The Israeli Postal Company was sued on Sunday for 50.6 million NIS ($14.5 million) over ongoing delays in its delivery of packages.
The lawsuit is centered on claims the postal service favors packages shipped by Amazon.
The class action lawsuit was filed in the Haifa District Court by Mordechai Alon, the owner of an online auction company that requires the use of the post’s courier service, according to the business news outlet The Marker.
He claims that the service has suffered due to the post’s preference for Amazon packages, and that this is a breach of contract between the postal service and consumers, as preferential treatment is forbidden.
Alon claims that since October 2019 he has had complaints from hundreds of customers who did not receive packages he sent to them. He tried purchasing a special delivery service for NIS 514, which also failed to deliver packages on time.
The post knew it would not be able to meet its obligations for timely deliveries due to its preference for Amazon packages, and yet continued to sell its services, he claims.
He estimates that there are some 100,000 business owners who have suffered similar problems.
Postal service workers last month admitted that they received instructions to prioritize packages being shipped by Amazon over other companies, due to Amazon’s purchasing power in Israel, the Kan public broadcaster reported.
In response to reports of the lawsuit, Israel Post said, “The claim has not yet arrived at our offices. When it arrives, we will examine it and respond within the court system.”
On November 11 Amazon launched a Hebrew-language online storefront and the offer of free shipping from the US for orders over $49. Orders over $75 are subject to Israel’s 17% value added tax, or VAT.
The tide of orders, especially during the holiday season, swamped the postal service, which has privatized in recent years and closed some of its post offices.
Amazon does not currently host a gigantic warehouse in Israel of the kind that facilitates cheap and fast delivery to consumers in the US.
Amazon Israel will not comment on any of its operations in Israel.
Israel Post would not comment on its bid for business with Amazon, but stated that the company is “dealing with unparalleled activity in the logistics market, as two packages are received every second by the postal service.”
Online purchases in Israel have been growing at a rate of 20 percent per year, according to the business daily Globes.