Amazon may face €10m fine for alleged 'abuse' of market dominance

French government claims unfair contracts drive many sellers to bankruptcy

Amazon potentially faces a multi-million Euro fine as part of a complaint by the French government, which claims the company is abusing its dominant position to levy unfair contract terms on its suppliers.

The complaint, issued against the company to the Paris Commerce Court on Monday, is seeking a fine of 10 million (8.8 million) as it claims Amazon "imposes unbalanced relations to its vendors", according to the newspaper Le Parsien.

Advertisement - Article continues below

The move follows a two-year long investigation by the consumer watchdog DGCCRF into the practices of internet e-commerce platforms, which claims that Amazon is abusing its dominant position by imposing unfair and often fluid contract terms on its suppliers.

More than 10,000 companies use Amazon as a platform for selling goods to 3.5 million visitors, according to the newspaper, however unfair contract terms often "push them to bankruptcy".

Currently, Amazon is able to change contracts at any time, such as imposing shorter delivery times or forcing sellers to have more frequent verification checks. One seller complained on the Amazon forums that it had been "more than a year" since their account had started the verification process, and that Amazon had been unclear which documents should be provided in order to start selling again.

Advertisement
Advertisement - Article continues below

The claim is that due to Amazon's dominance in the market, and the sheer number of customers a supplier could access, many companies have no choice but to agree to the contract terms.

Advertisement - Article continues below

Other sellers have complained about Amazon's bullish attitude towards sellers, as a negative review, delivery problems or damaged goods may result in their account being closed.

The complaint has been acknowledged by an Economy Ministry official, but was unwilling to provide any further details, according to Reuters.

An Amazon spokesperson told IT Pro: "We do not comment on outstanding legal proceedings." 

This isn't the first time Amazon has been suspected of abusing its dominant market position. An EU investigation in May revealed that the company had placed clauses in its agreements with e-book publishers that made it more difficult for other platforms to compete.

For example, publishers were often required to offer more favourable terms to Amazon than those offered to competitors, including better prices and promotional deals, and to fully disclose the details of any deals made with other platforms.

Image: Bigstock

Featured Resources

Preparing for long-term remote working after COVID-19

Learn how to safely and securely enable your remote workforce

Download now

Cloud vs on-premise storage: What’s right for you?

Key considerations driving document storage decisions for businesses

Download now

Staying ahead of the game in the world of data

Create successful marketing campaigns by understanding your customers better

Download now

Transforming productivity

Solutions that facilitate work at full speed

Download now
Advertisement

Most Popular

Visit/business/business-operations/356395/nvidia-overtakes-intel-as-most-valuable-us-chipmaker
Business operations

Nvidia overtakes Intel as most valuable US chipmaker

9 Jul 2020
Visit/laptops/29190/how-to-find-ram-speed-size-and-type
Laptops

How to find RAM speed, size and type

24 Jun 2020
Visit/security/cyber-attacks/356417/trump-confirms-cyber-attacks-on-russia-election-trolls
cyber attacks

Trump confirms US cyber attack on Russia election trolls

13 Jul 2020