So far, the fines have been solidly in the "acceptable cost of doing business" category. If anything, the fines are at least an order of magnitude too small.
For a sense of scale, VW North-America (~38B) is of a comparable revenue to Amazon EU (~44B). But the VW emissions scandal cost them almost a full years of that revenue, ... and they're not leaving the market. (In general, US fines are much higher than EU fines, BTW). Don't forget that such fines are generally unlikely to be levied very frequently because court battles are drawn out and law enforcement has limited resources too. Additionally, specifically in the EU (but also partially in the US) there's the issue that enforcement is fractured across states, so it's easier for a corp like this to absorb the occasional loss - had this fine been scaled for the entire EU, not just Italy, the cost might have been significant, but alas. Additionally, while punitive damages in civil litigation are obviously problematic, they do address real issues that (AFAIK, IANAL) the EU (an it's member states) doesn't have a real answer for - which makes rules-breaking less disincentivized. Finally, fines that are related to past revenue and disregard stock price and current revenue and growth are likely in any case to have less impact in shaping behavior in rapidly growing sectors (as in sectors with huge profit margins) - and amazon's EU business is rapidly growing.
If the aim of enforcement is to at the very least ensure a change in behavior, and, failing that, to actually fine a company out of business, then EU fines need to be much, much higher. Given how rarely they're levied, the extreme delay in collection, and how small they are, I kind of doubt they're enough to really trigger the kind of behavior you'd want - namely that large corps actually follow the rules right off the bat, and not just after years of being able to essentially manipulate the market into whatever shape they like.
Also keep in mind it takes year, but often the EU courts don't allow these nonsensical fines. The media doesn't usually post the appeals year later where this is lowered to 1/10th the size or thrown out.
Italian and most politicians love this to show they are doing something, instead of the hard work to define out working standards that actually help online e-commerce for small to medium sized business.
It's more appropriate to say that the EU is pro-competition. They don't care as much about free markets than about competition as means to an end. If there is not enough competition in the market, they often deliberately change the rules to create more.
It's not about strong vs weak governance. It's just that the US government represents the 401ks invested in the FAANGs, as well as the FAANG employees, and the european governments represent the people that the FAANGs offer services for.
If us-east-1 going down for about 24 hours costs Amazon $1.3+ billion, wouldn't that make the yearly revenue of that region something like $475 billion? I think that's like AWS and Amazon yearly revenues put together.
Rarely they change behavior of companies, because fines are still peanuts compared to profit they gain by this.. so not really getting your comment.. they are relatively so small we cannot even call them fines.
Empirically, we know that is not true. Some legislation embodies bad ideas.
China - alleged communists - have outperformed the EU at creating a viable software industry. Regardless of the arguments about what approaches are good and bad, there is pretty evidence that whatever "good" means, Europe is struggling to achieve it.
Fines are designed to disincentivize the cost of doing "illegal" business. It's not an insult, but comes across quite capitalistic to not consider the difference.
Considering those companies are American and the US doesn't really have a concept of nudging a company onto the righteous path via relatively small fines, we might see a lot more fines coming up. The US takes a different approach and imposes heavy fines from right the beginning.
Those warning shots from EU counties could very well be interpreted differently than they were meant to be.
A billion is nothing for Amazon. They'll barely feel it. It's not even a slap on the wrist - more like waving an index finger snd saying "behave or else".
This is not true. A billion hurts - it’s many people’s bonuses, etc. Amazon is all about margins, they’re fighting teeth and nails for
saving money wherever they can. Their efficiency comes from the fact that everything matters to them, and a billion absolutely does matter.
I am as much with you as anyone to fine the tech companies but knowing Italy and how corrupt the bureaucrats are there including from their highest level of government to lowest petty officers, I find it a bit hypocritical. OK so Amazon has dominance but over who? Italy has become such a pariah country after last financial crisis I would be surprised if no one even wants to do business there. Italian government of course will oblige, they will happily see their people rot and suffer as they have done over last 20yrs. Ask any of the Italian diaspora, there is not a single thing positive that has happened there in last 10-15yrs. Aside from the Pope.
