Italy Fines Amazon $1.3 Billion for Abusing Its Market Position (techcrunch.com) 34
Italy's competition authority announced that it had fined Amazon roughly $1.3 billion at today's exchange rate. From a report: According to the antitrust watchdog, Amazon has abused its dominant market position and pushed third-party sellers to use the company's logistics service 'Fulfillment by Amazon' (FBA). The Italian authority, the Autorita Garante della Concorrenza e del Mercato (AGCM), details its thinking in a statement and a 250-page report. According to them, third-party sellers don't get the same treatment if they're leveraging FBA or using their own logistics stack. Sellers who take advantage of FBA can participate in the company's paid loyalty program Amazon Prime. Subscribers get free deliveries on some products. In addition to Amazon's own inventory, products from third-party sellers that come from Amazon's warehouses thanks to FBA also get a Prime label.
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If third party sellers are able to run their own logistics, then why do they need Amazon. As an online product catalog it seems. Isn't running a website the easy part of all this?
I wonder (Score:3, Interesting)
How many people does Amazon employ in Italy? Be a shame if something were to happen that forced them to pull out and leave all those employees jobless.
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Re: I wonder (Score:1)
Is that how they sell all those big corporation tax cuts and cash backs? Job losses? Cool.
Re: I wonder (Score:2)
It's starting to look like these countries are using big tech to supplement their coffers under the guise of them doing something "bad". Wonder which country will be next looking for a cash infusion of a billion or so.
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A quick google says they had revenue of around 7.5bn Euros in 2019. So this fine is quite hefty, but not enough that they would want to pull out of a lucrative and growing market.
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Can you clarify your point? Do you suggest Amazon should leave Italy as a retaliation? Or do you suggest big companies should not be fined if employing lots of people?
It is very unlikely that they leave any major country. They profit much more by dong business as usual and payign an occasional fine, than no business at all. Also, letting a competitor use Italy as their main base to make big profits so they can little by little compete with Amazon on other markets, would be a pretty bad move.
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How many people does Amazon employ in Italy? Be a shame if something were to happen that forced them to pull out and leave all those employees jobless.
It's almost as if you think that Amazon wasn't destroying jobs there, and that those jobs can never come back.
Call it a tax (Score:3)
It's one way to collect the money when outdated laws aren't working any longer. Now just need to add Facebook/Apple/Google to the list.
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The money isn't the most interesting thing here. They seem to be saying that being excluded from Prime because you use your own logistics is an issue. Or put another way, if the buyer has Prime they ought be able to use it with 3rd party sellers who would get the same cut they would have if they had used Fulfilled by Amazon, even if they used their own warehouse and delivery service.
That's potentially huge because it means more competition for Amazon's logistics stack, which could drive down prices. Right n
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I'm not sure the Italian authority is right here (Score:2)
Since they allow Amazon to feature other sellers, Amazon, as the store owner, can set its own rules, which include the fact that if you want to get a product featured first and covered with Prime shipping, you pay a higher commission.
As a consumer, I know that if I want something next day for free (due to my subscription obviously), Prime is my only option. If I can wait, I do look beyond Prime sellers - sellers usually make a separate slightly different entry of the same item so that they are not "hidden"
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I am curious if Amazon has different rules in Italy for what constitutes "Prime" shipping. I know someone who is a Amazon seller here in the US and they can list their items (which they ship out themselves) as being shipped "Prime" as long as they consistently ship them out on time and use a fast enough shipping speed.
Aaron Z
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To me "Prime" means it's the Amazon logistics system.
It's in the local warehouse ready to be shipped today, and likely arriving in a day or two. I've never had a third party Amazon seller match that.
I have had Walmart, Staples etc deliver next/same day.
I can't imagine any seller putting a next day delivery promise when they don't control the logistics platform.
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Apparently the stocking levels in my local warehouse doesn't match what I normally buy? The last few months I have been lucky to get stuff in 3-4 days.
Here are Amazon's requirements for "Seller Fulfilled Prime shipping" looks like they require 2 day shipping (order something on Monday, it must be delivered by Wednesday): https://sellercentral.amazon.c... [amazon.com]
The Amazon seller I know has them items in stock, they just have to pack and ship them out (which usually means packing shipments before gong to work for pi
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I look at it a little differently; from a logistics perspective, the fewer boxes a customer’s orders can be packaged in the more efficient every aspect of delivery will be. Less packaging material is needed, fewer package touches are needed, less sorting effort is required, and less space is required in the delivery vehicle. (Obvious caveat of if it is done right which Amazon kind of fails at in the US today.)
This is fundamental efficiency. Ultimately nobody else can compete with that efficiency.
Th
If they were honest (Score:2)
If they were more honest, they would be fining Amazon simply for HAVING a market position.
You'll note that none of the complaints listed are submitted by Amazon's CUSTOMERS. The people who WANT fulfillment by Amazon, and go out of there way to choose such vendors, to cut down on the bullshit involved with ordering stuff on-line, and to get prime, etc.
It's a case of Amazon doing the right thing by the customers, who, if they don't want what Amazon fulfillment is providing, can choose vendors who don't use i
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Customers are utterly irrelevant to whether a company is breaking the law or not.
Consumers demand Prime, not Amazon. (Score:2)
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However, with Prime - Amazon is supplementing the fulfillment costs for the sellers
Just to be clear - they might be supplementing, but the seller still pays for every prime shipment that Amazon ships out. Simply search for "FBA Fees". A bottle of vitamin D costs about 3.45 to ship, based on some updates I looked at yesterday.
A lot of people look at the yearly prime subscription cost (especially when it was half the current cost just years ago) and wonder how there is enough there to pay for all their "Free" 2 day shipments. There isn't.
Re: Consumers demand Prime, not Amazon. (Score:1)
FBA == scam (Score:3)
Amazon mixes stock so when you get shit FBA it might be counterfeit. Italy is home to a bunch of fashion brands which produce a substantial portion of Italian revenues [google.com] so they are highly motivated to curtail this activity. As long as Amazon mixes stock, FBA is bad for Italy, so they're motivated to deprecate it.
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Sellers can choose to commingle inventory or not, if they do not want to commingle, they need to set that option and buy their own barcodes from someone like GS1: https://www.gs1us.org/ [gs1us.org]
If everything works properly, Amazon then tracks their items for sale by the seller's barcodes, not by the manufacturer's barcodes.
Aaron Z
What an amazing array of posters - pro-monopoly (Score:2)
Let's see, how would I find a small vendor's website, and can I trust them? I know, I'll go to Big River, and buy their knockoffs of what the small vendor is selling.
And oh, yes, Italy is utterly dependent on Amazon. Even though Italy's in the EU, which is a larger market than the US, Amazon's going to pull out.
Right. Pro-crime, pro-monopoly posters. Are you getting paid to post this crap, or are you just suckers?
Sort of a reverse Panem et Circenses (Score:2)
Juvenal warned of what happened when the citizens of a democracy realized they could vote themselves Bread and Circuses to the ruin of the state.
In this case (as well as several EU examples) we have the power of the state recognizing it can plunder wealthy and successful business whenever they need a little walkin-around money.
Personally, if I was Bezos, I'd just apply a surcharge to all Italian-origin or -destination deliveries until the fine is made up. I mean, drastically, he could just refuse service t