Italy fines Amazon record $1.3B for abuse of market dominance
reuters.com
reuters.com
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.
Those warning shots from EU counties could very well be interpreted differently than they were meant to be.
It's like tariffs - just another form of protectionism.
Which ones?
- BP: 35.5
- Volkswagen: 25.6
- Deutsche Bank: 18.3
- UBS: 16.8
- BNP: 12.1
- Nat West: 13.4
- Glaxo Smith Kline: 7.8
- Credit Suisse: 10.4
(in billions)
edit: formatting
As German, fine the fuck out of the corrupt people in Deutsche.
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.
And they do: https://www.bbc.com/news/business-28099694
No if we had a decent system for making the likes of Amazon, Facebook, Apple, et al, actually pay taxes in the countries they clearly do business in I think that would be better than one off fines, however big.
It was a quid-pro-quo system that started becoming imbalanced when EU failed to create competitive business in tech. But that is not USA's fault.
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.
Regulations reduce competition by raising the bar to entry and the unforeseen consequences of compliance.
So, regulations are necessary part of free markets. The question is what regulations are good and what regulations are bad.
There are empirical and game theoretical examples where regulations create better outcomes than nonviolent free market competition. There are games where the tragedy of the commons occur i.e. Nash equilibrium creates bad outcome [0]. This is also true in the real world e.g. collapse of the Atlantic northwest cod fishery.
[0] https://www.youtube.com/watch?v=6wNj9hOIt9g
[1] https://en.wikipedia.org/wiki/Collapse_of_the_Atlantic_north...
And free markets imply free people - slavery is the opposite of that.
Taxing externalities is also necessary, and it's tax, not a regulation. But that is something we're still working on, with little success it seems. See the carbon/pollution international issues with China, Russia, Australia.
Also, a simple tax can not solve the tragedy of the commons for fisheries as long as fishing will remain profitable. Nash equilibrium involving full exploitation remains as long as there is a profit. Fish are not an externality that can be reduced to avoid taxation, but the objective. While cap on fishing will work.
real world experience suggests the contrary is true.
What actions the US government took to "institute" Bell's monopoly?
Infrastructure is the usual example. If your company owns something like a cellular network or a local power grid, the EU requires that you let other businesses use it for a fair price to sell their services to customers. This regulation creates more competition and lowers the prices for customers, while simultaneously making businesses more efficient and less profitable.
Surely a marjet without competition, i.e. monopolised, is no longer free? Or what does 'free' mean?
it depends to whom you ask.
in the US, for a long time, anti-trust was kinda cozy with monopolies - they were accepted as the natural outcome of a free market: the most efficient solution.
In the EU there is more emphasis on market competition, and big monopolists are seen as problematic.
The same argument that justifies monopoly also justifies soviet-style central planning. It just changed the 'monopolist' in charge.
Do not confuse regulations made to fix even worse regulation with an actual healthy, competitive free market.
In Eastern Europe, after the fall of communism, people would lay Ethernet wire between apartment buildings to create ad-hoc communication networks. There were dozens of them. Today that is illegal and we only have a single Internet provider per city block.
This is literally wrong. OpenBanking only applies to the biggest banks and not little guys, and it allows little guys to access data stored in huge banks.
How does thay reduce competition? It reduces bar to entry
I can think of 10 startup banks like monzo and starling and have accounts in 4 of them, where is this lack of competition?
Is it also regulator's fault there is no competition in running water and sewer providers? In your world there is no such thing as capital requirements, barriers to entry, natural monopoly, all issues are summed as 'regulation = bad"
And I think at least in the cases I observed it hasn't fixed the 'problem' either.
"We will back your participation in this "competition" only as long as your participation furthers our preconceived objectives about how the world and society and economy should work."
It stems from the idea that being an FTE at one place for a long time (and not really having any class mobility) is a good and decent thing to encourage for most of your society. Stability above upside.
It's the root cause of why the USA has a startup culture and Europe does not.
It's fine if that is your belief, but to pretend that it's "competition" when they have their thumb on the scale tilting it toward a specific social ideology is a bit disingenuous.
The core idea is that we see the market as a means to an end, not some end in itself. When the market is incompatible with societal good, the market needs to change, not society.
A market by itself only optimizes for maximum profits for shareholders, at the expense of everything else. Often, you want your economy to optimize for different things, so you direct the market to support your goals.
