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Italy fines Amazon record $1.3B for abuse of market dominance

298 points by ausudhz 5y ago

GDC7 5y ago
When will the EU provide the same quality of life that Amazon provides? The EU is like the federal government on steroids . Even more hateful and prone to block everything which isn’t public sector .
- a_chris 5y ago
  I guess you have never been in Europe, right?
  - deleted 5y ago
    [deleted]
  - GDC7 5y ago
    Like every government beurocracy they just move money around to create opportunity for cronyism and mysterious leaks in the pipe as money is moved around . There is no interest in going down in history for enlarging the pie. You can say everything you want about Bezos , Gates, zuckerberg , Larry &sergey and everybody who had beef with the EU (including European entrepreneurs) but at least they started with the ambition of enlarging the pie as opposed to becoming beurocrats
    - isbvhodnvemrwvn 5y ago
      That's a very long winded way of saying "no".
- josefx 5y ago
  Hard to beat Amazons search function in pure suck, so probably never? I am not sure what Amazon provides specifically that should make it stand out, I generally end up using third party sites to search for what I need and only end up buying at Amazon when it turns up near the top of the results.
deleted 5y ago
[deleted]
foepys 5y ago
I wonder at which point the fines will outgrow the "cost of doing business" and really start to hurt? 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.
- moritonal 5y ago
  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.
  - foepys 5y ago
    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.
- nickpp 5y ago
  This will only stop when USA takes symmetrical measures, fining large European conglomerates in response. It's like tariffs - just another form of protectionism.
  - onion2k 5y ago
    fining large European conglomerates in response Which ones?
    - HPsquared 5y ago
      VW and Airbus are fairly recent examples.
      - float4 5y ago
kome 5y ago
Amazon decided to be a market place, but it's unfair to the sellers on the platform: they are not represented as much on the main site - they don't have a fair space, and amazon use their data to steal part of their market. That's why the Italian anti-trust is striking on amazon. Good.
- nickpp 5y ago
  Amazon's behavior is in no way different from other European big retailers like Auchan, Lidl, etc. But they are being targeted for being American. This kind of protectionism is disgusting.
  - nivenkos 5y ago
    Protectionism is good. We've been colonised by the US - shipping all the high paid jobs there and paying no taxes in Europe.
    - nickpp 5y ago
      Protectionism stagnates societies, slows innovation and disruption while benefiting incumbents.
      - kataklasm 5y ago
        Please tell me more about how Amazon progresses society?
        nickpp 5y ago
        Incredible access to products from over the globe. Like google democratized access to information, really. Then superb opportunities for sellers on its market place: lots of small business started there. And let's not talk about their other investments and creations like AWS.
    - kortilla 5y ago
      The citizens only come the US for high paying jobs because there aren’t enough innovative businesses in Europe to support strong software wages. There aren’t enough innovating businesses because of the tendency of the people to reach for regulation for everything. You can’t pass a law that demands your economy be better without somehow actually making it better for businesses.
lillecarl 5y ago
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.
- tut-urut-utut 5y ago
  If the Italian market is too small to justify 1.3B costs of doing business Amazon has only three options there: 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
  - kmlx 5y ago
    > In all those cases consumers in Italy would profit, either from fair market or from more tax money. > 2. Move out of Italian market this would be a net negative all around. especially for consumers.
  - maury91 5y ago
    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
    - ausudhz 5y ago
      This doesn't mean that companies shouldn't pay taxes. Also this is not a tax but a fine. There's a big difference
      - maury91 5y ago
        I didn't said anywhere that companies shouldn't pay taxes... If was for me companies should pay the same amount of taxes as civilians ( 60% ) if not more
tut-urut-utut 5y ago
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.
nickpp 5y ago
At this point it is pretty clear that the EU politicians are targeting big-tech simply for being American. Pretty sad we're not focusing instead on the reasons why Europe is under-represented in the big-tech scene.
- Eldt 5y ago
  Is that clear?
- swarnie 5y ago
  I thought it was because of the monopolistic behaviour and market abuse. Do you have an example of anti-American discrimination?
  - akyoan 5y ago
    Nah, they just read the umpteenth "American company fined by EU country" and assume it's not fair for the company. What they don't realize is how good customer protections laws are in Europe compared to most of the world. The fact that $1000+ purchases are only covered for a year in the US for example is kind of a joke (in the EU it's 2 years)
    - nickpp 5y ago
      And that is why a corresponding product is more expensive in EU than in USA. Extra guarantee is nice, but nothing is free.
      - jusssi 5y ago