Pariah country? Ask any large diaspora, and they will readily tell you bad things about their country of origin. That's often why they migrated.
I agree that when it comes to IT, Italy doesn't perform like California, New York state, the UK, the Netherlands, the Scandinavian countries and a few other US or European states or countries. Notice how all those states and countries have English as the official language or a very strong second language.
But Italy has lots of other great achievements in industries areas like culture, food, tourism, and in more traditional heavy industries like car manufacturing, trains, etc.
Companies who want to operate in a country have to follow that country's laws and stick by that country's regulations. That's why Apple have to make islands appear bigger than they are for China reasons.
US companies can't just operate the same as they do in the US in other countries where people seem to have more protection from malpractice than in the US. Certainly from the outside looking in.
The US can only take measures in the US on EU companies that are breaking US law and/or regulations. It's not tit for tat like tariffs which are clearly arbitrary.
If the US were to profit from Amazon's extraction of wealth in Italy, I could see where you're coming from. But do they? It's not like Amazon takes the Italian money and builds roads in the US or something.
I get that emotions are high when we discuss Amazon, but the article seems to imply that they were fined for not adding the "Prime" badge to items that were not fulfilled by Amazon (i.e. that didn't use Amazon warehouses).
Frankly I don't see why that's a problem, the Prime badge is for one-day or two day shipping item. If the seller is not using Amazon for their logistics then they simply can't guarantee the time window so they don't add a prime badge?
From a customer point of view it would make for a worse shopping experience if Prime items weren't fulfilled by Amazon
The article states "The authority said Amazon tied to the use of FBA access to a set of exclusive benefits, including the Prime label, that help increase visibility and boost sales on Amazon.it"
That last part is the relevant part: either you use FBA or you loose visibility/sales. That combined with the dominant position of Amazon seems, from a layman perspective, a textbook case of abuse of market dominance.
Fully transparent that this is just from a quick search, and maybe a degree separate from this, but I kinda didn't know Seller Fulfilled Prime was ever a thing (not accepting registrations now though?).
I would have to look back through my order history, legit I thought prime was always fulfilled by amazon, and that was how they could guarantee the shipping process. But amazon's page even talks about why FBA might not be right for your products (too bulky large etc., i.e. whatever isn't efficient for amazon to store/distribute). But then amazon probably was not content to say "that entire class of products cannot be Prime".
So my view to this was, amazon is selling a product (FBA) and part of what you get is use of the Prime label. But, certainly willing to cede being mistaken if that is not the case.
Amazon planned to enable Prime for Dropshippers working directly for Amazon (called Direct Fulfillment nowadays I think) and 3rd party sellers. It's a bitch to qualify for, so. Because the same performance thresholds apply for those third parties as they do for Amazon's own FCs and 3PLs, and those are strict.
> Frankly I don't see why that's a problem, the Prime badge is for one-day or two day shipping item.
Europe countryside here: I get 3+ days delivery for Prime items regularly (not all the time, especially not in summer since I live in a touristic place and we get city-like Prime deliveries in August) but Prime <= 2 days delivery is not a written rule at all.
You can guarantee it, but you're asking Amazon to guarantee it on your behalf, which they don't want to do, because they don't know that you can keep your promises.
Then the "get it by" date will reflect that and if people want to pay for your one/two-day shipping they can.
Shipping is also free on prime items if you are a prime member so the same general idea applies, Amazon is doing what's right for their customers here, the prime badge takes its value from their fulfillment service that is still stellar compared to everything else.
I'm italian, but I don't really understand the case. As far as I can understand reading italian news, no one was forced to subscribe to Prime program. Of course Prime program is linked to Amazon logistic and subscribing to Prime program force to seller to use Amazon logistic, but I think this is part of the conditions to subscribe to it and it's just a business model.
