Amazon, the world’s largest online retailer, has shut up shop in France because the cost of compliance with the country’s Covid-19 emergency measures is deemed to be too high, reports Compliance Week.
Amazon’s six French warehouses, which employ around 10,000 workers on permanent and interim contracts, have been shut since April 16th after court rulings said the company could only continue to operate if it complied with two conditions.
Firstly, as most other retailers are effectively locked down, Amazon would need to limit deliveries to a list of essential goods only – health items, food, pet food, and office electronics, such as laptops. Secondly, following a series of complaints and walkouts, Amazon would need to carry out an assessment of the health risks to its employees in consultation with French labor organizations, including the hardline SUD union and the CFDT, France’s biggest union, and make appropriate changes to ensure social distancing where necessary. The court said it would review Amazon’s progress in meeting these requirements after a month.
Both conditions came with substantial penalties for non-compliance – a 1 million-euro (U.S. $1.09 million) fine per day and per violation.
Amazon was incensed. On April 24th, the company appealed the court’s decision but lost. In its defense, the judge saw Amazon had tried to engage and improve safe working conditions and so reduced the potential fine for each infraction to 100,000 euros.
Highlighting the potential costs of non-compliance, Amazon said in a statement, “our logistics operations are technically complex and the court’s fine of 100,000 euros for any infraction means that even accidental shipping of non-authorised products, on the order of 0.1 percent of the total, could lead to over 1 billion euros of fines per week.”
Amazon France’s chief executive, Frédéric Duval, also denounced the court’s order for being too vague. “There is a huge ambiguity,” he told RTL radio. “Is a nail clipper a hygiene product? Is a condom a medical item? I’m not able to define that.”
As a result, instead of playing ball, the company chose to close all its warehouses up to May 13th at least, thereby delaying orders. It also tried – unsuccessfully – to benefit from a state scheme under which the French government would pay 70 percent of the gross salary of the 10,000 workers the company placed on furlough as a result of the closures, which the French labour ministry said were “the consequence of a court ruling and not of a drop in activity.”
Amazon is no stranger to using shutdowns as a political weapon. In 2018, the company blocked shipments to Australia from its overseas stores after a sales tax was imposed on imported goods. But that standoff came to an end when Amazon backed down six months later, reopening overseas shipments in time for the Black Friday sales.