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Connecticut is investigating Amazon’s e-book business



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

The investigation is investigating whether Amazon has been involved in anti-competitive behavior in the e-book business 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 related to its deals with five of the largest book publishers in the United States, according to a summons issued in 201

9. The Technology Transparency Project, a non-profit organization that investigates technology platforms, received a summons through an open request for the recordings and shared it with The Wall Street Journal.

Amazon declined to comment. A spokesman for Mr Tong said the company had cooperated in the summons.

Before that, Connecticut was interested in the e-book business. In 2012, the U.S. Department of Justice claimed in a civil antitrust lawsuit that five major publishers and Apple Inc. have worked together to raise ebook prices. Connecticut, along with Texas, has led similar legal efforts from a group of states.

“Our office continues to monitor this market aggressively to protect fair competition for consumers, authors and other e-book retailers,” Mr Tong said in a statement.

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

All publishers quoted in the summons declined to comment.

The Connecticut investigation is one of several investigations into the company’s market power in Seattle. In October, the House of Antitrust Subcommittee completed a 16-month investigation into Amazon and other technology companies, concluding that Amazon had gained “monopoly power” over its site’s vendors.

In 2019, the US Department of Justice launched a broad investigation into the market power of large technology companies, including Amazon, and the Federal Trade Commission controls Amazon as part of a broader view of the business practices of large technology companies. In addition to Connecticut, investigators from California are also investigating Amazon’s business practices, the newspaper reported.

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Amazon is the dominant e-book retailer in the United States, accounting for 76 percent of digital books sold in the United States in September, according to Codex Group LLC, a book audience research firm. Competitive digital book vendors include Apple, Google and Barnes & Noble of Alphabet Inc.

The e-book market has been controversial for years. Amazon started the business when it introduced its Kindle e-reader in November 2007, a launch that offered digital bestsellers for $ 9.99. The discounted offer helped Amazon build market share, but publishers believed it harmed the industry.

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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 replaced the old model where publishers allowed retailers to set prices for consumers and effectively blocked discounts without publishers’ approval.

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Subsequently, the Ministry of Justice filed its civil antitrust lawsuit against Apple and five major publishers. The publishers settled down. Apple went to trial, but lost.

Write to Jeffrey A. Trachtenberg at jeffrey.trachtenberg@wsj.com and Dana Matioli at dana.mattioli@wsj.com


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