I guess, and it's just a guess knowing how Amazon is treated in Italy [0], italian retail companies had something to do with this fine.
> no one was forced to subscribe to Prime program.
When I search amazon as a user "prime" products get preferential treatment. There is even a filter for it in Amazons otherwise catastrophically bad search UI, there is no way to filter for prime like properties like free shipping or fast delivery, the only way to look for them is by selecting Amazon prime (TM).
The part that the market authority seems to have based their decision on is that the Prime label increases visibility on Amazon.
By making a particular logistics company a requirement for the Prime label, Amazon's dominant market position raises sales for that logistics company. So far this isn't really debatable, what matters is whether this is an unfair use of Amazon's market dominance.
That wasn't the case when Amazon Logistic didn't exist in Italy, at the time Prime orders were simply shipped using the italian couriers (SDA, GLS, BRT).
The Italian retail sector (i.e., small local shops) is ripe for disruption. The shops pretty much just buy from wholesalers and provide some local inventory in the shop. This usually comes with a high markup. Competition is highly regulated (e.g., sales can only happen during a certain time window each year, most places have a cap on the maximum discount, returns are close to non-existent). I am not sure what other value they add to the retail experience beyond maybe having a relationship with the shopkeeper and going in to shoot the shit while buying stuff.
I'm not surprised that something like Amazon is able to disrupt the system. Even my parents have started buying stuff on Amazon instead of going to the store and they barely use a credit card.
I'm also not surprised that the retail guild/cartel is pushing back through legal means. It will be interesting to see what will happen. My guess is that the Italian consumer will end up losing at the end and will have to pay more for stuff from Amazon.
At a higher level, I believe what we're seeing with these cases, is the nationalization of giant corporations under the umbrella of their "home" governments, and thus, the malignment of these corporations by foreign governments.
It's about power. It's about the inherent misalignment of corporate and government power structures in a world where the US established a "western" free-market system, and now that system is becoming more and more aligned with national governments. Initially through national spy programs, but now more generally in the broader economic landscape.
As such, we see the Chinese forcing companies to headquarter and list their stocks in China (taking HK was a key part in facilitating that). We see Russia force Russians to use Russian social media. We see Europe punishing large US corporations financially to help grow their own competitors.
The longer term result is more segregated power structures. There will also be a pressure to bring smaller nations into these corporate-government power structures, and thus large nations will want to amalgamate neighboring smaller states into their unified system.
This is one big reason why China will likely re-take Taiwan in our lifetime, and Russia will likely (at least try) to fold in Ukraine into its system.
I’m pretty sure it’s all about $. How much tax Amazon pays Italy. Italy can then disperse some of that to provinces to reduce tax burden on local retailers - who’ve taken a beating after Primes rollout.
Doesn't seem this will hold any ground if Amazon decides to fight it...
FBA products have a clear competitive advantage: free shipping for Prime customers, fast and reliable shippings, easy returns, a networks of lockers so you don't have to wait for the package at home (in Italy packages have to be handed to a person, they can't be left in the front yard unattended).
Marketplace products have longer and unreliable shippings, you need to pay extra even if you are Prime customer, customer services is usually subpar, customer protection is inferior and so on...
There's not an abuse, they offer a better service, they get better business.
I disagree with you here. I live in Poland which has a very popular e-commerce website known as Allegro.pl - it's very similar to Amazon. It has its own version of Prime which is known as Allegro Smart which provides benefits such as free shipping and easy returns. A seller that wants to make their products have Smart badge don't have to use Allegro's own delivery method (Allegro One). The requirements for a Smart badge are as follows:
- have at least 5 positive reviews
- at least 98% rating (if their deliveries are slow, they shouldn't expect a high rating from customers)
- passing Allegro transaction identifier to a delivery service
- they have to provide at least one of the following parcel delivery services as a delivery method: Poczta Polska (which is owned by government), DPD or UPS
Amazon forces third-party sellers to use Fulfilment by Amazon in order to have Prime badge, something that a very similar service doesn't do.
