Merchants operating on Amazon.com are urging the e-commerce giant to reduce fees, even as concerns mount over the US Federal Trade Commission’s (FTC) recent lawsuit filed on Tuesday. The lawsuit has the potential to impact Amazon’s advertising business, raising questions about its efficiency, reported Reuters.
The FTC’s highly anticipated antitrust lawsuit seeks to explore the possibility of compelling Amazon to divest certain assets. The Government’s allegations revolve around Big Tech’s alleged monopolisation of the most lucrative aspects of the Internet.
Amazon’s marketplace boasts over 9 million merchants, providing the platform with a consistent stream of revenue. The company collects fulfillment fees for deliveries, advertising fees for promoting products, and less conventional “sellers’ fees.”
Now, the FTC, joined by 17 state attorneys general, is pushing Amazon to eliminate fees that often force merchants to rely heavily on the e-commerce giant, including the costly advertising fees.
While some merchants welcome the prospect of reduced seller and advertising fees, others express concerns that completely discontinuing Amazon’s advertising services could hamper their ability to reach buyers.
According to Reuters, the FTC’s investigation revealed that the company’s fulfillment fees surged by nearly 30 per cent between 2020 and 2022.
An Amazon spokesperson responded in a statement, saying, “If the FTC gets its way, the result will be fewer products to choose from, higher prices, slower deliveries for consumers, and fewer choices for small businesses – which is a violation of antitrust laws.”
Rick Dieterle, owner of the party supply company Street Taco Brands, voiced frustration over the escalating vendor fees, encompassing fulfillment, shipping, advertising, and storage services. Dieterle relies on Amazon’s fulfillment and advertising services to drive his merchandise sales.
“There’s no way you can gain popularity on Amazon without paying a lot of money for advertising,” Dieterle emphasized.
The FTC alleges that Amazon’s advertising practices have led to search results inundated with sponsored content, creating barriers for customers seeking organic results.