        The protection goes both ways though. Court ordered compensations are based on actual damages. No one here dreams of getting millions for burning their mouth on hot McD coffee.
        nickpp 5y ago
        > No one here dreams of getting millions for burning their mouth on hot McD coffee You do know that this is not how that story went, right? The popular version of the story you mention is just wrong.
tdrdt 5y ago
Am I right that this is (only) about unfair dominance in logistics? It looks like Amazon Prime is forcing sellers on Amazon to use Amazon logistics and thus putting others out of business.
- onphonenow 5y ago
  Italian shipping outside of prime is a mess - people trust prime because of Amazon logistics
aulin 5y ago
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.
- Lhiw 5y ago
  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.
  - aulin 5y ago
    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.
    - matsemann 5y ago
      Isn't it the opposite? They have so much money from other markets, that they can take over a new market suffering losses for years, but pushing out everyone else.
  - deleted 5y ago
    [deleted]
- detaro 5y ago
  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)
belval 5y ago
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
- dncornholio 5y ago
  What if I could guarantee one or two-day shipping without needing to use Amazon's shipping?
  - chrisseaton 5y ago
    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.
    - ClumsyPilot 5y ago
      "because they don't know that you can keep your promises." 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?
      - seoulmetro 5y ago
        Yes.
  - MarcellusDrum 5y ago
    Well that's great, but still, Amazon won't guarantee it just because you did. They can't guarantee something they have no control over.
  - belval 5y ago
pfortuny 5y ago
Take into account that: 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.
- seaman1921 5y ago
  I am curious, in general what exactly does a giant like amazon invest in, over themselves?
  - pfortuny 5y ago
    They can by their own shares, for example.
Dumble 5y ago
> The Prime label makes it easier to sell to the more than 7 million most loyal and high-spending consumers members of Amazon’s loyalty program. 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.
trompetenaccoun 5y ago
1. Make it impossible for millions of citizens to enter physical stores without having to show papers they don't have. 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-profit/ https://www.cbsnews.com/news/amazon-earnings-8-1-billion-pro...
- ausudhz 5y ago
  You can visit a physical store what paper you are supposed to show sorry?
  - tut-urut-utut 5y ago
    > You can visit a physical store what paper you are supposed to show sorry? 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.
- savy91 5y ago
  Source for 1. ? 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).
  - trompetenaccoun 5y ago
    You're right, I may have confused it with another EU country. Amazon Italy's revenue is still massively up in 2020 and 2021 compared to previous years. Put it down to the earlier restrictions or mask mandates that are still in place if you will, but it's not organic growth. Just look at the charts, there's a giant jump in revenue in 2020!
    - 5y ago
dncornholio 5y ago
It is also forbidden for supermarkets (for example) to give people with a "customer card" discounts. They are obliged to give everyone the discount. So when a cashier asks for a customer card and I tell them I don't have one, the cashier scans their own card to apply the discounts.
- darkwizard42 5y ago
  Wait, is this true? Are they allowed to tell you to sign up for a free one? (seems to be what happens every time I use a grocery store I don't have a phone number for)
seaman1921 5y ago
These EU countries sure seem to be raking in a lot of FAANG money. Ideally they should just sit down together and meaningfully reach some common policies around how to operate without being 'abusive' - but of course they wouldn't get to make these billion dollar fines then.
- andy_ppp 5y ago
  Companies seem to push the boundaries of the law deliberately. 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?
ausudhz 5y ago
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.
theunspoken 5y ago
A marketplace maker can't have its own shop, a marketplace maker can't have its own delivery service, a marketplace maker can't have its own payment processor. 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
albertopv 5y ago
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. [0] https://messaggeroveneto.gelocal.it/udine/cronaca/2021/06/13/news/l-opposizione-contro-amazon-dubbi-sul-nuovo-magazzino-1.40386862 https://messaggeroveneto.gelocal.it/udine/cronaca/2021/06/13...
- mmar 5y ago
  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).
- q1w2 5y ago
  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.
  - mapster 5y ago
MrBoomixer 5y ago
Forgive my naivety; What happens when a country wins something like this? What is the money used for? How is it fair that the country gets this capital?
- binarymax 5y ago
  Not sure about Italy, but if it's at all like the US it would typically go to the treasury of the jurisdiction in which the fine occurred. It could then (in theory) be treated the same as tax revenue - but government budgets are complicated things, so I'd say the likelihood of the fine providing direct relief to those impacted by the crime are exceedingly low.
shoulderfake 5y ago
Jeff brushes his shoulders off