While I'm not sure this ruling is good, your argument is making it a bit too easy. Amazon does not naturally "provide better service" that others can't.
> free shipping for Prime customers
could be offered by sellers using other fulfillment too
> fast and reliable shippings
Not something only Amazon logistics are capable of
> easy returns
Not something only Amazon logistics are capable of (at least here in Germany, they just give you a label to put it in the normal postal system, as do most retailers)
> a networks of lockers so you don't have to wait for the package at home
That one is tricky. Although I guess the market dominance argument could still be used to say "well, your problem to figure out how to solve that, it's not absolutely impossible to let others ship stuff to those too"
For the first three, the pro-Amazon argument is of course that if third-parties do parts of it, Amazon has a hard time ensuring and monitoring quality of service, which is a problem for a "premium" product that's supposedly all about that - and which is popular because of a reputation to delivering on that, and it's unfairly harsh to go after that.
(The obvious fix of course would be for Amazon to not do fulfillment for third parties in Italy - if they are not in that market, they can't be accused of distorting it. If that'd be better overall for customers and sellers though? The theory behind the competition law says yes, at least short-term many might disagree)
> Not something only Amazon logistics are capable of
Yet something Amazon logistics consistently does better than others. It is not uncommon for non-FBA sellers to ship directly from China and evem if they ship from Europe they are practically never as fast as Amazon.
> > easy returns
> Not something only Amazon logistics are capable of (at least here in Germany, they just give you a label to put it in the normal postal system, as do most retailers)
Others may be capable of but will they? With Amazon logistics its just a couple of clicks and then you get a QR code to show when you drop of you package at your local post office - no need to even print anything yourself anymore. Sometimes they will just refund without requiring a return at all. And you can rely on getting the refund within a reasonable amount of time without having to haunt the seller about the status. With some random seller who knows what you will get - and you certainly won't know that until you have to go through with it.
I'm not saying Amazon shold not receive fines. But for now I keep using Amazon desite all their problems because, as a buyer, you do get a better, and equally important, consistent service when it comes to fulfilment.
> The obvious fix of course would be for Amazon to not do fulfillment for third parties in Italy
I wish they would do that everywhere. There are other platforms where you can connect with random sellers if Amazon does not have what you want in their warehouses.
>> a networks of lockers so you don't have to wait for the package at home
> That one is tricky. Although I guess the market dominance argument could still be used to say "well, your problem to figure out how to solve that, it's not absolutely impossible to let others ship stuff to those too"
Poste Italiane (the national postal service) has those kind of lockers as well AFAIK, plus offices in every town where you can collect the packages (OK, that's probably not an advantage given how slow they are and the big queues you have to do each time).
Sure it does not naturally provide a better service, but does the better service this come from its dominance position or dominance is a consequence of that?
I mean marketplace vendors could offer the same level of service customer expect from the Prime label products and Prime would lose its competitive advantage.
You work under the impression that Italian laws, and the justice system that enacts them, are a set of coherent and logical measures defined to make life better for consumers and businesses.
As an Italian, let me assure you that it's a naive assumption. The country literally invented civil litigation 2000 years ago, they can go on arguing pretty much forever if they want to.
... But isn't this FBA <> free Prime shipping relation the point that the CMA of Italy believes to be problematic?
I understand the CMA's point from a markets perspective: why would / could the relation between the customer and a different seller impact the prices of shipping for a different seller on the same platform? Prime is primarily a transaction between the customer and Amazon [the shop], for cheaper products and free shipping for their products; allowing it to impact the customer<>seller relationship of third parties could be considered illegal bundling.
The 3rd party seller opts into this bundling as a benefit to offer their customers, though, right? No one is forcing seller X to use FBA or Amazon’s platform at all; they’re doing it because customers prefer it now that they see what’s possible.
To me (in the US), Prime was magical when it first rolled out. It lowered the friction and raised my expectations for online commerce in general. When other players followed suit, my life got even better. Now, someone charging $20 to get me a package “maybe next week; you’ll get it when you get it” is wildly uncompetitive rather than being the accepted standard.
