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France Fines Amazon For Suppressing Small Traders

Dec 18, 2017 | Uncategorized | 0 comments

The French government filed a complaint with the Paris Commercial Court against the world’s largest online retailer, Amazon.The company is accused of having abused its overpowering position to force some suppliers into estates.The Ministry of Economics now wants to impose a fine.

Amazon France

As the newspaper Le Parisien reported this morning, the French Minister of Economic Affairs, Bruno Le Maire filed a lawsuit before the Paris Commercial Court because extensive investigations into Amazon’s abuses of its dominant position were found during an investigation. Previously, competition regulators in France had been examining the contracts of several major online trading platforms, which are entering into deals with smaller companies if the latter wants to sell their products through the respective platform.

To sell on Amazon’s French website, many smaller companies were forced to accept some highly unfair conditions. On the one hand, Amazon’s dominance would force them to offer their goods via the platform in order to reach customers at all. On the other hand, they would have to accept considerable disadvantages, which can often drive small businesses to the brink of ruin, according to the competition watchdogs.

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The Department of Commerce also cited examples of the unfair conditions faced by companies seeking to sell products through Amazon France. So Amazon reserves the right to change the contracts at any time at will. This gives the possibility to force shorter delivery times practically overnight. In addition, there are allegedly regular ‘reviews’ during which a supplier cannot make any sales at all, some of which should take years.

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It is also criticized that while Amazon uses draconian contracts, on the other hand, gets irresponsible. Thus, in case of damaged packages, delivery problems or exceeded deadlines, the small retailer must always take over the responsibility and possible costs – or he will be excluded from distribution via Amazon within a very short time. While this may at first glance benefit customers, Amazon is also able to use its market power to force sellers to make some anti-competitive concessions.

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The Ministry of Economic Affairs now wants to have the allegations of the competition guardians examined by the Commercial Court, in order to ultimately force a change in the handling of small traders by Amazon. Should the court agree that Amazon takes advantage of its dominant position, the group faces a fine of up to 10 million euros. For the company, this would probably just be a proverbial drop in the bucket, after all, it generates hundreds of billions of dollars a year. In France alone, Amazon’s homepage receives more than 3.5 million visitors every day.


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