Amazon drops planned merchant fee as FTC lawsuit looms

FILE PHOTO: The logo of Amazon is seen, November 15, 2022. REUTERS/Pascal Rossignol///File Photo/File Photo

(Reuters) is scrapping a plan to charge merchants who do not use its shipping services an additional fee, a company spokesperson said on Wednesday, signaling that the e-commerce giant was taking a cautious approach to operations amid mounting antitrust scrutiny.

Effective Oct. 1, Amazon was planning to impose a new 2% fee on every sale by third-party sellers that ship their products themselves, according to media reports in August. The company said the fee was intended to shield itself from higher costs.

"After careful consideration, we've made the decision not to implement this program fee to ensure seller sentiment related to the fee does not impact program participation," an Amazon spokesperson told Reuters.

The reversal in Amazon's plans comes when the company is facing a potential lawsuit from the U.S. Federal Trade Commission. Bloomberg first reported the news on Wednesday.

The fee would have applied to thousands of merchants who ship orders through Seller Fulfilled Prime - Amazon's program that guarantees swift product delivery, even though the company does not handle the shipping itself, according to the report.

The FTC is expected to file a lawsuit against Amazon later this month after the company did not offer concessions to settle antitrust claims, the Wall Street Journal reported.

The FTC began probing the company during the Trump administration, when it also launched investigations into other tech majors. Amazon has been criticized for allegedly favoring its own products over those from outside sellers on its platform.

(Reporting by Deborah Sophia in Bengaluru; Editing by Pooja Desai)

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