The British government says Amazon.com's U.K. division must be more accommodating to customers who return merchandise.
Amazon customers around the world have to pay the cost of shipping unwanted merchandise back to the company, unless Amazon made an error or the goods arrived damaged. British trade authorities, however, say the company must pick up the tab--no matter what the circumstances--as long as the customer returns it within seven days of the purchase.
On Thursday, the United Kingdom's Office of Fair Trading (OFT) said Amazon.co.uk and Bol.com, a division of Bertelsmann and Amazon's main competitor in Europe, had agreed to comply with the tougher regulations.
But on Friday, Amazon disputed any agreement had been reached or that Amazon was out of compliance with any U.K. regulations.
"The OFT's release implies we've been brought into line," said Amazon in a statement. "We haven't...The regulations do not state that normal delivery charges should be refunded. This is the OFT's interpretation."
An Amazon representative said that company executives continue to discuss the issue with OFT.
Europe is the cornerstone of Amazon's overseas operations, which poured $226 million into the company's coffers in the first quarter. Much of Amazon's future growth is expected to come from international units, and the United Kingdom is one of its most profitable. Combined sales at Amazon's units in Germany, Japan, France and the United Kingdom jumped more than 70 percent from last year.
The controversy over shipping costs is the latest example of how rules of trade on the Internet are being made up as countries and companies go along. Rules regulating e-commerce differ markedly from country to country.
U.K. trade officials argue that shoppers who buy off the Web, telephone, fax or any other channel where face-to-face contact with the seller is missing, should be allowed time to consider whether they wish to keep it or not.
"The Distance Selling Regulations give consumers the security to buy from home," OFT Director General John Vickers said in a written statement. "They can change their mind once they have received and seen their goods."
Complying with the OFT's request means higher costs for Amazon and other online merchants, which could end up being passed on to consumers.
"This is not good for the fledgling e-commerce industry in the U.K.," Amazon said in its statement.