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The political demands on market dominance from Amazon and company are not new. So far this year, an increased advertising tax of five percent has been implemented, which is specifically aimed at international digital groups. In the eyes of the private employees union (GPA), the environmental organization Greenpeace and the trade association, this is not enough. On Tuesday, hours before the EU introduces laws for digital markets and services, they held a joint press conference and displayed levers that also worked at the national level, it was said.
Amazon is making billions in profits, especially in the pandemic due to the boom in online commerce, at the expense of labor law, the environment, and retail, and it is managing to pay little to no taxes. The year of the crisis brought Amazon a 40 percent increase in sales worldwide, in Austria alone the group had a turnover of more than 850 million euros.
And last year Amazon received a tax credit of 300 million euros from EU countries. This development must be stopped. The demand is fair taxation, the enforcement of workers’ rights and the promotion of local management of recycling rather than a “flood of packaging”.
Pack floods and “spy”
Greenpeace’s Alexander Egit explained that Amazon is now a huge environmental problem and is “fueling the climate crisis.” All products that are shipped through Amazon must be repackaged. In Austria that’s 250 million packages per year, 150 million of which are sent to individual customers. 33 million packages would be returned, of which 1.3 million would be destroyed immediately. “All companies in Austria pay a tax on packaging,” says Egit. Amazon, on the other hand, is not responsible. Egit called for the responsibility of the platform, for example, to ensure that Amazon has to pay a fee for packaging.
Action required against online groups of beneficiaries
Many online companies take advantage of loopholes. Unions, sales representatives and environmentalists want action against favoritism.
The business model is also “extremely energy intensive”. And there is a democratic component: internationally, employees campaigning for climate protection are threatened with dismissal. There are also espionage activities, for example against Greenpeace, Egit. Here, too, the federal government must act.
“Much money left”
GPA President Barbara Teiber added that Amazon is trying to stop works councils around the world. Disproportionate working conditions were also discovered at the distribution center in Großebersdorf, Lower Austria, according to Teiber, including supervision of staff, disciplinary measures and “degrading regulations”. The situation of the couriers is equally dramatic: they are pushed into leasing contracts or false self-employment and report 12-hour shifts. In a first step, the proportion of temporary work agencies should be reduced to 50 percent, demanded Teiber.
Permanent digital establishment
Digital permanent establishment is a term in international tax law. The objective is to record the sales and profits generated by a company that does not have a permanent commercial establishment in the country.
Austria may also charge taxes on the sale of user data and platform fees. Until the demand for a permanent digital establishment can be implemented, the tax justice must be different: A “fictitious income tax” should temporarily tax five percent of sales. “There are also measures at the national level,” Teiber said. “Here is a lot of money thrown in the street.”
Imbalance of freedoms
The managing director of the trade association, Rainer Will, criticized that the high concentration of the market in online commerce is “the result of years of regulatory failures.” The ten largest web stores together generate almost half of all Austrian online shopping sales, the market leader, Amazon, accounting for a quarter. The pandemic has exacerbated the situation: While Amazon benefits from it, the existence of around 6,500 national retailers is now at risk.
Will calls on the government to implement its own program by closing regulatory and fiscal loopholes. He also defended the platform’s responsibility for counterfeit products. The damage caused by product piracy is enormous. Domestic customers would be “inundated with counterfeit, incorrectly declared products” and packaging waste would also be loaded incorrectly. That must change through stricter customs controls.
The EU Commission also wants more fairness in the market and stricter taxes. On Tuesday he presented two proposals: the Digital Services Law (DSA) and the Digital Markets Law (DMA). Uniform rules across Europe should make it easier for small businesses to survive in competition. It will be years before it can be implemented.