It's the root cause why inequality is so much worse in the US, why you have a much bigger housing crisis, why health care in the US is such a mess, why there's homeless people everywhere etc etc.
I don't think a single part of this claim a) logically follows from the previous paragraphs, or b) is actually true.
For just one example: the housing crisis is a lack of supply, which is the result of the exact same kind of status-quo-maintaining, market-forces-secondary-to-regulatory-aims (NIMBYism by property owners and their representatives) thing you describe as being the European norm.
To say that these philosophical differences are the root cause of failures in very complex systems is of course the popular and prevailing European narrative about the USA. (There is another, equally popular and equally false (but self-congratulatory) one in Europe about gun violence in the USA.) I just don't see much evidence to substantiate it.
44% of the housing stock is in public ownership, two thirds of the population live in public housing. Rent is affordable and housing stock is of high quality.
Market forces would not have solved this, as there is very little profit to be made with low-cost housing - so the lack of housing was fixed by state intervention and Vienna has the highest quality of life in the world [1] as a result.
[1] https://www.independent.co.uk/travel/news-and-advice/vienna-...
I’m fairly certain that this is not correct.
The market was never an end to itself. Literally go back and read anywhere from Smith, Hume to Hayek. That is just a straw-men argument.
> When the market is incompatible with societal good, the market needs to change, not society.
And who and how is it determined, what the social good is? Are bureaucrats loosely connected to politicians loosely connected to voters a better an more reliable form of social preference allocation then the price mechanism under the same law? Not by any existing evidence in social science.
But the core of your argument is basically the government whenever it feels like it can just intervene in the market directly and put its finger on the scale. Not by fundamentally changing the rules, just be direct intervention whenever they don't like something. Often that is a foreign competitor and some vague hard to prove claims about market power. And often it is the citizens of that country that end up having higher prices or higher taxes. French book market being a good example.
Many times it has been shown historically that the monopolies far, far, far more often are government created then market created. And laws to establish 'fair competition' are usually strongly sponsored by the very competitors who get crushed in the market, often for good fundamental reasons.
The first Anti-Trust law in the US was by local butchers to prevent centralized butchers with refrigerated rail-cars. Would it really be 'fair competition' to give money to local butchers to prevent them from this 'unfair competition'. No, its how you get a stagnate economy depended on subsidies.
Very often its just governments doing what they want for the political clients that they have. French publishers, German news organization.
A perfect example is Germany where German Newspaper have fought tooth and nails for years against 'Google News' and basically want to monetize every link to their sites. This is all done in the name of 'fair competition' while introducing laws that are really the opposite and hurt user freedom in the process.
> It's the root cause why inequality is so much worse in the US, why you have a much bigger housing crisis, why health care in the US is such a mess, why there's homeless people everywhere etc etc.
If you think housing and health care are examples of 'free market fundamentalism' then you are very badly informed.
The EU is a single market consisting of many sovereign states. Sovereign states are naturally protectionist. Each member state wants to support domestic businesses over their rivals from other member states, but a single market can't work like that. To overcome these natural tendencies, the EU set up a regulatory environment that undermines the advantages established businesses have in their home markets, in order to allow businesses from other member states successfully compete against them.
That same attitude bleeds to dealings with businesses outside the single market. EU regulators see large profits and large market shares as signs of insufficient competition, and they see insufficient competition as something inherently negative.
Hard to quantify (well the authorities gave it a shot) how much the abuse garnered them, but governments tend to under-penalize rather than over-penalize corporations.
[0]: https://ycharts.com/companies/AMZN/revenues
[1]: https://www.macrotrends.net/stocks/charts/AMZN/amazon/revenu...
I was very careful to avoid writing income for that very reason, I did not say that it was their income -- I said they "made" that much, which they did, they made that much revenue. It's in the link itself as well. 1% of quarterly revenue is still not a lot to pay.
Income can also be a misleading indicator to watch -- if you're going to make a royalty deal for example you'd better do it on revenue, not income.
It is when your net margin is in single digits[1] (5% as of sept 2021, but has been as low as 1%).
[1] https://www.macrotrends.net/stocks/charts/AMZN/amazon/profit...
Until fines recur like revenue does it's a drop in the bucket.
This fine might not be that much in itself, but it sets the precedent, which makes fines in other countries more likely.
I do agree with you though, just like the australian news outlets fining FB+Google thing, governments are figuring out that international mega corps are also a good source of income by way of fines.
