Amazon slapped with $1.3 billion antitrust fine in Italy

[Polycount]

A hot potato: It isn't uncommon for Amazon to find itself embroiled in an antitrust investigation or even be fined by regulators and lawmakers across the globe. However, it is uncommon for tech giants to be fined an amount that actually has any meaningful impact on their bottom line -- that's why today's news is interesting. Amazon has reportedly been fined a whopping 1.13 billion euros in Italy for allegedly abusing its market dominance.

As Reuters reports, Amazon did this through the heavy-handed promotion of its "Fulfilment by Amazon" (FBA) service, which provides sellers with many useful benefits. Examples include (but aren't limited to) storage, packing, and shipping services, as well as Amazon-provided customer service. More importantly, FBA allows sellers to slap the ever-desirable "Prime" label on their listings, which, according to Italy, dramatically boosts visibility and thus sales.

In other words, if a seller wants to use Amazon's platform, they are heavily incentivized to use FBA. This allows Amazon to take an extra bite out of an item's sale price in exchange for the convenience of using FBA, which obviously adds to the platform's overall income quite substantially.

Many of our readers can probably attest to the effectiveness of Prime labeling. Speaking for myself, my family and my friends, the number of non-Prime items we've purchased over the past year can probably be counted on two hands. The convenience of faster shipping is just too juicy for many consumers to pass up.

In Italy's view, disallowing non-FBA third-party sellers' use of the Prime label constitutes a breach of its antitrust rules and has thus levied a $1.3 billion fine against the retail giant. Naturally, Amazon is none too pleased with this verdict and is already planning to appeal it.

"When sellers choose FBA, they do so because it is efficient, convenient and competitive in terms of price," Amazon reportedly said. "The proposed fines and remedies are unjustified and disproportionate." The company adds that FBA is not required to sell on the platform -- indeed, most third-party sellers don't use it at all. Whether or not those sellers are as successful as the ones that do is another story.

We'll let you know if Amazon successfully appeals Italy's ruling, but we have our doubts. The company's political and legal pull isn't as strong in non-US countries, and Italy's antitrust authority isn't the only party investigating Amazon for similar issues. The EU has two open antitrust cases of its own and reportedly collaborated with Italy here.

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https://www.techspot.com/news/92572-amazon-slapped-13-billion-antitrust-fine-italy.html

 

[Sausagemeat]

We will all be pleased to hear news like this but if Amazon pulled out of your country you’d miss it.

 

[MaestroIT]

1 billion for Amazon is nothing with its 1.7 trillion market cap

 

[Mr Majestyk]

We will all be pleased to hear news like this but if Amazon pulled out of your country you’d miss it.

Not in Australia we wouldn't. Prices are a joke. Amazon said they would shake up online shopping in Australia and instead it's been a farce. Usually the most expensive, with the slowest shipping and 70% of the items you want aren't even in Australia and have to come from Amazon US but the prices are often over 2x the US price.

 

[Neatfeatguy]

I find that items filled by amazon tend to come in the worst packaging. Items are tossed in the cheapest, most ineffective packaging possible just to try and save a few pennies.

I've returned everything that's come FBA in the past few years at least once, sometimes two or even three times until someone actually packages the item properly so it doesn't get damaged during transit.

Items I get from non-FBA purchases always come better packaged. Maybe it's just dumb luck on my part, but that's what I've been seeing over the years.

I've had such issues with poorly packaged products through Amazon that I've just said, "F it." Filed a claim for a refund and purchased items from local stores, even if it means paying a higher price, because I know the item I'm getting isn't poorly packaged and handled as it travels across the states and gets to my front door.

 

[Uncle Al]

Amazon is nothing like the old days. Now their prices tend to be higher than the big box stores, their quality is truly pathetic, and they can't meet a deadline to save their life. I recently bought a large aquarium that indicated on the page it was new. When it arrived and was unpacked there was a hole in the front but no debris inside indicating it has been repacked so I returned it. Now, they did a good job on the return but when I wrote up the fact that it came from their used warehouse rather than being new as indicated, they deleted the review. What more needs be said ... they are just a higher class of crook.

 

[nodfor]

Amazon is nothing like the old days. Now their prices tend to be higher than the big box stores, their quality is truly pathetic, and they can't meet a deadline to save their life. I recently bought a large aquarium that indicated on the page it was new. When it arrived and was unpacked there was a hole in the front but no debris inside indicating it has been repacked so I returned it. Now, they did a good job on the return but when I wrote up the fact that it came from their used warehouse rather than being new as indicated, they deleted the review. What more needs be said ... they are just a higher class of crook.

If the review was posted on the item page it makes sense to delete it - an item shouldn't get a low rating because the shipped item wasn't new - that is the seller's fault, not the manufacturer's.

