In one of the biggest penalties imposed on a US tech giant in Europe, Amazon has been slapped with a whopping $1.28 billion (1.13 billion euros) fine by Italy’s antitrust watchdog for alleged abuse of market dominance and for harming competitors in the e-commerce logistics service.
The Autorità Garante della Concorrenza e del Mercato (AGCM) said in a statement that the tech giant had abused its dominant position in the Italian market to favor its own logistics service Fulfilment by Amazon’s (FBA) adoption by sellers active on Amazon.it by offering them advantages, including access to its “Prime” label.
Prime label helps users to boost sales to its more than 7 million most loyal and high-spending members by increasing their visibility on Amazon.it.
According to AGCM, Amazon prevents third-party sellers from associating the Prime label with offers not managed with FBA, noting at the same time it intends to impose corrective steps in a form of behavioral measures that will be subject to review by a monitoring trustee, including ordering Amazon to set fair and non-discriminatory standards for third-party sellers.
Refusing the proposed fine and remedies as unjustified and disproportionate, the tech giant stressed that FBA is a completely optional service the majority of third-party sellers on Amazon do not use at all, but when they do, it’s because the service is efficient, convenient, and competitive in terms of price.
AGCM launched its probe in 2019 to deal with concerns that Amazon was giving the FBA users a better chance to appear as Amazon’s pick for users searching a product in the “buy box,” a pop-up window that shows customers additional products when they proceed with a purchase.
European Commission launched a probe into the same practices of Amazon in the EU countries but to allow AGCM to proceed, it left Italy out of its scope of the investigation, which Amazon challenged it in January.
Brussels is also investigating Amazon’s potential anticompetitive, focusing on the criteria Amazon uses in the selection of third-party sellers to be included in the “buy box.” It has also charged the US tech giant with misusing data of independent merchants who sell on Amazon’s marketplace to favor Amazon’s own products.
Global regulatory scrutiny of tech giants has been increasing after a string of scandals over privacy and misinformation, as well as complaints from some businesses that they abuse their market power. As well as Amazon, Alphabet’s Google, Facebook Inc, Apple Inc, and Microsoft Corp have drawn heightened scrutiny in Europe.
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