EU anti-trust chief warns Amazon, wary about telecom mergers

[June 15, 2015]  By Foo Yun Chee and Jean-Baptiste Vey

PARIS (Reuters) - Europe's anti-trust chief warned Amazon on Monday against using its dominance to thwart rivals, a week after launching an investigation into the U.S. online retailer's ebook deals with publishers.

European Competition Commissioner Margrethe Vestager announced last week she would examine whether clauses in Amazon's contracts prevent publishers from offering more favorable deals to competitors.

Ebooks are a fast-growing industry and Amazon, which popularized the product, is Europe's biggest player. However, it should not abuse its market dominance, Vestager said.

"Amazon should not use its strong position to close the door behind it and prevent companies with new ideas from contesting the market," she told a conference.

The company could be fined up to 10 percent of its global turnover if found guilty of breaching EU rules.
 

The investigation is one of two against Amazon. It is also in the European Commission's crosshairs for deals with Luxembourg which allow it to pay extremely low taxes.

The EU competition authority is investigating whether the case gives Amazon an unfair advantage.

Vestager also said she was wary of too many mergers in the telecoms sector, warning that consumers could end up with higher bills and less innovative companies.

"Incumbent operators argue that if they cannot merge with their rivals in the same country they will be unable to increase their investment. I've heard this claim quite often, but I have not seen evidence that this is the case," she said.
 

"Instead, there is ample evidence that excessive consolidation may lead not only to less competition and more expensive bills for consumers, but that it also reduces the incentives in national markets to innovate."

Vestager's comments come as she scrutinizes a proposal by Norwegian telecoms company Telenor and Swedish peer TeliaSonera to combine their Danish mobile businesses.

She has already expressed concerns the deal may lead to higher prices.

A bigger deal is expected to land on her desk in the coming months: Hutchison Whampoa's bid to become Britain's biggest operator by buying Telefonica's British business, O2 UK, for 10.3 billion pounds ($16 billion).

(Editing by David Clarke)

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