I fear that even this is also short sighted -- even when imposed by static fines like this, the 1.3B number looks huge, but what we can't see is whether it was actually economical for Amazon to do this (I think it was), and the thing is the companies that were destroyed as a result are much harder to re-create in an environment where Amazon still has the overwhelming amount of marketshare/monopoly power. Eventually, if this continues and Amazon decides to hit back, the lack of natural competition (due to fines that came too little too late in regards to anti-competitive behavior) may put the nation state(s) between a rock and a hard place.
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.
If you see the 2020 numbers Amazon has made 21.33B (on 386B revenue). AWS business in 2020 has generated 13.5 of that (with a 45B revenue)
Fining more than revenue in Italy is one thing and may look bad on paper if you take an italy-centric view but 1B is ~1% of Amazon's quarterly revenue. Amazon is a massive company and Italy could be a loss-leader for years maybe even decades and not make a dent. All the while Italian businesses suffer and wealth compounds somewhere else.
There's also no absolute way to measure the market share/billions (and in which related markets) they've captured by the abuse they've perpetrated. Generally governments fine too little and too late, not too much and too early.
They might never profit enough from Italy to make up for this.
Please note that I'm talking about revenue not profit ("income"). In 2020 (and 2021, which to be fair are maybe a little bit skewed) Amazon was consistently making >$90B in revenue for the quarter. Key word being revenue.
> The company also delivered its largest quarter by revenue of all time at $125.56 billion, pushing it past the symbolic $100 billion mark for the first time.[0]
Wow it's frustratingly hard to find such a simple thing as revenue for a company graphed by quarter -- ycharts is at least straight forward[1].
[0]: https://www.cnbc.com/2021/02/02/amazon-amzn-earnings-q4-2020...
If you paid 1.3B one-time to secure yourself a revenue stream that pays out 200MM than you would have otherwise gained a quarter, you're going to make your money back in ~6 quarters. It's absolutely worth it to take the temporary hit to income (obviously better if you didn't, which they were counting on) -- in fact knowing up front it'd be worth it.
Considering only the hit to short term income makes sense only in the short term, I think -- the Italian industry that was muscled out because they didn't want to use FBA, or the italian logistics providers that weren't chosen because of the incentive to use FBA face more difficulty. Amazon is amplifying solidifying it's own revenue streams, and that effect is likely to persist past a quarter or two.
I may be mistaken but I think of it like the other non-profit making tech companies that are floating around -- unexpected losses in the service of market domination are worth the gained and/or even-more-stabilized revenue streams.
In all seriousness, is it documented anywhere where these fines end up and who exactly benefits from them?
Wut? Italy tax revenue last year has been 708B euros, this is < 0.2% of just that
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.
If anything, this could be because of the communist aspect. Companies of a certain size become entwined with the government in China. Funding isn't really a concern when the state backs you up. Similarly, but without state support, the US has Silicon Valley investors who'll always throw cash at companies with the right connections and sometimes random people with decent business ideas.
Does the EU have anything similar to grow companies?
In fact, I would argue because of the many small countries, many companies are incredibly entwined with the government. Because many of these countries only have few large companies.
I think the West loves saying 'all China suggests is because the government just finances every single company'. In reality this just doesn't seem to practically hold up. If all the companies are always losing money and have infinite money. Why are many they so good as scraping, forward looking, innovative and so on.
Its not government money that makes some of the China car makers better at software, or faster at adopting new innovations.
A contractor of Arianespace for Ariane 6 had an issue, RUAG had an issue with fairing. And the Swiss government jumped in. And this happen very often in many industries. I am not confident that all of the recent space companies in China would get the same treatment.
It doesn’t mean companies are free to just lose money. It means they can take risks and not just milk immediate profits for stock gains.
> It means they can take risks and not just milk immediate profits for stock gains.
Given how many US companies do the same and how many companies are heavily protected in Europe I fail to see this as sufficient explanation.
Sufficiently large companies are required to have a certain percent of their staff be CCP members making decisions. That also comes with money tied up in the company. That doesn’t mean every company is backed up by the government. You’re making wild straw men and getting enraged at your own argument.
And also that doesn't explain why so many initially small companies end up being successful.
1. That fine mention in this article 2. The outage that happened in AWS US-East-1 region earlier this week
some SLA's include extra compensation. there is reputation damage, ie lost future sales. perhaps also extra costs were made to resolve things.
hard to estimate those though.