 

[Mr Majestyk]

I find that items filled by amazon tend to come in the worst packaging. Items are tossed in the cheapest, most ineffective packaging possible just to try and save a few pennies.

I've returned everything that's come FBA in the past few years at least once, sometimes two or even three times until someone actually packages the item properly so it doesn't get damaged during transit.

Items I get from non-FBA purchases always come better packaged. Maybe it's just dumb luck on my part, but that's what I've been seeing over the years.

I've had such issues with poorly packaged products through Amazon that I've just said, "F it." Filed a claim for a refund and purchased items from local stores, even if it means paying a higher price, because I know the item I'm getting isn't poorly packaged and handled as it travels across the states and gets to my front door.

Yes Amazon packaging is a total joke, it's actually showing contempt for the customer. Zero f#ck$ given at all. Boxes always banged up and no bubble wrap, air-pillows or the like often.

 

[passwordistaco]

I'm not a cheerleader for Amazon, but how are they going to be able to designate an item to have "Prime" availability if they don't control the inventory and shipping? This ruling doesn't make sense.

 

[Uncle Al]

If the review was posted on the item page it makes sense to delete it - an item shouldn't get a low rating because the shipped item wasn't new - that is the seller's fault, not the manufacturer's.

I agree but let's remember that the Amazon page is the sellers to control and the fact that this product was re-sold by Amazon, they deserve to have their conduct spotlighted so prospective buyers know the difference between "new" and "Resold".

 

[Avro Arrow]

To really make a dent, EVERY country in the EU needs to do this or more.

I absolutely hate Amazon. I have purchased ONE item from them in the past five years. It was my current video card and it was only because it's an XFX model that was $90 less expensive than the ASRock at Canada Computers.
Under normal circumstances (because being THAT much less expensive isn't normal), I don't even look at Amazon. The way that they treat their employees is disgusting and nobody who is able-bodied NEEDS to deal with them. Those that do either don't know about their working conditions or are just too self-centred to care.

If I want to order something obscure online, I use eBay like I did for my IBM Model M keyboard. Otherwise, I use newegg or CanadaComputers if what I'm looking for isn't in stores. Sure, quite often the pics on eBay, newegg and CC are great but it's always better to be see what you're buying before you buy it. I've heard too many stories about scams on these sites and I'd really rather avoid using them when possible.

Then, to make things even worse, there's this:
CBC Marketplace : Hidden cameras and secret trackers reveal where Amazon returns end up
Here's a card that I'd love to give to Amazon's CEO:

 

[fb020997]

Here in Italy, Amazon has usually good prices, and the absolute best warranty/returns service, so it’s used by many. Also, at least me and most of my acquaintances, tend to buy things that are at least shipped via Amazon, because many couriers (UPS, SDA, GLS, etc, at least in the north-east of Italy where I live) either say that I wasn’t at home or similar BS or straight up say that my address doesn’t exist, but then 2-3 days later I receive the packages. Why shouldn’t use a service like that (packages shipped directly via Amazon)?

 

[tellmewhy]

The products show higher on list because are more competitive with the sooner and cheaper shipment so because of that buyers vote them with their clicks and the algorithm promote them even more and a circle of positive feedback appears.

The fact that Amazon naturally charges something for the shipment is irrelevant.

The government maybe are upset because in many countries the major mails and packages shipment companies are in public sector. But to that not Amazon's fault.

 

[wiyosaya]

Amazon allegedly abuses its market dominance

Allegedly? Hmmm. Sounds like a statement from an alternate reality.

 

[captaincranky]

As weird and unbelievable as this may sound to all you naysayers, I've been getting superb service from Amazon in my area, (SE PA USA). Everything has been packed just fine, and delivered without a scratch, and many days ahead of their original estimate.

I think they've condensed the Prime and standard shipments into the same truck in any given route.

I stopped a driver one time to ask if he had my package. He told me, "it might be on the other truck". Sure enough, there were two trucks running the same route at the same time.

 

[captaincranky]

To really make a dent, EVERY country in the EU needs to do this or more.

I absolutely hate Amazon. I have purchased ONE item from them in the past five years. It was my current video card and it was only because it's an XFX model that was $90 less expensive than the ASRock at Canada Computers.
Under normal circumstances (because being THAT much less expensive isn't normal), I don't even look at Amazon. The way that they treat their employees is disgusting and nobody who is able-bodied NEEDS to deal with them. Those that do either don't know about their working conditions or are just too self-centred to care.

If I want to order something obscure online, I use eBay like I did for my IBM Model M keyboard. Otherwise, I use newegg or CanadaComputers if what I'm looking for isn't in stores. Sure, quite often the pics on eBay, newegg and CC are great but it's always better to be see what you're buying before you buy it. I've heard too many stories about scams on these sites and I'd really rather avoid using them when possible.

