Amazon Prime Now suffers setback (AMZN)

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Amazon Prime Now lets customers receive goods within a matter of hours, but one group is criticizing the same-day delivery service.

The e-commerce giant launched the service in Paris last week, which marked the third European market after London and Milan in which Prime Now is available. Amazon Prime subscription members in these areas can take advantage of Prime Now for an annual fee of €49. Customers can have one-hour delivery for €5.90 or free two-hour delivery on orders of €20 or more.

Prime Now currently offers approximately 18,000 items, which includes both fresh and frozen produce, and runs until 10 p.m. seven days a week. On Sundays at this time, most businesses in Paris are closed.

But these extended hours have caused the French government to peg Prime Now as a problem for local businesses. The mayor of Paris has issued a statement on the negative effect of Prime Now on local merchants due to "unfair" competition.

As a result, the French government will meet with local legislators to discuss options for protecting these businesses, reports The Verge. One option would be to encourage local vendors to sell on Prime Now, which would keep Amazon's presence in the region.

Amazon has had friction with the French government in the past. In 2014, the nation answered Amazon's free shipping service by passing a law that banned online retailers from offering free shipping on discounted books in order to protect local book sellers. Amazon responded by charging €0.01 in shipping on these products.

The e-commerce giant also tried to acquire a controlling stake in French shipping company Colis Privé, but the French Competition Authority complicated the deal and Amazon backed off.

France's total e-commerce market is the sixth-largest in the world and third-largest in Europe behind only the U.K. and Germany, as total e-commerce revenue in 2015 hit $42 billion, according to PFSweb. And the number of online shoppers in France has climbed from 32 million in 2012 to 36 million in 2015, according to Ecommerce Foundation.

French regulations have handicapped Amazon in some ways, but it is still the most visited e-commerce site in the nation. The government's efforts to protect local businesses may dissuade some foreign companies from trying to enter France, but the size and growth of this market should outweigh any concerns.

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