FBA only exists because market dominance makes FBA style shipping arrangements profitable. Without Amazon's scale and marketplace dominance, that shipping and pricing doesn't work.
Market dominance exists because they offer a better service to the customer. It's not like Amazon has always existed in Italy and always had a dominance position. They gathered their position because they offer a better experience and people are willing to pay a premium for that.
Lots of people here are missing the point. I read things like "it's a bit fine compared to the business in Italy etc etc"
We don't know much about the reason, but for sure this fine is not for a point in time issue, it's measure are taking considering a large timespan (usually 4/5 years) and similar fines have been give to other companies considering the same factor (mostly for tax evasion)
So, if Amazon was wrongdoing for 5 years, the $1.3B fine is accounting that timespan which means around 250 million dollar per year.
Is the Italian market even worth 1.1b mid-term? I might have a skewed estimate since Amazon is "really small" in Sweden, but that is a LOT of money considering it's 1.1B lost profits and not turnover.
There is a fourth option, that is them retreating from handling logistics for Italian sales only.
TBH the most realistic option is something around 3: pay fines, change nothing (maybe rais prices a bit), make noise to get consumers on its side (Italians disproportionately like Amazon, because of its no-question-asked policy on returns is an absolute rarity there), wait for a friendly government to fix things in its favour.
I don't want to go down the rabbit hole that is politics, but Italian usually don't benefit from "more tax money', the government is not very good at handling money
I don't think we know yet, as Amazon EU did not report per-country in 2020 according to a quick search; but the total revenue was 44bn, and the biggest EU markets are always disproportionately Germany, France, and Italy, so I would expect Italy-sourced revenues to be in the 5-10bn per year.
Since it became available here it became the de-facto standard for online purchases, most people don't even look at other marketplaces now and are often willing to pay more just because the order is coming from Amazon (even when it's a 3rd party seller)
Amazons behaviour for which it was fined is not unique to Italy. It behaves the same in almost every country, but it's only Italy that is doing something against it.
The time when Amazon was something new and exciting and good for consumers is long gone. Now it's a monopoly that abuses its market power to stifle competition, and something needs to be done about it.
If other countries would follow the suit, e.g. Germany and France, which are much bigger markets, and in the end USA, or at least some US states, Amazon would be hit hard.
The law needs to be the same for all, and since "with great power comes great responsibility" even harder for those with much more power.
EDIT: Besides, Amazon in Europe is after accused to be responsible for tax evasion. This is a frequent topic in politics, but unfortunately only before elections. After elections, it gets forgotten and nothing is done about it until next elections.
a) They will appeal in Italy.
b) Then they will appeal in Europe.
So I guess it will take quite a while for this to really impact Amazon's wallet. Meanwhile they can invest in order to have this money ready when (*if*) they lose.
Readit News
Tech companies are getting fined so often in the EU recently that it seems we're seeing a new article about a 9+ digit fine every other week.
For a sense of scale, VW North-America (~38B) is of a comparable revenue to Amazon EU (~44B). But the VW emissions scandal cost them almost a full years of that revenue, ... and they're not leaving the market. (In general, US fines are much higher than EU fines, BTW). Don't forget that such fines are generally unlikely to be levied very frequently because court battles are drawn out and law enforcement has limited resources too. Additionally, specifically in the EU (but also partially in the US) there's the issue that enforcement is fractured across states, so it's easier for a corp like this to absorb the occasional loss - had this fine been scaled for the entire EU, not just Italy, the cost might have been significant, but alas. Additionally, while punitive damages in civil litigation are obviously problematic, they do address real issues that (AFAIK, IANAL) the EU (an it's member states) doesn't have a real answer for - which makes rules-breaking less disincentivized. Finally, fines that are related to past revenue and disregard stock price and current revenue and growth are likely in any case to have less impact in shaping behavior in rapidly growing sectors (as in sectors with huge profit margins) - and amazon's EU business is rapidly growing.
