Sam Bowman on Amazon's Italian Fine - International Center for Law & Economics

Sam Bowman on Amazon’s Italian Fine

TechMonitor – ICLE Director of Competition Policy Sam Bowman was quoted by TechMonitor in a story about Amazon’s €1.3billion fine by Italy’s antitrust regulator. The full story is available here.

But not everyone is convinced. Sam Bowman, director of competition policy at the International Center for Law & Economics think tank, says Amazon argues that FBA offers a more reliable service to consumers than other delivery options, and notes that there is no suggestion in the Italian ruling that consumers were harmed by Amazon’s behaviour. “It’s a philosophical question of whether Amazon has the right to prioritise services in this way if it wants to,” he says. “What this kind of ruling does is reduce Amazon’s role to a facilitator of the network between customers and businesses.”

Bowman says the role of platforms like Amazon goes beyond that of an intermediary and argues they are useful for consumers who are not confident accessing digital markets. “They bring order to the chaos of the internet,” he says. “For a lot of people, navigating that chaos is very difficult, takes a lot of time and carries a lot of risk. The platform is not just a conduit, it applies rules and quasi-regulations on the market it creates. We hope those rules will benefit customers, and if not they will shop elsewhere. The logic of this decision is that Amazon does not have the right to apply its own rules, and is simply a downpipe between consumers and sellers.”

…But Bowman believes the impact of the ruling – and the DMA – could be that platforms such as Amazon withdraw their own products from the European market and take a more neutral position. “Neutrality sounds quite appealing, but in terms of usability it may make things worse for consumers,” he says. “A platform like eBay is much more open and neutral than Amazon, but not necessarily better. I think a consequence [of the self-preferencing ban] will be the eBay-ification of a lot of tech platforms.”

Bowman says this change could take some time, depending on how the final DMA takes shape. “At the moment the way it is written seems very prescriptive about what can and can’t be done. We don’t know if this will lead to companies changing what they do overnight, or whether they will continue as usual and wait to discover how the European commission interprets these rules through rulings or lawsuits.”

Businesses using Amazon’s marketplace in the UK are likely to see fewer changes, Bowman says, as the country’s proposed legislation for regulating digital platforms is less prescriptive, focusing on outcomes rather than strict rules. “The UK approach is likely to be a lot softer, with the companies developing a relationship with the regulator,” he says. “I’m not convinced this will do much for competition, but the ambiguity means it is less likely to generate unsatisfactory outcomes where ‘good’ practices are banned because they don’t comply with the rules.”