Topline
Amazon will cancel a planned additional 2% fee for third-party merchants not using the company’s delivery services, according to Bloomberg, a sudden change that comes as the e-commerce giant is reportedly expected to face a potentially historic antitrust lawsuit that could result in the breakup of the company.
Amazon’s third-party sellers make up a majority of the company’s sales (Photo by Soeren … [+]
Key Facts
The fee was initially announced in August and would have imposed a 2% fee on third-party merchants using Amazon’s Seller Fulfilled Prime program, which allows merchants to ship products from their own warehouses.
Merchants, who are already charged fees ranging from 8% to 15% on each item sold, told Bloomberg last month the fee was meant to push sellers into using Amazon’s own shipping services.
Amazon attributed the decision to merchant feedback, according to documents cited by Bloomberg, which was told by Amazon the fee would have helped cover infrastructure costs.
Amazon did not immediately respond to Forbes’ request for comment.
Chief Critic
“The 2% Seller Fulfilled Prime fee was intended to cover our costs, but after careful consideration we’ve made the decision not to implement this program fee to ensure seller sentiment related to the fee does not impact program participation,” an Amazon spokesperson told Forbes on Wednesday.
Big Number
60%. That’s the share of Amazon sales that third-party sellers account for on the e-commerce website.
Key Background
Amazon’s third-party sales policies are one of the subjects reportedly set to be scrutinized by an upcoming antitrust lawsuit from the Federal Trade Commission, according to the Wall Street Journal, which reported the lawsuit will suggest “structural remedies” at Amazon that could result in a breakup of the company. The company’s fulfillment service will also reportedly be targeted by the lawsuit, which also alleges three executives refused to act on company misconduct, according to the Journal. An Amazon spokesperson told the Journal the decision to accuse the executives in the lawsuit was “unfounded and represents a radical departure from the FTC’s own standards for such claims.” Amazon is also facing a separate antitrust lawsuit from California. The lawsuit accuses the e-commerce giant of antitrust violations that stifled competition and resulted in inflated fees and higher prices, according to a filing.
Further Reading
Here’s How Amazon Could Be Broken Up After An FTC Lawsuit (Forbes)
Amazon Scraps Planned Merchant Fee With Antitrust Suit Looming (Bloomberg)
Source: https://www.forbes.com/sites/antoniopequenoiv/2023/09/20/amazon-ditches-planned-merchant-fee-ahead-of-ftc-antitrust-lawsuit-report-says/