Amazon’s (Luxembourg-based) Polish e-commerce site, Amazon.pl (Amazon EU SARL) has been fined by Poland’s competition and consumer protection watchdog following customer complaints that their orders were being mysteriously cancelled.
Massive Fine
Following an investigation about the complaints, the President of Poland’s UOKiK consumer protection watchdog found Amazon EU SARL guilty of infringement of collective consumer interests and imposed a fine of more than 31 million zlotys / £6,342,000.
What Happened?
In short, the Polish watchdog found that customers shopping on Amazon’s Polish website had clicked on the “Buy Now” and “Proceed to Checkout” options (paying for products such as popular e-book readers), assuming that this constituted a sale, and then waited for delivery. However, the delivery didn’t happen due to Amazon repeatedly cancelling the orders because it allegedly thought the sales contract and delivery obligations to the customer were only active after an item has been shipped, rather than when the customer purchases it.
The complaints from disappointed customers who had been waiting for cancelled orders then led to the investigation, ultimately resulting in Amazon within Poland being fined.
Reasons
The President of Poland’s Office of Competition and Consumer Protection (UOKiK) imposed the 31 million zloty fine on Amazon EU SARL for reasons related to infringing collective consumer interests, which were:
– Misleading sales and delivery practices. Amazon’s Polish website was deemed to have misled consumers about the timing of sales contract conclusions, product availability, delivery times, and consumer rights. For example, with regards to Amazon offering “Guaranteed Delivery” (i.e. the product should reach the consumer within a certain period of time), if this doesn’t happen, the consumer can request a refund of the delivery fee. However, it was found in the case of Amazon Poland that consumers didn’t receive information about the rules of this service before placing an order – the information was only made available at the order summary stage (if the consumer had decided to go through several steps defining the delivery details). This meant that if they hadn’t, they wouldn’t have been aware of their rights and may not have requested a refund or received it (when shipping was delayed). Also, information about the “Guaranteed Delivery” was found not to have been included within the order confirmations customers received.
– “Dark pattern” design tricks. This refers to Amazon being judged to have used deceptive design elements that could inject a false sense of urgency into the purchasing process, misleading shoppers about elements like product availability and delivery dates. As outlined by UOKiK’s President, Tomasz Chróstny, “Information about the availability of a product and its fast shipping is very valuable for consumers and for many people it can be the main reason why they make a purchase decision. However, such information must not be a decoy. If a trader gives a specific delivery date, they must meet it. This practice by Amazon is categorised as ‘dark patterns,’ as it uses pressure to make the consumer order the product as soon as possible.”
– Cancellation of customers’ orders after payment. The practice of Amazon treating orders as non-binding until the shipment/delivery was confirmed, allowing the company to cancel them even after consumers had paid was found to be misleading as consumers believed they were concluding a sales contract upon payment.
– A lack of clarity in communication. Information crucial to understanding Amazon’s sales contract and delivery guarantee terms were found not to have been made easily accessible to consumers, and to (often) have been presented in a way that was hard to find or read (such as using a grey font on a white background, at the bottom of the page).
– The use of deceptive countdown clocks. Amazon also faces criticism in this case for having displayed countdown timers and stock availability claims that suggested imminent deadlines for order placement or implied limited product availability, without guaranteeing timely delivery.
Amazon’s practices in this case were therefore deemed to potentially mislead customers as regards the nature of their transactions on the platform, affecting their consumer rights and trust.
What Does Amazon Say?
In its defence, Amazon Poland highlighted how it prioritises fast and reliable delivery across a wide selection of products and that Amazon.pl offers millions of items with fast and free Prime delivery. Amazon also emphasised its continuous investment and effort to provide customers with a clear and reliable delivery promise at checkout. However, it acknowledged that while most of their deliveries arrive on time, they are committed to rectifying situations promptly whenever delays or order cancellations occur.
Amazon also mentioned its collaboration with the UOKiK, proposing multiple voluntary amendments to further improve the customer experience on Amazon.pl, but stated that it strongly disagreed with the UOKiK’s assessment and penalty. Amazon also says it intends to appeal the decision.
What Does This Mean For Your Business?
This story illustrates how any practices that could mislead customers regarding the nature of their online transactions (thereby affecting their consumer rights and trust) can lead to some painful consequences for retailers.
Although Amazon doesn’t agree with the decision and plans to appeal, the accusation and details of “dark patterns” outlined by the UOKiK in this case could be potentially quite damaging for Amazon’s reputation and could lead to them being scrutinised even more closely in the future.
While being potentially beneficial for Amazon in terms of operational flexibility, sales, and competitive positioning, the practices outlined by the UOKiK clearly backfired in a spectacularly expensive way for Amazon with a £6,342,000 fine which may be powerful enough to make Amazon more careful in future.
This case also underscores the critical importance of transparency and honesty in online retail operations. Businesses, large and small, must recognise that the digital consumer experience is not just a pathway to transactions but can have an effect on brand reputation and customer loyalty. The regulatory action taken against Amazon by Poland’s UOKiK should, therefore, serve as a potent reminder that misleading practices (intentional or not) can have severe legal and financial repercussions. It highlights the necessity for all e-commerce entities to meticulously review and possibly revamp their online sales practices, ensuring they are not only legally compliant but also aligned with ethical standards that prioritise consumer rights and transparency.