298 points by ausudhz 5y ago

GDC7 5y ago

When will the EU provide the same quality of life that Amazon provides? The EU is like the federal government on steroids . Even more hateful and prone to block everything which isn’t public sector .

a_chris 5y ago
I guess you have never been in Europe, right?
- deleted 5y ago
  [deleted]
- GDC7 5y ago
  Like every government beurocracy they just move money around to create opportunity for cronyism and mysterious leaks in the pipe as money is moved around . There is no interest in going down in history for enlarging the pie. You can say everything you want about Bezos , Gates, zuckerberg , Larry &sergey and everybody who had beef with the EU (including European entrepreneurs) but at least they started with the ambition of enlarging the pie as opposed to becoming beurocrats
  - isbvhodnvemrwvn 5y ago
    That's a very long winded way of saying "no".
josefx 5y ago
Hard to beat Amazons search function in pure suck, so probably never? I am not sure what Amazon provides specifically that should make it stand out, I generally end up using third party sites to search for what I need and only end up buying at Amazon when it turns up near the top of the results.

deleted 5y ago

[deleted]

foepys 5y ago

I wonder at which point the fines will outgrow the "cost of doing business" and really start to hurt? 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.

moritonal 5y ago
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.
- foepys 5y ago
  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.
nickpp 5y ago
This will only stop when USA takes symmetrical measures, fining large European conglomerates in response. It's like tariffs - just another form of protectionism.
- onion2k 5y ago
  fining large European conglomerates in response Which ones?
  - HPsquared 5y ago
    VW and Airbus are fairly recent examples.
    - float4 5y ago

kome 5y ago

Amazon decided to be a market place, but it's unfair to the sellers on the platform: they are not represented as much on the main site - they don't have a fair space, and amazon use their data to steal part of their market. That's why the Italian anti-trust is striking on amazon. Good.

nickpp 5y ago
Amazon's behavior is in no way different from other European big retailers like Auchan, Lidl, etc. But they are being targeted for being American. This kind of protectionism is disgusting.
- nivenkos 5y ago
  Protectionism is good. We've been colonised by the US - shipping all the high paid jobs there and paying no taxes in Europe.
  - nickpp 5y ago
    Protectionism stagnates societies, slows innovation and disruption while benefiting incumbents.
    - kataklasm 5y ago
      Please tell me more about how Amazon progresses society?
      - nickpp 5y ago
        Incredible access to products from over the globe. Like google democratized access to information, really. Then superb opportunities for sellers on its market place: lots of small business started there. And let's not talk about their other investments and creations like AWS.
  - kortilla 5y ago
    The citizens only come the US for high paying jobs because there aren’t enough innovative businesses in Europe to support strong software wages. There aren’t enough innovating businesses because of the tendency of the people to reach for regulation for everything. You can’t pass a law that demands your economy be better without somehow actually making it better for businesses.

lillecarl 5y ago

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.

tut-urut-utut 5y ago
If the Italian market is too small to justify 1.3B costs of doing business Amazon has only three options there: 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
- kmlx 5y ago
  > In all those cases consumers in Italy would profit, either from fair market or from more tax money. > 2. Move out of Italian market this would be a net negative all around. especially for consumers.
- maury91 5y ago
  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
  - ausudhz 5y ago
    This doesn't mean that companies shouldn't pay taxes. Also this is not a tax but a fine. There's a big difference
    - maury91 5y ago
      I didn't said anywhere that companies shouldn't pay taxes... If was for me companies should pay the same amount of taxes as civilians ( 60% ) if not more

tut-urut-utut 5y ago

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.

nickpp 5y ago

At this point it is pretty clear that the EU politicians are targeting big-tech simply for being American. Pretty sad we're not focusing instead on the reasons why Europe is under-represented in the big-tech scene.