If the aim of enforcement is to at the very least ensure a change in behavior, and, failing that, to actually fine a company out of business, then EU fines need to be much, much higher. Given how rarely they're levied, the extreme delay in collection, and how small they are, I kind of doubt they're enough to really trigger the kind of behavior you'd want - namely that large corps actually follow the rules right off the bat, and not just after years of being able to essentially manipulate the market into whatever shape they like.
Italian and most politicians love this to show they are doing something, instead of the hard work to define out working standards that actually help online e-commerce for small to medium sized business.
Uber tried to make the rules in Europe: they failed.
Europe has a stronger governance then in the US. And yes, it's a pro-market governance.
One of the main points is that Amazon cannot have private deals, de facto monopolizing the business of logistic.
1. That fine mention in this article 2. The outage that happened in AWS US-East-1 region earlier this week
Companies who host on AWS don't care that the retail arm abuses its market position, they care about reliability.
Rarely they change behavior of companies, because fines are still peanuts compared to profit they gain by this.. so not really getting your comment.. they are relatively so small we cannot even call them fines.
Empirically, we know that is not true. Some legislation embodies bad ideas.
China - alleged communists - have outperformed the EU at creating a viable software industry. Regardless of the arguments about what approaches are good and bad, there is pretty evidence that whatever "good" means, Europe is struggling to achieve it.
Those warning shots from EU counties could very well be interpreted differently than they were meant to be.
They took a massive loss on that fine so it’s way more than a finger wave. Please put some effort into justifying your statements.
In all seriousness, is it documented anywhere where these fines end up and who exactly benefits from them?
I agree that when it comes to IT, Italy doesn't perform like California, New York state, the UK, the Netherlands, the Scandinavian countries and a few other US or European states or countries. Notice how all those states and countries have English as the official language or a very strong second language.
But Italy has lots of other great achievements in industries areas like culture, food, tourism, and in more traditional heavy industries like car manufacturing, trains, etc.
It's like tariffs - just another form of protectionism.
Companies who want to operate in a country have to follow that country's laws and stick by that country's regulations. That's why Apple have to make islands appear bigger than they are for China reasons.
US companies can't just operate the same as they do in the US in other countries where people seem to have more protection from malpractice than in the US. Certainly from the outside looking in.
The US can only take measures in the US on EU companies that are breaking US law and/or regulations. It's not tit for tat like tariffs which are clearly arbitrary.
https://en.m.wikipedia.org/wiki/Merchant_Marine_Act_of_1920
Which ones?
Deleted Comment
Frankly I don't see why that's a problem, the Prime badge is for one-day or two day shipping item. If the seller is not using Amazon for their logistics then they simply can't guarantee the time window so they don't add a prime badge?
From a customer point of view it would make for a worse shopping experience if Prime items weren't fulfilled by Amazon
That last part is the relevant part: either you use FBA or you loose visibility/sales. That combined with the dominant position of Amazon seems, from a layman perspective, a textbook case of abuse of market dominance.
I would have to look back through my order history, legit I thought prime was always fulfilled by amazon, and that was how they could guarantee the shipping process. But amazon's page even talks about why FBA might not be right for your products (too bulky large etc., i.e. whatever isn't efficient for amazon to store/distribute). But then amazon probably was not content to say "that entire class of products cannot be Prime".
So my view to this was, amazon is selling a product (FBA) and part of what you get is use of the Prime label. But, certainly willing to cede being mistaken if that is not the case.
Europe countryside here: I get 3+ days delivery for Prime items regularly (not all the time, especially not in summer since I live in a touristic place and we get city-like Prime deliveries in August) but Prime <= 2 days delivery is not a written rule at all.
Shipping is also free on prime items if you are a prime member so the same general idea applies, Amazon is doing what's right for their customers here, the prime badge takes its value from their fulfillment service that is still stellar compared to everything else.
