The European Union's antitrust watchdog said the Seattle-based company includes clauses in its contracts that "require publishers to inform Amazon about more favorable or alternative terms offered to Amazon's competitors" and to "ensure that Amazon is offered terms at least as good as those for its competitors."
The EU said it will look into whether those clauses keep its competitors from developing new products and "whether such clauses may limit competition between different e-book distributors."
Amazon is the latest American tech company to be investigated by European lawmakers, joining Facebook, Apple and Google. European authorities had already launched a separate investigation into Amazon's tax practices in Luxembourg, home to its European headquarters.
"We’re not actually targeting US companies – we don't have a geographic bias," EU antitrust chief Margrethe Vestager said in an interview with Bloomberg on Thursday. "This just reflects that there are many strong companies in the US that influence the digital market elsewhere."
Vestager, who took office in November, cautioned that just because the EU launched an investigation does not mean that Amazon is at fault.
In a statement, Amazon said it is "confident that our agreements with publishers are legal and in the best interests of readers" adding that the company will "cooperate fully during this process."
Amazon is now the largest distributor of e-books in Europe. The company helped pioneer the market with the introduction of the Kindle device in 2007.
Estimates show that Amazon sells about eight out of every 10 e-books in Britain. In Germany, the company sells just under half. In the United States, Amazon owns an estimated two-thirds of the e-book market.
