France fines Amazon 4 million euros over marketplace clauses
A lawsuit was filed against Amazon in 2017, after a two-year investigation into third-party vendor platforms, which found several clauses potentially unfair to the 10,000 small and midsize French companies selling on Amazon.
Even as Indian sellers on ecommerce marketplaces are unhappy that private labels offered by marketplaces create a "conflict of interest", a French court has fined the US retailing giant Amazon four million euros over terms of use deemed unfair for companies using its online marketplace to sell their goods.
"It's a record fine" for a suit involving abusive commercial clauses, Loic Tanguy, a director at the DGCCRF, France's consumer and anti-fraud watchdog, told AFP on Wednesday.
The agency filed its lawsuit in 2017 after a two-year investigation into third-party vendor platforms, which found several clauses potentially unfair to the 10,000 small and midsize French companies selling on Amazon.
They gave Amazon the power to modify contracts at a moment's notice, demand shorter delivery times or block deliveries while demanding additional corporate information from vendors.
Tanguy said Amazon was the only online vendor who refused to modify its terms of use after the investigation.
Despite the obvious advantages for companies using Amazon, Tanguy said, the "asymmetrical balance of power" must not force vendors to accept unfair terms of use.
In its ruling, first reported by a French online news site on Tuesday, the court found the contested clauses "manifestly unbalanced" and ordered Amazon to change them within six months.
It said Amazon's marketplace generated around 60 percent of the company's five billion euros of Amazon's total French sales.
"The court ruled on a limited number of clauses, most of which were already updated earlier this year," Amazon France told AFP late Tuesday.
Online marketplaces like Amazon have been a boon for small and midsize French firms, in particular for finding new export markets, with their total foreign sales rising to 350 million euros last year, according to the DGCCRF.
"The development of the digital economy is a tremendous opportunity, as long as the big marketplaces respect competition and consumer protection rules," French Finance Minister Bruno Le Maire said on Wednesday on Twitter.
Recently in India, Amazon picked up a full 49 percent stake in Future Coupons, the promoter entity of Kishore Biyani-led Future Retail, with an option to acquire the entire stake later.