I guess, and it's just a guess knowing how Amazon is treated in Italy [0], italian retail companies had something to do with this fine.
[0] https://messaggeroveneto.gelocal.it/udine/cronaca/2021/06/13...
When I search amazon as a user "prime" products get preferential treatment. There is even a filter for it in Amazons otherwise catastrophically bad search UI, there is no way to filter for prime like properties like free shipping or fast delivery, the only way to look for them is by selecting Amazon prime (TM).
By making a particular logistics company a requirement for the Prime label, Amazon's dominant market position raises sales for that logistics company. So far this isn't really debatable, what matters is whether this is an unfair use of Amazon's market dominance.
I'm not surprised that something like Amazon is able to disrupt the system. Even my parents have started buying stuff on Amazon instead of going to the store and they barely use a credit card.
I'm also not surprised that the retail guild/cartel is pushing back through legal means. It will be interesting to see what will happen. My guess is that the Italian consumer will end up losing at the end and will have to pay more for stuff from Amazon.
It's about power. It's about the inherent misalignment of corporate and government power structures in a world where the US established a "western" free-market system, and now that system is becoming more and more aligned with national governments. Initially through national spy programs, but now more generally in the broader economic landscape.
As such, we see the Chinese forcing companies to headquarter and list their stocks in China (taking HK was a key part in facilitating that). We see Russia force Russians to use Russian social media. We see Europe punishing large US corporations financially to help grow their own competitors.
The longer term result is more segregated power structures. There will also be a pressure to bring smaller nations into these corporate-government power structures, and thus large nations will want to amalgamate neighboring smaller states into their unified system.
This is one big reason why China will likely re-take Taiwan in our lifetime, and Russia will likely (at least try) to fold in Ukraine into its system.
FBA products have a clear competitive advantage: free shipping for Prime customers, fast and reliable shippings, easy returns, a networks of lockers so you don't have to wait for the package at home (in Italy packages have to be handed to a person, they can't be left in the front yard unattended).
Marketplace products have longer and unreliable shippings, you need to pay extra even if you are Prime customer, customer services is usually subpar, customer protection is inferior and so on...
There's not an abuse, they offer a better service, they get better business.
- have at least 5 positive reviews
- at least 98% rating (if their deliveries are slow, they shouldn't expect a high rating from customers)
- passing Allegro transaction identifier to a delivery service
- they have to provide at least one of the following parcel delivery services as a delivery method: Poczta Polska (which is owned by government), DPD or UPS
Amazon forces third-party sellers to use Fulfilment by Amazon in order to have Prime badge, something that a very similar service doesn't do.
> free shipping for Prime customers
could be offered by sellers using other fulfillment too
> fast and reliable shippings
Not something only Amazon logistics are capable of
> easy returns
Not something only Amazon logistics are capable of (at least here in Germany, they just give you a label to put it in the normal postal system, as do most retailers)
> a networks of lockers so you don't have to wait for the package at home
That one is tricky. Although I guess the market dominance argument could still be used to say "well, your problem to figure out how to solve that, it's not absolutely impossible to let others ship stuff to those too"
For the first three, the pro-Amazon argument is of course that if third-parties do parts of it, Amazon has a hard time ensuring and monitoring quality of service, which is a problem for a "premium" product that's supposedly all about that - and which is popular because of a reputation to delivering on that, and it's unfairly harsh to go after that.
(The obvious fix of course would be for Amazon to not do fulfillment for third parties in Italy - if they are not in that market, they can't be accused of distorting it. If that'd be better overall for customers and sellers though? The theory behind the competition law says yes, at least short-term many might disagree)
> Not something only Amazon logistics are capable of
Yet something Amazon logistics consistently does better than others. It is not uncommon for non-FBA sellers to ship directly from China and evem if they ship from Europe they are practically never as fast as Amazon.
