to comment.
The move comes after Germany's competition watchdog in 2015
opened an investigation into the two companies' audiobook
arrangements following a complaint from the German Publishers and
Booksellers Association. The EU was also informally looking into
the matter based on a similar complaint from the publishers and
said it has closely cooperated with the German authorities in the
case.
"We very much welcome that the two companies have given up their
exclusivity agreement and that iTunes is open for other audiobook
providers," Alexander Skipis, head of the German Publishers and
Booksellers association, said.
The U.S.'s Audio Publishers Association also viewed the
agreement positively.
"Competition in the marketplace is always a good thing," said
Michele Cobb, executive director of the trade group, which has an
estimated 500 members.
"We're seeing more retailers selling audiobooks and coming to
market with different business models. This decision should help
that growth."
Separately, the European Commission continues to formally
investigate whether Amazon uses its market power to force illegal
terms on publishers that harm purchasers of electronic-books. The
EU and Amazon have been engaged in settlement talks in that case,
people familiar with the matter say.
Jeffrey A. Trachtenberg contributed to this article.
Write to Natalia Drozdiak at natalia.drozdiak@wsj.com
(END) Dow Jones Newswires
January 19, 2017 11:56 ET (16:56 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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