Why Amazon was fined in Italy and how it responds to the Antitrust
All the details on the Antitrust fine against Amazon and the group's position
Amazon fined 10 million for unfair commercial practices. This decision by the Competition and Market Authority is accompanied by the acceptance of commitments for another conduct of the group, again within the same procedure. But let's see what happened.
AMAZON'S PRACTICE DISPUTED BY THE ANTITRUST
The authority chaired by Roberto Rustichelli has jointly sanctioned two companies of the Amazon group, the Luxembourg companies Amazon Services Europe S.à rl and Amazon EU S.à rl, for 10 million euros.
In fact, based on the preliminary investigation, the Antitrust ascertained that Amazon is implementing an unfair commercial practice because on its website – for a wide selection of products offered – it inserts the pre-selection of periodic purchases. In particular, on the web page where the characteristics of the selected item are described, the "periodic purchase" option is pre-set instead of "single purchase", both for products sold by Amazon and for products sold by third parties on the marketplace.
In this way, explains the Agcm, "consumers' freedom of choice is considerably limited" because "the graphic pre-tick of the recurring purchase induces them to periodically buy a product – even without actual need – thus limiting the right to choice". Furthermore, Amazon's conduct was deemed "in conflict with the canon of professional diligence" because an operator of such importance "would be required to build online interfaces relating to purchasing processes in order to allow consumers to make commercial choices free and aware."
At the start of the investigation, on June 21st, the Competition and Market Authority had also challenged Amazon's pre-selection of paid fast delivery. In this case, however, the Antitrust accepted the commitments proposed by Amazon which in the future will only predefine the free delivery option. Furthermore, the two Luxembourg companies will provide compensation to consumers who turned to Customer Service to complain about this conduct during 2023. During the investigation, the group underlined that it was proposing commitments, stating however that "the pre-setting of paid fast delivery would not violate article 65 of the Consumer Code as this 'Premium' delivery option would be pre-selected to satisfy the expectations of consumers, who have become increasingly demanding in terms of quality and speed of delivery".
SOME NUMBERS ON AMAZON
During the proceedings, Amazon pointed out that the number of Italian consumers who expressly declared that they had signed up for the periodic purchase program by mistake – and who for this reason canceled their subscription during 2023, after making the first purchase – is equal to a figure between 10 thousand and 50 thousand in both the first half of 2023 and the second half of 2023. Instead, the number of requests for assistance relating to pre-selection received by Customer Service was equal to 3,789 in the first half of 2023 and 1,815 in the second half of the year of last year. Numbers which, however, according to the Antitrust, are "far from meaningless" because they refer to "only consumers who realized that they had been attracted by the incorrect practice and who decided to correct/complain about the error, representing therefore probably only the emerging part of the phenomenon".
AGCOM'S OPINION
Piazza Verdi also asked the Communications Authority for its opinion. According to the Authority led by Giacomo Lasorella, "Amazon's use of the internet is likely to have a significant impact on consumers who, based on the information read on the professionals' website, could be induced to make a commercial decision that would otherwise they would not have taken, thus concretely developing the full potential of the promotion and sales methods used".
THE SANCTION
The fine imposed by the Antitrust is equal to the maximum law envisaged by the Consumer Code, i.e. 10 million. The provision explains: "On the basis of these elements and considering that the practice, despite the initiation of this proceeding, is still ongoing and that the turnover recorded by the parties is tens of billions of euros, it is considered appropriate to determine the amount of the administrative fine, applicable jointly and severally to the companies Amazon Services Europe S.à rl and Amazon EU S.à rl, to the extent of the maximum law, equal to 10 million euros, in order to ensure its deterrent function" .
THE NOTE FROM AMAZON
Amazon's response to the AGCM ruling was not long in coming: “We strongly disagree with the decision of the Competition and Market Authority (AGCM), and we intend to appeal. Every day, customers benefit from the “Subscribe and Save” program by saving money and time on periodic deliveries of products they use regularly. Since its launch in Italy, Amazon.it customers have saved over 40 million euros thanks to orders placed with Subscribe and Save. Our priority has always been to gain and maintain customer trust and we will continue to work to offer them a great shopping experience through low prices, wide selection and fast delivery."
Furthermore, the group points out, a recent study conducted by The European House-Ambrosetti on the main brands, both physical and online, found that Amazon ranks first with greater benefits perceived by Italians in terms of contribution to purchasing power, convenience, breadth of selection.
THE INFORMATION
But how does “Subscribe and Save” work? With "Subscribe and Save" customers can choose to receive products for daily use as often as they prefer, without the need to repeat the order each time and obtaining an additional discount compared to the single purchase price. With "Subscribe and Save" customers have the opportunity – without any additional commission – to save up to 15% on the sales price on Amazon.it.
Amazon also explains the benefits of “Subscribe and Save” during checkout. The customer, after selecting a purchase with "Subscribe and Save", receives an email confirming and summarizing the order indicating the product and delivery frequency.
Before each delivery of a Subscribe & Save order, Amazon sends the customer a reminder email showing the products, price, and any discounts applicable to the next delivery.
Customers can skip the delivery, change the frequency to suit their needs or cancel their subscription at any time and easily by visiting the dedicated section.
In the event that the customer changes his mind after delivery of the product, he can return it within 30 days in line with the return policy granted by Amazon, and still benefit from the discount applied to the "Subscribe and Save" program.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/amazon-sanzione-antitrust/ on Wed, 24 Apr 2024 07:45:11 +0000.