> > easy returns
> Not something only Amazon logistics are capable of (at least here in Germany, they just give you a label to put it in the normal postal system, as do most retailers)
Others may be capable of but will they? With Amazon logistics its just a couple of clicks and then you get a QR code to show when you drop of you package at your local post office - no need to even print anything yourself anymore. Sometimes they will just refund without requiring a return at all. And you can rely on getting the refund within a reasonable amount of time without having to haunt the seller about the status. With some random seller who knows what you will get - and you certainly won't know that until you have to go through with it.
I'm not saying Amazon shold not receive fines. But for now I keep using Amazon desite all their problems because, as a buyer, you do get a better, and equally important, consistent service when it comes to fulfilment.
> The obvious fix of course would be for Amazon to not do fulfillment for third parties in Italy
I wish they would do that everywhere. There are other platforms where you can connect with random sellers if Amazon does not have what you want in their warehouses.
> That one is tricky. Although I guess the market dominance argument could still be used to say "well, your problem to figure out how to solve that, it's not absolutely impossible to let others ship stuff to those too"
Poste Italiane (the national postal service) has those kind of lockers as well AFAIK, plus offices in every town where you can collect the packages (OK, that's probably not an advantage given how slow they are and the big queues you have to do each time).
I mean marketplace vendors could offer the same level of service customer expect from the Prime label products and Prime would lose its competitive advantage.
As an Italian, let me assure you that it's a naive assumption. The country literally invented civil litigation 2000 years ago, they can go on arguing pretty much forever if they want to.
I understand the CMA's point from a markets perspective: why would / could the relation between the customer and a different seller impact the prices of shipping for a different seller on the same platform? Prime is primarily a transaction between the customer and Amazon [the shop], for cheaper products and free shipping for their products; allowing it to impact the customer<>seller relationship of third parties could be considered illegal bundling.
To me (in the US), Prime was magical when it first rolled out. It lowered the friction and raised my expectations for online commerce in general. When other players followed suit, my life got even better. Now, someone charging $20 to get me a package “maybe next week; you’ll get it when you get it” is wildly uncompetitive rather than being the accepted standard.
Thats not your decision, or amazon's. The end customer should be deciding what service is better
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We don't know much about the reason, but for sure this fine is not for a point in time issue, it's measure are taking considering a large timespan (usually 4/5 years) and similar fines have been give to other companies considering the same factor (mostly for tax evasion)
So, if Amazon was wrongdoing for 5 years, the $1.3B fine is accounting that timespan which means around 250 million dollar per year.
1. Stop doing what it's doing now and become fair and transparent, at least in Italy
2. Move out of Italian market
3. Keep paying even increasing fines and change nothing
In all those cases consumers in Italy would profit, either from fair market or from more tax money.
EDIT: formatting the list
TBH the most realistic option is something around 3: pay fines, change nothing (maybe rais prices a bit), make noise to get consumers on its side (Italians disproportionately like Amazon, because of its no-question-asked policy on returns is an absolute rarity there), wait for a friendly government to fix things in its favour.
> 2. Move out of Italian market
this would be a net negative all around. especially for consumers.
Since it became available here it became the de-facto standard for online purchases, most people don't even look at other marketplaces now and are often willing to pay more just because the order is coming from Amazon (even when it's a 3rd party seller)
The time when Amazon was something new and exciting and good for consumers is long gone. Now it's a monopoly that abuses its market power to stifle competition, and something needs to be done about it.
If other countries would follow the suit, e.g. Germany and France, which are much bigger markets, and in the end USA, or at least some US states, Amazon would be hit hard.
The law needs to be the same for all, and since "with great power comes great responsibility" even harder for those with much more power.
EDIT: Besides, Amazon in Europe is after accused to be responsible for tax evasion. This is a frequent topic in politics, but unfortunately only before elections. After elections, it gets forgotten and nothing is done about it until next elections.
a) They will appeal in Italy. b) Then they will appeal in Europe.
So I guess it will take quite a while for this to really impact Amazon's wallet. Meanwhile they can invest in order to have this money ready when (*if*) they lose.