Tuesday, 24 Apr 2018

At Amazon, behind the king client, SMEs abused

It is not only for their fiscal arrangements that the Gafa (1) find themselves in the sights of justice. After the conviction of Google to a fine of 2.42 billion euros by the Commission of Brussels for abuse of dominant position of its own price comparator on its search engine, it is the turn of Amazon to be assigned by Bercy for another form of abuse. The Ministry of the Economy has sued the Paris Commercial Court against the world leader in online trading for abusive practices against the thousands of merchants who sell their goods through its hexagonal “marketplace” (the platform on which third-party sellers offer their own products for sale). A summons for “Significant imbalance in commercial relations with its sellers”, accompanied by a request for a fine of around € 10 million.
“We conducted a two-year survey of all the marketplaces, a dozen,” says Loïc Tanguy, Chief of Staff of the Directorate General of Competition, Consumer Affairs and Fraud Control (DGCCRF), confirming information from the Parisian. “It was considered that in the clauses imposed by Amazon to companies selling on its market place, there was a significant imbalance, a practice prohibited by the code of commerce.”
Earthen pot
Admittedly, Amazon who, as usual, did not wish “Comment on ongoing legal proceedings”, is not the only one to have imposed clauses contrary to the law. But unlike the marketplaces of other heavyweights in the sector, such as Cdiscount (Casino Group) and Rue du Commerce (Carrefour Group), which have complied with the requests of the DGCCRF, the latter “Considered that Amazon’s practices were more unfair”, Loïc Tanguy continues. Methods that are very similar to existing relationships between supermarkets and their suppliers. In other words, the earthen pot of the 10 000 French SMEs present in the “marketplace” of Amazon face the iron pot of a commercial site which, according to the latest barometer Médiamétrie e-commerce in France, receives more than 24 million of unique visitors per month and 3.6 million per day.
What are these offenses that Amazon was obviously aware of for several months? The DGCCRF mainly points out unilateral changes in the clauses of the contracts that bind it to sellers. The giant of e-commerce, which willingly presents its market place as “The equivalent of a shop that we would open on the Champs-Elysées”, can impose at any time and in the name of his client-king obsession new constraints on those who have acquired a “Sales privilege” on its platform. Shortened delivery times to the obligation to respond to the request of a customer within 24 hours, including Sunday, through diligent responses to all kinds of verification requests, all requirements of Amazon must be honored under penalty exclusion. Temporary or definitive, it is also unilaterally decided and synonymous for a large number of SMEs collapsing sales, or even almost certain bankruptcy in some cases.
“We get used to it, we have no choice, explains a bookseller of old books, whose activity on the Internet depends 80% of the market place of Amazon. But it is true that with the guarantee of A to Z, one is under permanent pressure. Vendors who can track their performance through a variety of indicators (number of page views, conversion rates of visitors to buyers, etc.) have their eyes firmly focused on customer ratings. And beware of ratings below the four-star mark (out of five). “It’s a decisive criterion for selling well, continues the bookseller, and a sword of Damocles, since only four- and five-star reviews are considered positive. ” “We are treated like children with a gratification system in good points, adds a saleswoman. The image that comes to me is that of the saloon. You come back with swing doors that look very open but you get ejected as quickly if you do not meet their criteria. And there is no point in complaining, there are only robots to answer you. ”
Marketplaces have acquired a very important weight, of the order of 20 to 30% of purchases on the Internet, according to Oxatis, a provider of e-commerce solutions. For Amazon, which levies a commission of 8 to 15% depending on the type of property on each transaction of its sellers, it is even one sale out of two. That is 4 billion euros if we stick to the low estimate of 8 billion annual business volume of its French subsidiary. “By nature, the balance of power is imbalanced between these giants of the Net and all these merchants, especially when they are small. Hence the importance of regulation by the state to get out of the law of the strongest, explains Marc Schillaci, president of Oxatis. Vendors have a vital need for Amazon to sell but that represent a few less SMEs for its platform? Nothing or almost nothing. ” When is a real platform right?
(1) Acronym for Google, Amazon, Facebook, Apple

Christophe Alix

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