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Controversial legislation in Congress is said to be the end of the Amazon Prime. Why and what does it mean?

While digital services continue to be the legislative target, some bills considered in Congress will have permanent damage to widely used services. Two weeks ago, senators introduced Clobucha, Grassley and other coordinators S. 2992, “American Innovation and Choice Online Law” (AICOA). This bill is the same as the House of Representatives of the Republic of Sicily. HR 3816, “American Election and Innovation Online Law” (ACIOA), introduced earlier this summer.

While the Senate edition contains minor differences, both accounts have the same detrimental effect on the US economy and consumers in general. Both technology companies are targeting difficult regulations, and they will have serious consequences for consumers. One result is the collapse of the Amazon Prime, as is currently known. This article explores why this is so.

AICOA and ACIOA Amazon Prime target three key functions that make it attractive and useful to users: (1) self-selection; (2) Adjusting conditions on the purchase of another service; And (3) Gathering recommendations for Amazon customers. According to the Senate, Each As long as the infringement lasts (more than double Amazon’s net profit), it will result in a fine of up to 15 percent of its total revenue and will prevent companies from developing traditional competitors or consumers’ positive defenses. What this means in the case of Prime While there is ample evidence that consumers will benefit from a two-day shipment if combined with other services, none of this evidence is useful as regulators impose penalties.

1. The effect of self-selection on the impact of prime

Both the House and Senate versions of the bill create a “no-vote” rule. Anyone who owns a grocery store understands what it is Self-selection The ‘home’ or shop brands are usually located at the top or next to the most popular premium brands. By launching a store brand, the store hopes to compete with name brands and promote more affordable options for consumers. But this is prohibited online.

Section 2 (a) (1) makes it illegal for a company to engage in unfair treatment of other consumer goods, services or trade routes on the covered platform. It hurts the material on the covered platform. This section affects Prime in two ways. Adherence to Part 2 (a) (1) rejects Amazon’s FBA – an option for sellers to pay Amazon to transport products from the seller’s warehouse to an Amazon customer within two days. Or ask Amazon to offer all sellers FBA prices. This is because Amazon sends its own products using FBA, and selling FBA to third parties for anything other than expenses is “discriminatory” on the account.

Amazon could not make a profit from this Expensive but innovative supply chain services need to be expanded and maintained to comply with the proposed law. all of them To participate in services by meeting potential third-party vendors. Legal expenditure obligations, coupled with the risk of non-refundable liability, make this service obsolete by consumers and sellers.

Second, it should be noted that the ban on self-selection blankets also requires Amazon to remove premium badges from prime-eligible offers (because this can be interpreted as liking premium offers rather than non-premium offers). The cost of the service is greatly reduced by the rapid delivery of customers and the ease of access to first-class customer service and return on product handling.

2. Preferred placement on the purchase of another service

The next step for both utility bills is for Amazon to use the two- or one-day shipping terms for the Prime Minister’s supplement service. It allows members of the Amazon Prime Service to purchase and receive both Amazon products and eligible third-party products within one to two days. Amazon can fulfill this promise by allowing FBA-eligible products to be shipped using FBA. Amazon has launched this for third-party vendors, just like small businesses, which allows them to offer premium deals that can meet customer demand.

Section 2 (b) (2) of AICOA makes it illegal to operate. Partially or not internally provided by the covered platform operator. But that’s why Prime works.

There are two possible options for Amazon to comply with the law, both of which significantly reduce the premium program. One option to ensure compliance is to stop Amazon from offering premium eligibility to third-party sellers. Not only does this strong and low-cost logistics supply chain have a negative impact on sellers who appreciate it, but it also significantly reduces the amount of access customers can get under a premium program. The second option is to allow third-party vendors to be eligible for Prime if they use alternative shipping services. Unfortunately, Amazon has tried this method before, and it completes it via FedEx and UPS without using Prime FBA. Constantly failed. Complete two-day delivery deadline for customers. In any case, most consumer incentives for Prime will be canceled.

3. Protecting the properties of custom tips

The third function targeted by the billing accounts is Amazon’s ability to customize recommendations for customers based on product delivery speed and service characteristics. Section 2 (b) (6) of AICOA prohibits self-selection in step-by-step activities. In addition, Section 2 (b) (6) prohibits the use of standards to support one business user over another. If multiple vendors offer the same product, one of the criteria Amazon will consider when submitting a product is Prime Eligibility, so Prime Subscribers know where to use the service. Section 2 (b) (6) prohibits Amazon from highlighting or offering a non-premium offer on a non-premium basis, thereby barring subscribers from making the most informed choices.

Today, Amazon’s purchasing products highlight high-quality, low-cost, readily available and useful delivery and return services. The law requires Amazon to exclude key items in purchasing results – Prime-enabled shipping and return services and requires customers to privately save on listed products to get guaranteed two-day shipping results.

And for good measure…

In merger cases, AICOA does not require valid damage verification. Under current law, anti-competitive behavior complaints must be supported by some evidence of harm. Here, the legislators suggested that there should be only one “De minimis”Predictably, the practice undermines competition materially. According to such estimates, even the smallest violation can result in billions in fines. This measure promises to increase legal instability and increase litigation. Because a breach can take many years back, targeted companies such as Amazon may be under pressure from investors to reduce risks, and ultimately restructure or eliminate risky products and features, including prime.

In particular, these strict regulations apply to brick and mortar retailers and Foreign technology rivals From any of the same burden, because a large number of designed US companies are US-based users.

Summary

As mentioned above, the AICOA Senate version of the House Bill prohibits Amazon from offering high-value two-day shipping services. The only reason Amazon is not required to stop shipping for two days is if Amazon chooses to exclude all third-party vendors in the marketplace and sell only Amazon products through FBA. Even this result, as we know, breaks Amazon Prime.