Audible and Apple end exclusivity agreement after EC probe

Audible and Apple end exclusivity agreement after EC probe

Audible and Apple have agreed to end their exclusivity agreement for audiobooks following a European Commission (EC) probe.

The two companies had an exclusivity agreement whereby Apple could only source audiobooks from Amazon's Audible business and Audible could not supply other music digital platforms with the content besides Apple's iTunes store.

The German Booksellers Association filed a complaint about the practice, along with other concerns, to the EC and German antitrust authorities in November 2015 alleging the contract amounted to an abuse of Audible’s dominant position in the German audiobook market, where it has a 90% market share. The EC then began its investigation.

Today (19th January), the EC welcomed Amazon and Apple’s decision to abandon the exclusivity agreement earlier this month, saying it would encourage greater competition in the audiobook market.

A spokesperson for the EC said: “The European Commission welcomes an agreement to end all exclusivity obligations concerning audiobook supply and distribution between Amazon's subsidiary Audible and Apple.

“The removal of these exclusivity obligations will allow for further competition in a fast growing and innovative market and allow European consumers broader access to downloadable audiobooks.”

The European Federation of International Booksellers (EIBF) has also welcomed the decision. Its co-presidents Jean-Luc Treutenaere and Fabian Paagman said in a statement: "Booksellers have always been in favour of a vibrant and competitive environment which is good both for businesses and for consumers. The audiobook market is a very promising one and the possibility that more players can offer audiobooks on the market in level playing field conditions is excellent news."

A spokesperson for Audible said that as a result of the ending of the exclusivity agreement the EC and the FCO will be closing their files on their investigation.

"We look forward to continuing to offer customers our unmatched selection of hundreds of thousands of audiobooks in the Apple iTunes store, and to working with our many content providers and audio partners to continue to create the powerful listening experiences that meaningfully enrich daily life for our customers and our customers to come," they said.

Apple has declined to comment.

The EC worked closely with the German Federal Cartel Office on the investigation, which has also welcomed the move today.

At the time of the complaint in November 2015, Alexander Skipis, the head of the German Book Trade body, said: “The business model of Amazon and Audible is aimed at destroying the excellent book trade structure in Germany. These companies are avowedly on the way to establish a monopoly.”

The exclusivity agreement predated Amazon’s acquisition of Audible in 2008.

In June 2015, the EC also launched a probe into the way Amazon distributes e-books and its relationship with publishers, particularly focusing on contract clauses that "require publishers to inform Amazon about more favourable or alternative terms offered to Amazon's competitors” otherwise known as ‘Most Favoured Nation’ (MFN) clauses.