Connecticut Attorney General Calls Amazon and Apple 'Anticompetitive"

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Richard Blumenthal, Attorney General of Connecticut, warned Amazon and Apple yesterday that he wants to have a little talk with them about their "anticompetitive" deals in the electronic publishing market.

In his letter , directed to Amazon's General Counsel, L. Michelle Wilson, Blumental warns that "Amazon's demand that the largest e-book publishers agree to provide Amazon with a 'guarantee' that no other competitor will obtain lower prices" is of concern due to its anticimpettive impact. Such price guarantees are sometimes referred to "most favored nation" (MFN) clauses . While not illegal under anti-trust laws, Blumenthal says they're not precisely legal either, and "have the potential to impair horizontal competition by encouraging coordinated pricing and discouraging discounting." A similar letter was sent to Apple. Both letters ask for a meeting with company executives regarding Blumenthal's concerns.

Under discussion are the MFN clauses Amazon and Apple have obtained with the largest book publishers, including Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster. In March, Apple threatened to stop selling the books of some publishers in order to pressure the publishers to make such arrangements.

In June, the Attorney General of Texas launched an investigation based on similar concerns regarding the MFN clauses.