Eldt 5y ago
Is that clear?
swarnie 5y ago
I thought it was because of the monopolistic behaviour and market abuse. Do you have an example of anti-American discrimination?
- akyoan 5y ago
  Nah, they just read the umpteenth "American company fined by EU country" and assume it's not fair for the company. What they don't realize is how good customer protections laws are in Europe compared to most of the world. The fact that $1000+ purchases are only covered for a year in the US for example is kind of a joke (in the EU it's 2 years)
  - nickpp 5y ago
    And that is why a corresponding product is more expensive in EU than in USA. Extra guarantee is nice, but nothing is free.
    - jusssi 5y ago
      The protection goes both ways though. Court ordered compensations are based on actual damages. No one here dreams of getting millions for burning their mouth on hot McD coffee.
      - nickpp 5y ago
        > No one here dreams of getting millions for burning their mouth on hot McD coffee You do know that this is not how that story went, right? The popular version of the story you mention is just wrong.

tdrdt 5y ago

Am I right that this is (only) about unfair dominance in logistics? It looks like Amazon Prime is forcing sellers on Amazon to use Amazon logistics and thus putting others out of business.

onphonenow 5y ago
Italian shipping outside of prime is a mess - people trust prime because of Amazon logistics

aulin 5y ago

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.

Lhiw 5y ago
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.
- aulin 5y ago
  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.
  - matsemann 5y ago
    Isn't it the opposite? They have so much money from other markets, that they can take over a new market suffering losses for years, but pushing out everyone else.
- deleted 5y ago
  [deleted]
detaro 5y ago
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)

belval 5y ago

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

dncornholio 5y ago
What if I could guarantee one or two-day shipping without needing to use Amazon's shipping?
- chrisseaton 5y ago
  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.
  - ClumsyPilot 5y ago
    "because they don't know that you can keep your promises." 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?
    - seoulmetro 5y ago
      Yes.
- MarcellusDrum 5y ago
  Well that's great, but still, Amazon won't guarantee it just because you did. They can't guarantee something they have no control over.
- belval 5y ago

pfortuny 5y ago

Take into account that: 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.

seaman1921 5y ago
I am curious, in general what exactly does a giant like amazon invest in, over themselves?
- pfortuny 5y ago
  They can by their own shares, for example.

Dumble 5y ago

> The Prime label makes it easier to sell to the more than 7 million most loyal and high-spending consumers members of Amazon’s loyalty program. 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.

trompetenaccoun 5y ago

1. Make it impossible for millions of citizens to enter physical stores without having to show papers they don't have. 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-profit/ https://www.cbsnews.com/news/amazon-earnings-8-1-billion-pro...

ausudhz 5y ago
You can visit a physical store what paper you are supposed to show sorry?
- tut-urut-utut 5y ago
  > You can visit a physical store what paper you are supposed to show sorry? 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.
savy91 5y ago
Source for 1. ? 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).
- trompetenaccoun 5y ago
  You're right, I may have confused it with another EU country. Amazon Italy's revenue is still massively up in 2020 and 2021 compared to previous years. Put it down to the earlier restrictions or mask mandates that are still in place if you will, but it's not organic growth. Just look at the charts, there's a giant jump in revenue in 2020!
  - 5y ago

dncornholio 5y ago

It is also forbidden for supermarkets (for example) to give people with a "customer card" discounts. They are obliged to give everyone the discount. So when a cashier asks for a customer card and I tell them I don't have one, the cashier scans their own card to apply the discounts.

darkwizard42 5y ago
Wait, is this true? Are they allowed to tell you to sign up for a free one? (seems to be what happens every time I use a grocery store I don't have a phone number for)

seaman1921 5y ago

These EU countries sure seem to be raking in a lot of FAANG money. Ideally they should just sit down together and meaningfully reach some common policies around how to operate without being 'abusive' - but of course they wouldn't get to make these billion dollar fines then.

andy_ppp 5y ago
Companies seem to push the boundaries of the law deliberately. 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?

ausudhz 5y ago

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.

theunspoken 5y ago

A marketplace maker can't have its own shop, a marketplace maker can't have its own delivery service, a marketplace maker can't have its own payment processor. 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

albertopv 5y ago

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. [0] https://messaggeroveneto.gelocal.it/udine/cronaca/2021/06/13/news/l-opposizione-contro-amazon-dubbi-sul-nuovo-magazzino-1.40386862 https://messaggeroveneto.gelocal.it/udine/cronaca/2021/06/13...

mmar 5y ago
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).
q1w2 5y ago
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.
- mapster 5y ago

MrBoomixer 5y ago

Forgive my naivety; What happens when a country wins something like this? What is the money used for? How is it fair that the country gets this capital?

binarymax 5y ago
Not sure about Italy, but if it's at all like the US it would typically go to the treasury of the jurisdiction in which the fine occurred. It could then (in theory) be treated the same as tax revenue - but government budgets are complicated things, so I'd say the likelihood of the fine providing direct relief to those impacted by the crime are exceedingly low.

shoulderfake 5y ago

Jeff brushes his shoulders off