If the Italian market is too small to justify 1.3B costs of doing business Amazon has only three options there:

1. Stop doing what it's doing now and become fair and transparent, at least in Italy

2. Move out of Italian market

3. Keep paying even increasing fines and change nothing

In all those cases consumers in Italy would profit, either from fair market or from more tax money.

EDIT: formatting the list

There is a fourth option, that is them retreating from handling logistics for Italian sales only.

TBH the most realistic option is something around 3: pay fines, change nothing (maybe rais prices a bit), make noise to get consumers on its side (Italians disproportionately like Amazon, because of its no-question-asked policy on returns is an absolute rarity there), wait for a friendly government to fix things in its favour.

> In all those cases consumers in Italy would profit, either from fair market or from more tax money.

> 2. Move out of Italian market

this would be a net negative all around. especially for consumers.

I don't want to go down the rabbit hole that is politics, but Italian usually don't benefit from "more tax money', the government is not very good at handling money

> Italian usually don't benefit from "more tax money'

Like Amazon would have used that money for the greater good instead.

Like the US is much better at this, throwing trillions of public money in weapons while they can't seem to afford free public healthcare.

The US already spends twice as much on healthcare (around $1.5T) for existing public programs than it does on national defense (around $718B). Source: https://datalab.usaspending.gov/americas-finance-guide/spend...

I'm not sure if I'm misreading the chart, but Health sits just above National Defence, with $796.8 B (12%) of expense, not $1.5T.

Anyway it only makes it more absurd; that the US as a nation manages to be the first military world power using less money than they spend to have a broken healthcare system that ruins people's lives.

It looks like Medicare spending was also included to arrive at $1.5T. A portion of "veteran's benefits" should probably also be included for the VA medical system.

> Like the US is much better at this, throwing trillions of public money in weapons while they can't seem to afford free public healthcare.

The US can afford free public healthcare. It could probably afford free public healthcare with its current public healthcare spending (per capita it spends far more than most developed countries providing that, and per GDP it spends a similar amount), but instead it's spends hyper inefficiently so as to maintain a private healthcare system that costs even more on top of the public system.

Weapons are irrelevant to that, though the US spends too much (and too inefficiently) on those, too.

I'm not saying that Amazon shouldn't pay because they will use the money better. Mine was a response to the parent comment saying that the Italians will benefit from "tax money".

I do believe that is good to tax/fine Amazon appropriately, I just don't believe that the Italian government will use that money for the benefits of the Italians.

Unless you know better, this will also go to pay public health care and public education (among many other things as will be added money to the state revenue)

The rest is just false allegations

This doesn't mean that companies shouldn't pay taxes.

Also this is not a tax but a fine. There's a big difference

I didn't said anywhere that companies shouldn't pay taxes... If was for me companies should pay the same amount of taxes as civilians ( 60% ) if not more

So your useless comment about government not being able to handle the money is related to what sorry?

If you're happy that they should pay taxes then I don't get the reason of your comment.

To the parent comment stating "Italians will benefit from more tax money" ( the parent comment has been edited and the phrase rewritten to state that the country will benefit )

People will indirectly benefit form these money too, of course. Since they'd go to pay healthcare and public education

I don't think we know yet, as Amazon EU did not report per-country in 2020 according to a quick search; but the total revenue was 44bn, and the biggest EU markets are always disproportionately Germany, France, and Italy, so I would expect Italy-sourced revenues to be in the 5-10bn per year.

Revenue, yes, but for a webshop with typically low margins, the profit will be much lower.

I believe Amazon has quite fat margins as a monopolist? The days of subsidising losses in favor of market share are long gone as the competitions has mostly been crushed.

“Fat margins” is relative. For Apple, it may mean 50%; for a webshop, it may mean 10%.

My point, however, is that we need to look at their profits, not revenue, to understand the impact of the fine.

In the worst (for Amazon) scenario, we're looking at 20% of localized revenues over a year. Amazon reported an average 5-7% profit margin in the last few years. Even in the worst case, they will be back in pure profit after just a few years...

For illustration, 5% of 5bn is 250m, so if the fine is 1.1bn, it will take them 4 years to absorb it from localized profits only. Peanuts.

Assuming they're able to play by the rules, they might just not be able to. We've seen Google fined over and over for things. I'm not sure Amazon would be different (I guess they have to to remain profitable or pull out).

That Google keeps getting fined only says that the earlier fines were not enough.

They definitely are capable of playing by the rules.

No, unless things are different in Europe. In the US they aren’t even close to a monopoly so they have to compete with Walmart, Best Buy, Target, etc.

Suffice to say that, if the 5-10B rev estimate is indeed true, the margins can not be fat enough to shrug off a 1B fine.

On the specific market. But Amazon EU as a whole makes 44bn per year, which at 5% means 2.2bn per year.

The hit is not sustainable if replicated across two or three EU markets, but if limited to Italy it's just a cost of business.

Business wise, it does seem a little odd to consider Amazon EU as one package, when operating income and costs are as localized and non-homogeneous as they are.

Italian here: probably yes

Since it became available here it became the de-facto standard for online purchases, most people don't even look at other marketplaces now and are often willing to pay more just because the order is coming from Amazon (even when it's a 3rd party seller)

If I order something in Switzerland from Amazon it sometimes ships from Italy

That's really interesting considering Amazons huge presence in Germany!?

I live in Italy and I often receive packages shipped from different European countries.

Yes.

Insightful, thanks for the data and thoughtful discussion. I'm now convinced this is just a piss in the ocean for Amazon.