Then, to make things even worse, there's this:
CBC Marketplace : Hidden cameras and secret trackers reveal where Amazon returns end up
Here's a card that I'd love to give to Amazon's CEO:

Dude, that's harsh.

I will grant you that I'm probably in a much better location than you, with respect to shipping lanes and availability.

I also have many vendors nearby, and plenty of time to waste on competitive shopping.

One interesting thing I've found, is that Walmart and Amazon likely have thousands of bots online, and cross shop and price match one another's sites, "hourly" (maybe).

BTW, the only (almost) genuine bargains I've found being manufactured on the north American continent, are Seagull guitars, (Canada), along with Fender and Taylor, whom both have factories directly across the US Mexico border. In fact, Taylor's US factory is only about 20 miles or so from the Mexican factory, and the US product starts at somewhere double the "andale" axes.

 

[BuckarooBonzaii]

Being that Italy is in the EU and things are shared and balanced, Italy see's Amazon as as a Goliath Capitalist Company as a threat to the EU's way of life.

 

[wujj123456]

On one hand, it's very obvious Amazon unfairly features FBA listing in expense of all FBM listing. They go as far as removing the "Buy" button even when there are third party listing available. This removes price on search page and buyers has to click a not-so-obvious link before they can find how to buy. It's a big loss of sale, just because it's not FBA. That's beyond reasonable ranking behavior based on buyer preference, but really unfair practice.

"This allows Amazon to take an extra bite out of an item's sale price in exchange for the convenience of using FBA."

On the other hand, the above quote is totally not true. FBA commissions are exactly same as FBM, just with fulfillment fee on top: https://sellercentral.amazon.com/gp/help/external/GPDC3KPYAGDTVDJP. The fees are very competitive. Unless you are a big enough shipper that can negotiate price, I doubt you can get anywhere close. When I use FBA, I totally choose to do that because it's "efficient, convenient and competitive in terms of price". The buyers can get the item much faster and it's also cheaper for small seller like me while I don't have to worry about shipping, packaging or even customer service. A win-win.

I feel the right balance is to define the standards of "Prime" experience for customer. If a seller can meet that standard, they should be eligible for the same label, whether they are using FBA or not.

 

[Underdog]

I can't really comment on how Amazon screws their FBA sellers but as a buyer I have mostly negative feelings for Amazon. In my area (NW France) courier deliveries are pretty hit or miss but Amazon's stuff always arrives either on time or a day early, well packed. That is the only "up" side. I find their website is a dreadfully confusing and misleading abortion. Many of my friends won't use Amazon at all after being totally confused by it. The aggressive push to get everyone to sign up for Prime. Making the opt out option hard to spot at the bottom of the page. The last time I tried to buy something when I got to the last page of checkout it announced they were signing me up for the free trial of Prime (after I had specifically refused the offer on the previous page). I spent quite some time trying to make a complaint to customer service but achieved nothing apart from a pleasant conversation about Hinduism and the Bhagavad Gita. Amazon could take a lesson from ebay when it comes to setting up a website. On ebay I can set many filters on my search that gets me right to the correct item at the right price, even choices about where the seller is. Amazon is the worst site for setting accurate search filters, even worse than Aliexpress.

 

[Avro Arrow]

Dude, that's harsh.

No, the way Amazon treats its employees is harsh. Costco proves very well that it's not necessary to do that.

I will grant you that I'm probably in a much better location than you, with respect to shipping lanes and availability.

Probably not. I live in a major city. The surrounding area is also so heavily populated that there are almost 8 million people inside a 30-minute drive radius. I can get anything at any time.

I also have many vendors nearby, and plenty of time to waste on competitive shopping.

Yes, so do I. That's why I have no use whatsoever for Amazon. I wouldn't have use for Amazon if I lived in the sticks either because I'd just do what I did before Amazon came along.

One interesting thing I've found, is that Walmart and Amazon likely have thousands of bots online, and cross shop and price match one another's sites, "hourly" (maybe).

That doesn't surprise me at all.

BTW, the only (almost) genuine bargains I've found being manufactured on the north American continent, are Seagull guitars, (Canada), along with Fender and Taylor, whom both have factories directly across the US Mexico border. In fact, Taylor's US factory is only about 20 miles or so from the Mexican factory, and the US product starts at somewhere double the "andale" axes.

I agree with you. However, it's not just JUST Seagull that are an incredible deal (although they definitely are), ALL of the guitars made by Godin are bargains, including Seagull. Interesting to note that the Seagull S6 is same guitar as the Simon & Patrick Woodland Cedar. I actually checked them out with their materials and measurements. I don't know if you like jazz guitars but the Godin Montreal Premiere LTD in "Desert Blue" makes me drool:

Impeccable construction and materials with TV Jones pickups and a real Bigsby. A store near me has one for the astonishingly low price of only $2,500CAD (brand-new).

If I could play well enough to justify paying that for a guitar, I'd own it today.