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Connecticut is actively investigating how Amazon.com Inc. sells and distributes digital books, according to the state attorney general, the latest in several state and federal investigations into the technology giant’s business practices.
The investigation is examining whether Amazon has engaged in anti-competitive behavior in the e-book business through deals with certain publishers, Connecticut Attorney General William Tong said in a statement.
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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 organization that investigates technology platforms, obtained the subpoena by through an open records request and shared it with The Wall Street Journal.
Amazon declined to comment. A spokeswoman for Tong said the company had cooperated with the subpoena.
Connecticut was already interested in the e-book business. In 2012, the United States Department of Justice claimed in a civil antitrust lawsuit that five major publishers and Apple Inc. worked together to raise prices for e-books. 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 ebook retailers,” said Tong in a statement.
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The editors cited in the Connecticut subpoena on Amazon include HarperCollins Publishers, which like The Wall Street Journal is owned by News Corp; Lagardere SCA Hachette book group; Penguin Random House, a unit of the 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 editors cited in the subpoena declined to comment.
The Connecticut investigation is one of several ongoing investigations into the market power of the Seattle-based company. In October, the Chamber’s Antitrust Subcommittee completed a 16-month investigation into Amazon and other technology companies, concluding that Amazon has accumulated “monopoly power” over sellers on its website.
The U.S. Department of Justice in 2019 launched a broad investigation of the market power of major technology companies, including Amazon, and the Federal Trade Commission oversaw Amazon as part of a broader analysis of the business practices of major technology companies . In addition to Connecticut, California researchers are investigating Amazon’s business practices, the Journal reported.
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Amazon is the dominant e-book retailer in the United States, accounting for 76% of digital books sold in the United States in September, according to Codex Group LLC, a book audience research firm. Rival digital book sellers include Apple, Alphabet Inc. Google and Barnes & Noble.
The e-book market has been controversial for years. Amazon kick-started the business when it launched its Kindle e-reader in November 2007, a launch that offered digital bestsellers for $ 9.99. The discounted offer helped Amazon increase its market share, but publishers believed it hurt the industry.
| Ticker | Safety | Last | change | Change % |
|---|---|---|---|---|
| AMZN | AMAZON.COM INC. | 3,165.89 | +45.06 | + 1.44% |
A few years later, Apple entered the business when it launched the iPad, with deals that allowed publishers to set retail prices for their books. This overturned the old model, in which publishers allowed retailers to set prices for consumers and effectively blocked the discount without publisher approval.
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The Justice Department subsequently opened its civil antitrust lawsuit against Apple and five major publishers. The editors have established themselves. Apple went to trial, but lost.
Write to Jeffrey A. Trachtenberg at [email protected] and Dana Mattioli at [email protected]