Image: Reuters

Amazon fined $1.3 billion for abusing market position in Italy

Image: Reuters

Antitrust officials in Italy fined Amazon $1.3 billion (€1.1 billion). The corporation is accused of abusing its dominance in the online shopping sector to persuade Italian retailers to utilise its Fulfillment by Amazon logistics service (FBA). The ruling will be appealed, according to Amazon.

As part of a years-long dispute over internet antitrust issues, the fine is one of the highest ever imposed by a single country in the EU. Italian antitrust regulators penalised Amazon and Apple last month for allegedly collaborating to limit the supply of Apple and Beats items.

However, Amazon’s sanction was only $77 million (€69 million) – a drop in the bucket compared to today’s ruling. (The lawsuit is still being contested by both companies.)

The Autorità Garante della Concorrenza e del Mercato, or AGCM, is particularly concerned with the benefits Amazon provides to sellers on its platform who also pay to use its FBA logistics service in its new verdict.

FBA sellers can use the Prime fulfilment label on their products and participate in Amazon events like Black Friday, Prime Day, and Cyber Monday.

“The investigation has ascertained that these are functions of the platform that are crucial for the success of sellers and for increasing their sales,” said the ACGM in a statement (translated via Google).

“In doing so, Amazon has harmed competing e-commerce logistics operators by preventing them from proposing themselves to online sellers as providers of services of a quality comparable to that of Amazon’s fulfillment. These conducts have thus widened the gap between Amazon’s power and that of the competition also in the e-commerce order delivery business.”

The scale of the fine, according to the ACGM, demonstrates the seriousness of Amazon’s approach and its long-term nature.

In addition to paying the penalties, Amazon must adjust its business practises in Italy by providing the same “sales and visibility advantages” to all third-party merchants on its platform, regardless of whether they use Fulfillment by Amazon. Amazon has a year to comply with these decisions — unless it wins its appeal.

“We strongly disagree with the decision of the Italian Competition Authority (ICA) and will appeal,” the company said in a statement (via Engadget). The proposed fine and remedies are exorbitant and unwarranted.”