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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, fas

by 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)
- darkwater 5y ago
  >> 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" 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).
  - detaro 5y ago
    Right, but there is a point to "it says Amazon Prime" == "you can have it shipped to a Prime locker". And just like to get something in a Poste Italiane locker you need to ship it with them (I heavily assume), that needs to involve Amazon logistics somehow, whereas everything else doesn't. 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?
    - darkwater 5y ago
      But the Amazon locker point you are making it's perfectly in line with this fine: if Amazon would let other ships Amazon packages (and Amazon packages only) to those lockers, it would be clearly a sign they are not abusing their dominance in one market (online sales) to drive another market (logistics/last-mile delivery). Full disclosure: I work for a last-mile delivery company even thou in this case is not direct competence.
- aulin 5y ago
  Sure it does not naturally provide a better service, but does the better service this come from its dominance position or dominance is a consequence of that? 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.
mattashii 5y ago
... But isn't this FBA <> free Prime shipping relation the point that the CMA of Italy believes to be problematic? 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.
- sokoloff 5y ago
  The 3rd party seller opts into this bundling as a benefit to offer their customers, though, right? No one is forcing seller X to use FBA or Amazon’s platform at all; they’re doing it because customers prefer it now that they see what’s possible. 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.
toyg 5y ago
You work under the impression that Italian laws, and the justice system that enacts them, are a set of coherent and logical measures defined to make life better for consumers and businesses. 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.
- namdnay 5y ago
  more than 2000 years ago, cicero was litigating long before jesus came along :)
GlitchMr 5y ago
I disagree with you here. I live in Poland which has a very popular e-commerce website known as Allegro.pl - it's very similar to Amazon. It has its own version of Prime which is known as Allegro Smart which provides benefits such as free shipping and easy returns. A seller that wants to make their products have Smart badge don't have to use Allegro's own delivery method (Allegro One). The requirements for a Smart badge are as follows: - 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.
ClumsyPilot 5y ago
"Marketplace products have longer and unreliable shippings" Thats not your decision, or amazon's. The end customer should be deciding what service is better

by aulin 5y ago

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)

darkwater 5y ago
>> 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" 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).
- detaro 5y ago
  Right, but there is a point to "it says Amazon Prime" == "you can have it shipped to a Prime locker". And just like to get something in a Poste Italiane locker you need to ship it with them (I heavily assume), that needs to involve Amazon logistics somehow, whereas everything else doesn't. 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?
  - darkwater 5y ago
    But the Amazon locker point you are making it's perfectly in line with this fine: if Amazon would let other ships Amazon packages (and Amazon packages only) to those lockers, it would be clearly a sign they are not abusing their dominance in one market (online sales) to drive another market (logistics/last-mile delivery). Full disclosure: I work for a last-mile delivery company even thou in this case is not direct competence.
aulin 5y ago
Sure it does not naturally provide a better service, but does the better service this come from its dominance position or dominance is a consequence of that? 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.

mattashii 5y ago

... But isn't this FBA <> free Prime shipping relation the point that the CMA of Italy believes to be problematic? 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.

sokoloff 5y ago
The 3rd party seller opts into this bundling as a benefit to offer their customers, though, right? No one is forcing seller X to use FBA or Amazon’s platform at all; they’re doing it because customers prefer it now that they see what’s possible. 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.

toyg 5y ago

You work under the impression that Italian laws, and the justice system that enacts them, are a set of coherent and logical measures defined to make life better for consumers and businesses. 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.

namdnay 5y ago
more than 2000 years ago, cicero was litigating long before jesus came along :)

GlitchMr 5y ago

I disagree with you here. I live in Poland which has a very popular e-commerce website known as Allegro.pl - it's very similar to Amazon. It has its own version of Prime which is known as Allegro Smart which provides benefits such as free shipping and easy returns. A seller that wants to make their products have Smart badge don't have to use Allegro's own delivery method (Allegro One). The requirements for a Smart badge are as follows: - 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.

ClumsyPilot 5y ago

"Marketplace products have longer and unreliable shippings" Thats not your decision, or amazon's. The end customer should be deciding what service is better