Companies who host on AWS don't care that the retail arm abuses its market position, they care about reliability.
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.
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.
English has nothing to do with it, and there are enough Italians who can speak English to handle all transactions with foreigners.
And the more people talk about "culture, food, tourism", as if Italy were some third world tropical island, the more you know it's getting bad.
Yes, California, Washington State, and New York easily beat most other places on the planet when it comes to IT, including Italy. 30 years ago, when high-tech meant electronics, Japan was a leader. When high-tech meant mechanics, Germany was one of the leaders. Now, high-tech increasingly means digital, and the language of the digital age is English. Places where close to 100 percent speak English at a high level at a young age have an advantage.
I visit Italy almost every year, and it's one of the places in the rich world with most immigrants. They literally drown trying to reach Italian shores. Yes, it's not of the highly skilled type, but they are foreign and they want work.
Whereas Italian democracy and public administration leaves something to be desired, Italy didn't have a near coup in 2021, and Italian parties are not busy trying to win elections by preventing voters from other parties from voting. It's whole legal system is not so fragile that half its population cares whether one octogenarian justice dies during what they consider the wrong president.
From a startup perspective, Italy is not where it happens right now, but neither is the US Midwest. Italy's population is very old, and it's not a leader in the English speaking digital economy. Let's see what happens.
One of the main points is that Amazon cannot have private deals, de facto monopolizing the business of logistic.
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.
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
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.
Oh, so 10 years of gathering shipping data is not enough to know that I deliver on time? Is that metric too difficult to track?
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.
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.
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...
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.
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.
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.
> 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)
> 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).
This actually makes me wonder about something I've noticed in Germany: Amazon has a DHL locker on file as my shipping address. But for third-party stuff not via FBA it's not available (at least usually), as Amazon doesn't know if the shipper will use DHL. Can a seller explicitly declare "yes, I'll ship that to DHL lockers" when setting up the product with Amazon, or are they excluded from that too?
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.
If they do, they don't get special highlighting of that on the marketplace though, that's the point of the complaint. Having "Amazon Prime" on a listing is a distinction between you and an arbitrary other third-party seller who doesn't care, if your third-party fulfillment can match or beat Amazon Prime in service quality you don't get any indication of that on the listing.
https://sellercentral.amazon.com/gp/help/external/201812230?...
Those listings get the Prime badge.
> 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.
Anecdotal, I have numerous counterpoints here in Germany. Zalando in my experience performs way better, and also Otto.
> Others may be capable of but will they?
Yes.
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.
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.
- 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.
Thats not your decision, or amazon's. The end customer should be deciding what service is better
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
Like Amazon would have used that money for the greater good instead.
Like the US is much better at this, throwing trillions of public money in weapons while they can't seem to afford free public healthcare.
Anyway it only makes it more absurd; that the US as a nation manages to be the first military world power using less money than they spend to have a broken healthcare system that ruins people's lives.
The US can afford free public healthcare. It could probably afford free public healthcare with its current public healthcare spending (per capita it spends far more than most developed countries providing that, and per GDP it spends a similar amount), but instead it's spends hyper inefficiently so as to maintain a private healthcare system that costs even more on top of the public system.
Weapons are irrelevant to that, though the US spends too much (and too inefficiently) on those, too.
I do believe that is good to tax/fine Amazon appropriately, I just don't believe that the Italian government will use that money for the benefits of the Italians.
The rest is just false allegations
Also this is not a tax but a fine. There's a big difference
If you're happy that they should pay taxes then I don't get the reason of your comment.
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)
My point, however, is that we need to look at their profits, not revenue, to understand the impact of the fine.
For illustration, 5% of 5bn is 250m, so if the fine is 1.1bn, it will take them 4 years to absorb it from localized profits only. Peanuts.
They definitely are capable of playing by the rules.
The hit is not sustainable if replicated across two or three EU markets, but if limited to Italy it's just a cost of business.
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.
Who are the 7 Million? In Italy? I only find figures between 1million and 1.5million. Can't be europe either, several coutries in the region have more. Very confusing.
Good.
