Ahead of an impending Federal Trade Commission (FTC) lawsuit and mounting antitrust concerns, Amazon has announced a significant policy reversal.
Amazon backtracks on seller fee
The e-commerce giant has decided to abandon its previously proposed two percent fee for Prime sellers who opt not to use Amazon’s in-house fulfillment services. This move comes just weeks before the scheduled implementation of the fee on October 1st, which was set to be in addition to the existing 8-to-15% commission collected by Amazon from its sellers. This was reported by Bloomberg.
Jonathan Hillson, PR manager at Amazon, provided insights into the abrupt change to The Verge. Hillson says the 2% Seller Fulfilled Prime fee was initially introduced to cover Amazon’s operational costs.
However, in light of concerns about the potential impact on seller sentiment and participation, Amazon has decided to shelve the fee.
The fee was designed to affect members of the Seller Fulfilled Prime program exclusively. This program allows sellers to retain control over their logistics while still affording them the “Prime” label.
Bad timing
The backdrop to this decision is the looming FTC antitrust lawsuit, which alleges that Amazon is coercing its sellers into arrangements they would prefer to avoid.
This case hinges on the claim that the mass e-tailer employs deceptive tactics to entice customers (and sellers) into subscribing to its Prime service.
If successful, this lawsuit could lead to the restructuring of Amazon, a company valued at $1.3 trillion, making it one of the most aggressive moves against a tech giant during the Biden administration. While the exact details of the lawsuit are not public, it is expected to challenge Amazon’s practices related to Amazon Prime, pricing on competing websites, and policies that encourage using Amazon’s logistics and advertising services.
The e-tailer has previously disputed allegations related to its pricing policies, arguing that sellers set their prices.
This case is part of a broader effort by regulatory bodies to address antitrust concerns in the tech industry. The FTC has been actively pursuing various investigations, with mixed results, against tech giants.
Amazon has faced similar allegations and changed its practices in Europe, indicating that the outcome of this case could have global implications for the company.
This latest development marks yet another chapter in Amazon’s ongoing legal battles, underscoring the heightened scrutiny the company faces in the current regulatory landscape.
