NEWSLETTER-2017

133 COMPETITION LAW Amazon’s Business Model Amazon applies an agency model with regard to the sale of e- books. In the relevant model, the prices of the e-books are determined by the publishers, and Amazon receives a commission from the estab- lished prices of the e-books that are sold 5 . The Approved Commitments The below listed commitments will apply for a period of 5 years and to any e-book in any language distributed by Amazon in the EEA. Firstly, Amazon will not enforce the MFN clauses or any such clauses requiring publishers to inform Amazon about such terms and conditions. The commitments cover, in particular, provisions related to alternative/new business models, release dates and catalogues of e-books, features of e-books, promotions, agency prices, agency com- missions and wholesale prices. Secondly, Amazon will allow publishers to terminate e-book con- tracts that contain a clause linking discount amounts for e-books to the retail price of a given e-book on a competing platform (so-called Discount Pool Provision). The Discount Pool Provision is a pool of credits provided to Amazon to allow it to discount agency prices (i.e. the prices at which Amazon sells on behalf of publishers) for e-books supplied on the Amazon platform. The size of the allowable discount pool was linked to the difference between the agency prices set by the publishers for its e-books on the Amazon platform, as well as the agency or reseller prices set for the same books on competing e-book platforms 6 . Thirdly, Amazon will not place MFN clauses and Discount Pool Provisions in its new agreements. 5 Competition Authority’s Bookingcom Decision dated 05.01.2017 and numbered 17-01/12-4. 6 http://www.blplaw.com/expert-legal-insights/articles/european-commissions-e- commerce-agenda-continues-apace (Access Date: 15.06.2017)