France’s Minister of the Economy is suing Amazon, alleging the e-tailer abuses its power with vendor contracts.
Minister Bruno Le Maire is looking to fine Amazon 10 million euros for investigative findings by France’s Directorate General for Competition, Consumer Affairs and Fraud Control that state the e-tailer holds “unilateral” power in its contracts with sellers on its marketplace. Specifically, the DGCCRF said Amazon’s contracts allow it to modify conditions and even terminate contracts with sellers with no recourse for the seller.
Considering this is prohibited by France’s Commercial Code “and the damage caused to the economy,” Le Maire filed suit with the Commercial Court of Paris to enforce the fine.
As the economic minister, Le Maire has the power to summon companies before the commercial court for sanctions by a judge.
The DGCCRF added in a statement that Le Maire’s move “illustrates the government’s willingness to act as a national and European level to better regulate the activity of large digital platforms and to ensure greater transparency, balance and loyalty in their relations with companies.”
In revealing the findings from its investigation, which also included web platforms eBay, Fnac.com, Rue du Commerce and Cdiscount, the DGCCRF said these types of digital marketplaces generally work with “small business that need the notoriety of a platform to reach consumers .”
“There is thus a structural imbalance between different parts and therefore an [imbalance] of power,” the DGCCRF said.
As for the other marketplaces the regulator looked into, it said they’ve “come into compliance” during the course of the investigation.
An Amazon representative could not be reached immediately for comment.
The e-tailer has been coming up against its share of issues in Europe lately. Last week, it agreed to pay 100 million euros to end a probe into its tax payments by Italy.
It’s also facing allegations by the European Commission that it owes more than 250 million euros in back taxes related to the shifting of European profits to a holding company in Luxembourg, where it was given more favorable tax rates.
Amazon has also been facing protests in the U.K. and Germany, with working claiming unsafe conditions and poor pay, which the company has denied. Warehouse workers from New Jersey, joined by unions and community groups, also protested working conditions last week in New York.
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