Amazon fined 4 million euros over marketplace clauses in France

TheDGCCRF 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.

The logo of Amazon is seen at their new warehouse during its opening announcement on the outskirts of Mexico City, Mexico July 30, 2019. (REUTERS)

A French court has fined the US retailing giant Amazon four million euros ($4.4 million) 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 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," Finance Minister Bruno Le Maire said Wednesday on Twitter.