Connecticut Investigates Amazon’s eBook Activity

Connecticut is actively investigating how Amazon.com Inc. sells and distributes digital books, according to the state attorney general, the latest of several state and federal investigations into the tech giant’s business practices.

The investigation is examining whether Amazon has engaged in anti-competitive behavior in the e-book industry through its agreements with certain publishers, Connecticut Attorney General William Tong said in a statement.

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Connecticut has asked Amazon to provide documents relating to its dealings with five of America’s largest book publishers, according to a summons issued in 2019. The Tech Transparency Project, a nonprofit that investigates technology platforms , obtained the subpoena through an open application for registration and shared it with the Wall Street Journal.

Amazon declined to comment. A spokeswoman for Mr. Tong said the company had cooperated with the summons.

Connecticut has previously been interested in e-commerce. In 2012, the US Department of Justice alleged in an antitrust civil action that five major publishers and Apple Inc. had worked together to raise the prices of eBooks. Connecticut, along with Texas, has 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,” Tong said in a statement.

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Publishers named in Amazon’s Connecticut subpoena include HarperCollins Publishers, which, like the Wall Street Journal, is owned by News Corp; Groupe Hachette Book of Lagardere SCA; Penguin Random House, a unit of German media company Bertelsmann SE; Simon & Schuster, the book publishing division of ViacomCBS Inc .; and Macmillan. Penguin Random House has agreed to acquire Simon & Schuster, pending regulatory approval.

All editors named in the subpoena declined to comment.

The Connecticut investigation is one of several ongoing investigations into the Seattle-based company’s market power. In October, the House antitrust subcommittee completed a 16-month investigation of Amazon and other tech companies, concluding that Amazon had accumulated “monopoly power” over sellers on its site.

The US Department of Justice launched a massive investigation into the market power of big tech companies, including Amazon, in 2019, and the Federal Trade Commission oversaw Amazon as part of a broader review of the business practices of big tech companies. . In addition to Connecticut, investigators in California are studying Amazon’s business practices, the Journal reported.

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Amazon is the leading e-book retailer in the United States, accounting for 76% of e-books sold in the United States in September, according to Codex Group LLC, a book audience research company. Competitive sellers of digital books include Apple, Alphabet Inc.’s Google, and Barnes & Noble.

The eBook market has been controversial for years. Amazon kicked off the business by launching its Kindle e-reader in November 2007, a launch that offered digital bestsellers for $ 9.99. The discounted offering has helped Amazon gain market share, but publishers believe it’s hurting the industry.

A few years later, Apple entered the business by launching the iPad, with deals that allowed publishers to set retail prices for their books. This upset the old model, where publishers allowed retailers to set prices for consumers, and effectively blocked discounts without publisher approval.

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The Justice Department subsequently filed a civil antitrust action against Apple and five major publishers. The publishers have settled in. Apple was tried but lost.

Write to Jeffrey A. Trachtenberg at [email protected] and Dana Mattioli at [email protected]