"Secondo l’Autorità, le società hanno legato all’utilizzo del servizio Logistica di Amazon l’accesso a un insieme di vantaggi essenziali per ottenere visibilità e migliori prospettive di vendite su Amazon.it. Tra tali vantaggi esclusivi spicca l’etichetta Prime, che consente di vendere con più facilità ai consumatori più fedeli e con maggiore capacità di spesa aderenti al programma di fidelizzazione di Amazon. L’etichetta Prime consente, inoltre, di partecipare a eventi speciali gestiti da Amazon, come Black Friday, Cyber Monday, Prime Day e aumenta la probabilità che l’offerta del venditore sia selezionata come Offerta in Vetrina e visualizzata nella cosiddetta Buy Box. Amazon ha, così, impedito ai venditori terzi di associare l’etichetta Prime alle offerte non gestite con FBA."
Automatic translation by DeepL: "According to the Authority, the companies have linked the use of Amazon's Logistics service to access to a set of benefits that are essential for gaining visibility and better sales prospects on Amazon.it. These exclusive benefits include the Prime label, which makes it easier to sell to the most loyal and highest-spending consumers who are members of Amazon's loyalty program. The Prime label also makes it possible to participate in special events run by Amazon, such as Black Friday, Cyber Monday, Prime Day and increases the likelihood that the seller's offer will be selected as a Featured Offer and displayed in the so-called Buy Box. Amazon has, thus, prevented third-party sellers from associating the Prime label with offers not managed with FBA."
> Among these exclusive benefits stands out the Prime label, ...
In the Italian version is made clear that the Prime label is one of the most important benefits
edit: formatting
To me the biggest problem with these kinds of platform is information asymmetry. Amazon literally knows about every credit card number and every shipment and every product ever sold, while the customer can't even trust if the numbers on a seller's page are legit or just the result of scams, or if the price didn't change 5 seconds before they clicked on the product page. The only stategy to rebalance the market is to REQUIRE every company to be as CLUELESS as possible about what happens on their platform, so basically enforce PRIVACY.
Amazon should only know which sellers are on the platform and their catalog of products. It shouldn't know my address or my purchase history. The sellers should only know which of their products are selling. They shouldn't know my address. The shipment company should only know my address and what the package broadly is about. It shouldn't know exactly what I have bought or that the purchase was done through Amazon.
All of this could be achieved with a well made public key cryptography architecture and open APIs for being a customer, seller, payment processor and shipment company. Let's take an example: a seller wants to sell on Amazon. 1 - they create a key pair 2 - they tell Amazon their public key 3 - when I click on the seller's page I receive the public key and now the traffic is encrypted between us, Amazon can see nothing 4 - the seller has chosen the shipment company(s) and payment processor(s) and gives me their public key at the moment of purchase 5 - the customer encrypts the credit card info with the payment processor pubkey, encrypts the shipping info with the shipping company's pubkey and encrypts everything with the seller's pubkey 6 - the seller now delivers the information to the payment processor and shipment company 7 - the shipment company tells the seller how much the package is going to cost and the payment processor tells the seller if the payment has been concluded successfully 8 - the seller prints the tracking paper's encrypted QR code and the shipment company proceeds to deliver it to the customer
So what would be Amazon's role in all of this? They should provide a website and/or app that just works across all platforms imaginable and is fast and stable and good looking. They should manage the identities of sellers so customers know they are buying from real people, but nothing more. Lastly they should collect a fee for every transaction. E-commerce should be reliable and automated, not a privacy horror fest filled with ads, bogous suggestions and shady practices and policies
Are these types of fines taken straight out of any "profits" by the accountants so I'm not sure if they don't just effectively "expense" the cost of fines and consequently only pay 60-80% of them?
It does seem high but then it depends on if they are consistently breaking the law. I'm sure these bodies came to a conclusion based on some sort of evidence to show damage to other businesses. How would you deter companies in a different way from breaking the law?
2. Drive them to online shopping as their only choice, thus massively increasing profits for Amazon, which was already dominating the market.[1]
3. Fine Amazon for abuse of market dominance.
4. Profit
[1] https://www.cbsnews.com/news/amazon-earnings-8-1-billion-pro...
Technically, it's not a paper, but still in many European countries it's not possible to enter many physical stores without a proof of vaccinations. I guess that's what parent's comment is about.
Anyone can enter any store without showing any paper in Italy. The only places where you are required to show proof of vaccination or recovery from covid are:
- Restaurant (if you want to dine in)
- SPAs
- Ski resorts
Last time I checked Amazon didn't have dine-in restaurants, SPAs or ski resorts (at least not in Italy).
Which other EU country requires paper document to enter a store?
You don't need to be vaccinated, you could also preform regular test (test are free), or if you all ready had Covid 19 and recovered.