On Thursday, Italy’s antitrust authority announced that it had penalized Amazon 1.13 billion euros ($1.28 billion) for alleged market dominance abuse, one of the largest fines ever levied against a US internet company in Europe.
Amazon said it would challenge the Italian regulator’s decision because it “strongly disagreed.”
Following a series of privacy and disinformation incidents, as well as concerns from certain firms that they misuse their market position, global regulatory scrutiny of digital giants has increased.
In Europe, Alphabet’s Google, Facebook Inc, Apple Inc, and Microsoft Corp have all received more scrutiny.
Amazon has used its dominating position in the Italian market for marketplace intermediation services to encourage merchants on Amazon.it to use its own logistics service, Fulfilment by Amazon (FBA), according to Italy’s watchdog.
According to the authorities, Amazon linked the usage of FBA to a series of special perks, including the Prime label that helps enhance visibility and sales on Amazon.
“Amazon prohibits third-party sellers from linking the Prime mark with offers that are not managed through FBA,” the company stated.
The Prime logo makes it easy to sell to Amazon’s loyalty program’s more than 7 million most loyal and high-spending customers.
The antitrust regulator also stated that it would impose corrective actions that would be reviewed by a monitoring trustee.
FBA, according to Amazon, is a “totally optional service” that the majority of Amazon third-party merchants do not use.
“When sellers pick FBA, they do so because it is efficient, convenient, and price competitive,” the American company stated in a statement.
“The proposed fine and remedies are unreasonable and unjustified,” it continued.
The European Commission said it worked closely with the Italian competition authority on the matter as part of the European Competition Network to ensure that its two ongoing investigations into Amazon’s business practices were consistent.
The first was launched in July 2019 with the goal of determining if Amazon’s usage of sensitive data from independent shops selling on its marketplace violated EU competition rules.
The second that took place in late 2020 focused on the possibility of preferential treatment for Amazon’s own retail offerings and marketplace vendors that use Amazon’s logistics and fulfillment services.
The Commission stated on Thursday that “this investigation complements today’s judgment of the Italian competition authority, which targets Amazon’s behavior in the Italian logistics sectors.”
