Is logistics the price we have to pay for visibility?

The role of national competition authorities in e-commerce

Guest writer:
Dr. Judit Firniksz
researcher
Pázmány Péter
Katolikus Egyetem
Versenyjogi Kutató
Központja

What can be the role of national competition authorities in the transforming e-commerce world in the period until the European Union’s Digital Markets Act (DMA) and Digital Services Act (DSA) enter into force and afterwards? In December Italy’s Autorità Garante della Concorrenza e del Mercato (AGCM) adopted a game-changing decision in the Fulfilment by Amazon (FBA) case, imposing an exceptionally big fine. The case was about Amazon.it’s practice that for partners it was a prerequisite of using the ‘Prime’ label to use the company’s own FBA service.

Process integration in the e-commerce value chain

Guest writer:
Dr. Borbála Dömötörfy
researcher
Pázmány Péter Katolikus Egyetem Versenyjogi Kutató Központja

As there are more and more new challenges in online retail – from increasing competitive pressure and shopper needs to the appearance of new consumer segments due to the pandemic – a new practice has been established in e-commerce: fulfilment. This is basically a package of integrated logistics services that covers the whole path of products purchased online, from the buying decision to handing over the item. In many cases online retailers outsource fulfilment. Amazon.it, which according to the decision of AGCM has a dominant position in the Italian market of online intermediary services, is a key player in the domain of fulfilment services too – with the FBA service. With the conquest of e-commerce not only logistics processes have changed, but platforms also became main actors and this entailed the appearance of new success factors in online sales, such as visibility – informing shoppers about the existence of a given e-commerce business.

Visibility as a success factor

Advantages providing visibility and sales increase have a fundamental impact on the room for manoeuvre for retailers selling via platforms, as online marketplaces often unite the product selections of several competitors. On the Amazon.it platform it is having the ‘Prime’ label that makes it easier for retailers to reach the more than 7 million regular customers. AGCM came to the conclusion that the platform abused its dominance position when they only allowed the use of the ‘Prime’ label to those online retailers who were using the FBA service. The decision is going to be highly influential in the practices of European platforms and of outsourcing fulfilment processes alike, as in addition to imposing a fine, AGCM also made taking certain steps compulsory for Amazon.it. For instance within a year after the decision, the company must introduce and make public a non-discriminative system of criteria in the fields of discounts and visibility. //