Amazon fined €1.13bn by Italy's antitrust authorities for abusing its power
- Reference: 1639118164
- News link: https://www.theregister.co.uk/2021/12/10/amazon_fined_italy/
- Source link:
The ecommerce giant offers to pack, ship, and deliver goods sold by third-party vendors under its [1]Fulfillment by Amazon (FBA) platform. Sellers only have to send their products to an Amazon warehouse, and its workers will handle everything else from there. Although the service is handy, it cuts into their profits.
FBA costs anywhere from $0.99 per item to $39.99 per month to process an unlimited number of orders in the US. Amazon also charges a referral fee that ranges from eight to 15 per cent on items, as well as any extra storage costs too. Vendors that cough up for FBA receive certain privileges that others do not, according to Italian authorities Autorità Garante della Concorrenza e del Mercato (AGCM).
[2]
Their products are included in Amazon’s Prime category, and are promoted more. Sellers that don’t use FBA are excluded from deals during large online sales events, such as Black Friday, Cyber Monday, or Prime Day. Other non-Amazon logistic services aren’t offered and aren’t integrated with the site, making it difficult for third-party vendors to seek other options.
[3]
“Amazon harmed competing e-commerce logistics operators, preventing them from presenting themselves to online sellers as providers of services of comparable quality to Amazon’s FBA and thus capable of ensuring high visibility on Amazon.it,” AGCM [4]said in a statement.
“Such a conduct widened the gap between Amazon’s market power and its competitors’ also in the delivery of e-commerce parcels.”
[5]Apple, Amazon fined to the tune of €200m for colluding over Beats headphones sales
[6]Google loses appeal against $2.7bn EU antitrust fine for distorting competition in price comparison websites
[7]Euro watchdog will try to extract $900m from Amazon for breaking data privacy laws
[8]Singaporean regulator punishes biggest-ever data breach: Almost 5.9 million hotel customers' info exposed
“As a result of the abuse, competing marketplaces have also been damaged: because of the cost of duplicating warehouses, sellers who adopt Amazon's logistics are discouraged from offering their products on other online platforms, at least with a product range as wide as that on Amazon.it. The Authority regarded Amazon’s abusive strategy as particularly serious and, considering its seriousness, its duration, the effects already produced and the size of the Group, decided to impose a fine.”
The €1.13bn sanction is one of the largest fines to be issued to Amazon from a European country yet. Amazon is planning to appeal the decision, [9]according to the Wall Street Journal. The Register has asked the company for comment. ®
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[1] https://sell.amazon.com/pricing
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YbMzZbOUZGu-wlkZgLAyTgAAANM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/legal&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YbMzZbOUZGu-wlkZgLAyTgAAANM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://en.agcm.it/en/media/press-releases/2021/12/A528
[5] https://www.theregister.com/2021/11/24/apple_amazon_italy/
[6] https://www.theregister.com/2021/11/10/google_shopping_ecj/
[7] https://www.theregister.com/2021/07/30/amazon_european_privacy_fine/
[8] https://www.theregister.com/2021/11/18/redoorz_fined_for_massive_data_leak/
[9] https://www.wsj.com/articles/amazon-fined-1-3-billion-in-italian-antitrust-case-11639043714
[10] https://whitepapers.theregister.com/
Hey Amazon!
As they say in the classics; “suffer in ya jocks”
seems a long and complicated dtory that could have been explained easier for those that dont know the ins and outs of the behind the svcenes architecure of the amazon enterprise.
I knew there were third party sellers
I knew the third party sellers used the warehouse and delivery system - i thought that was the point.
I didnt know there were third party sellers that didnt use the ware house - and these sellers are being treated less well than the ones that use warehouse?
"these sellers are being treated less well than the ones that use warehouse?"
Exaclty. Third party seller can sell on Amazon but then deliver using other logistics services. The problem is exactly that those sellers then are treated as "second-class" ones without access to selling features that could increase sales.
Classic case of a "monopolist" that uses one of its business to boost another of its.
Amazon claims to be a neutral sales platform to third-party sellers. Originally, if you wanted to sell there, they’d list you, process the payment, take a cut of your sale price, raise the orders to you and then you would handle order fulfilment yourself.
Then Amazon started to offer its own fulfilment as an option to business. That meant that you sent your stock to an Amazon warehouse, and they did the shipment (and took another cut of the selling price for the privilege).
That’s perfectly legitimate: a business can choose to have Amazon as their fulfilment service or not. Where it becomes a problem is that Amazon won’t fulfil orders that are not generated on Amazon’s sales site, so you have to maintain a separate fulfilment operation if you operate your own website or sell through other channels.
You’d think that this restriction of “only Amazon orders fulfilled” would make Amazon fulfilment unattractive to sellers with existing sales channels in place, and obviously so did Amazon, so that’s why it stepped over the line of what’s legal, and started limiting its promotional services, search placement and advertising campaigns on the on-line sales platform only to sellers who were also paying Amazon to fulfil the orders. That’s a classic case of anti-trust activity: using leverage in one market to remove competition in another.
Amazon is a store
Don't understand.
If you don't want to use Amazon because they charge too much, use their own courier networks or whatever then don't. Set up your own web site and do the other thing.
When Amazon stops you setting up that web site or uses it's market presence to undermine your trading structure *outside Amazon* then it is anti-competitive behaviour. What seems to be happening here is based on complaints around how Amazon works and charges internally. Traders could just walk away if they could do better.
Re: Amazon is a store
"Traders could just walk away if they could do better"
Problem is the masses have been drawn into a mindset that says "I'll just look on Amazon/eBay", so the little/medium guy, even some big guys, are being pushed out of the market because they are either not on Amazon/eBay or only have a minor presence because they haven't signed up to full package
Google & co don't help because the tat bazaars tend to be pushed to the top of their listings, even when you are searching for something other than to purchase that object
Re: Amazon is a store
Yes, I can see you don't understand, if monopoly is too hard a game for you, I think you should try another easier to understand news sourcel like cbeebies.
Re: Amazon is a store
Forcing customers to buy another of your services when they only want to have one is an anti-competitive practice. And yes, as it happens, "forcing" does not exclusively mean putting a gun to their heads. Reducing their visibility during major sales to reduce their turnover also counts.
Good point.
At least with such a fine, the Italian authorities got the attention of Amazon. That's the good way to do it.
Good to see
Good to see that monopolistic business practices start getting more attention. It might be in some cases 'too little too late', as the damage to many retailers is already done many years ago, but you have to start somewhere, and fines in the billions are at least noticeable and will get some attention.
Now, to dedicate more and more resources and power for regulators, as the entities they regulate become ever more massive. And give the appeal courts the right to increase fines for frivolous appeals