Bureau Disfavours E-Book Publishers’ Most Favoured Nations Clauses

Today, the Competition Bureau (the "Bureau") announced that it entered into a Consent Agreement (the "Agreement") with e-book publishers Hachette Book Group, HarperCollins, MacMillan, and Simon & Shuster (collectively "e-book publishers"). Under the terms of the Agreement, the e-book publishers are required to remove/amend clauses in their distribution agreements that restrict the ability of e-book retailers to offer discounts to consumers.

The Agreement follows the Bureau's 18-month investigation into the Canadian e-book industry. Based on its investigation, the Bureau concluded that the agreements in question contravened the competitor collaboration provisions of  the Competition Act (section 90.1).  Specifically, the Agreement alleges that that the e-book publishers had used most favoured nation clauses ("MFNs") to effectively prohibit retailers from offering discounts to customers, with the effect that competition in the e-book market had been substantially