Amazon Fined 10 Million Euros for Unfair Practices in ‘Recurring’ Purchase Prompts

In a significant regulatory action, Italy’s competition authority, AGCM, has levied a hefty fine of 10 million euros ($10.6 million) against two Amazon entities for engaging in unfair commercial practices. The authority’s decision, announced on Wednesday, targets the way Amazon prompts customers on its Italian website to opt into “recurring” purchases rather than making “one-time” buys.

According to the AGCM, Amazon has configured its online purchasing process in a way that the option for regular purchases is “pre-selected by default” across a broad range of products. This design choice, the authority argues, could mislead consumers into buying items periodically, regardless of actual need. “The graphic layout of the pre-selected recurring purchase option may lead consumers to buy products periodically — even when there is no actual need — thereby limiting their ability to choose freely,” stated the AGCM, reported by Yahoo.

The watchdog further criticized Amazon for practices it deemed contrary to the principles of professional diligence, emphasizing that as a prominent market player, Amazon should ensure its interfaces facilitate free and informed decision-making by consumers. The ruling specifically affects Amazon Services Europe based in Luxembourg and Amazon EU.

In response, Amazon has expressed strong disagreement with the findings and penalties imposed by the Italian authority and announced plans to appeal the decision. “Every day customers benefit from the Subscribe and Save programme by saving money and time on regular deliveries of items they routinely use,” the company defended in a statement. Amazon also highlighted that its subscription program has allowed Italian customers to save over 40 million euros.

Additionally, the AGCM addressed concerns regarding Amazon’s practice of pre-selecting a “paid fast delivery” option during the checkout process. However, no further penalties were proposed in this regard after Amazon committed to making the “free delivery” option the default choice moving forward. The company has also agreed to compensate consumers who lodged complaints last year about this issue.

This case underscores ongoing tensions between large e-commerce platforms and regulatory bodies aiming to ensure fair consumer practices and prevent manipulative commercial tactics. As Amazon prepares to challenge the ruling, the outcome of this appeal will be closely watched by regulatory bodies and companies across the e-commerce industry, potentially setting a precedent for how online sales tactics are regulated in Europe and beyond.

Italy fines Amazon over 'recurring' purchase option#Italy #Amazon https://t.co/10Rjb21e9o

— The Peninsula Qatar (@PeninsulaQatar) April 24, 2024