January 21, 2015 / 12:17 AM / 4 years ago

Canada competition watchdog seeks records from Indigo, Kobo

TORONTO/OTTAWA (Reuters) - Canada’s Competition Bureau said on Tuesday it has asked for records from Indigo Books and Music Inc (IDG.TO), the country’s biggest bookstore chain, as part of a probe into alleged anti-competitive practices in the e-book market.

An Indigo Books and Music store is seen on Sainte Catherine Street in downtown Montreal, February 8, 2011. REUTERS/Shaun Best

The competition watchdog said it sought a court order last week to compel Indigo and Japanese e-reader maker Kobo Inc to turn over “certain records” relevant to the investigation. Kobo is owned by Tokyo-based ecommerce company Rakuten Inc (4755.T).

“Indigo is not the subject of the bureau’s ongoing investigation,” the bureau said in a statement. “At this time, the bureau’s investigation is focused on Penguin, Kobo and other market participants.”

The bureau, which also filed an order to obtain records from Penguin last year, said there is no conclusion of wrongdoing by Indigo, Kobo or Penguin at this time. Indigo spokeswoman Janet Eger said the retailer was aware of the investigation into the e-book industry.

The bureau, an independent law enforcement agency, has been investigating concerns that major e-book publishers were engaging in anti-competitive conduct that restricted retail price competition for e-books in Canada.

Last February it reached a consent agreement with four publishers that would see the companies remove or amend clauses in their distribution agreements with individual e-book retailers.

The companies were Hachette Book Group, HarperCollins, Macmillan and Simon & Schuster.

However, the agreement has been suspended while the Competition Tribunal, an adjudicative body, considers a challenge filed by Kobo over the agreement.

Kobo said it was “astonished” by the latest developments and ascertained that only those who challenged the bureau’s previous settlements with publishers were being singled out “for this particularly onerous process.”

“Kobo maintains that there has been no violation of the Competition Act by it or by any of the publishers and is confident that the Tribunal will come to the same conclusion,” Kobo president Michael Tamblyn said in a statement.

Reporting by Euan Rocha and Leah Schnurr; Editing by Jeffrey Hodgson and Gunna Dickson

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