Italy fines Amazon millions of dollars for harming competitors in the online marketplace
Italy's Competition and Market Authority (AGCM) has in recent months stepped up its surveillance of tech giants. This comes at the same time as regulators around the world have increased their scrutiny of these companies, following revelations of privacy and disinformation scandals, and complaints about alleged abuses of their market power.
The Italian Antitrust Authority has issued a statement accusing Amazon.it's logistics service of carrying out a "particularly serious" strategy that harms its competitors and violates EU competition rules. Specifically, the article infringed is Article 102 of the Treaty on the Functioning of the European Union, which prohibits "the abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it, in so far as it may affect trade between Member States".
Similarly, less than a month ago, the AGCM itself sanctioned Apple and Amazon for adopting a "restrictive agreement" that prevented several legitimate distributors from selling Apple and Beats products on the Amazon.it platform. As denounced by the Antitrust Authority, the sellers were "chosen individually and in a discriminatory manner".
The fine imposed by the regulatory authority amounts to €1128 million, and so far is one of the highest penalties applied to the US technology company in Europe. In addition, to ensure the restoration of a market of free competition in accordance with the regulations, the AGCM has imposed on Amazon rules of behaviour that will be "subject to scrutiny by a fiduciary supervisor", such as the publication of the standards for access to the Prime service by external sellers.
In its statement, the Italian Competition and Market Authority stated that "Amazon holds an absolute dominant position in the Italian market for marketplace intermediation services, which has allowed it to favour its logistics service, called FBA (Fulfillment By Amazon), among sellers active on the Amazon.it platform to the detriment of competing operators in that market and to reinforce its dominant position".
Thus, external businesses that have linked up with Amazon and use the FBA logistics service have access to a "set of essential benefits to gain visibility and better sales prospects on Amazon.it", such as, for example, "the Prime label, which makes it easier to sell to the most loyal and highly dependent consumers". Prime "also allows you to participate in Amazon's special events, such as Black Friday, Cyber Monday, Prime Day".
However, the US technology company has prevented third-party companies not managed by this FBA service from joining the Prime label, thus limiting their access to a functionality that the Antitrust Authority has described as "crucial for sellers' success and for increasing their sales". Moreover, in parallel, "competing markets have been harmed by this abuse: due to the cost of duplicating warehouses, sellers adopting Amazon's logistics are discouraged from offering their products on other online platforms, at least with the same range of products".
For its part, Amazon has said in a statement that it "strongly disagrees" with the measures adopted by the Italian body, and has already warned that it will appeal the fine, calling it "unjustified and disproportionate". Moreover, in its defence, the technology company has argued that "more than half of all Amazon's annual sales in Italy come from small and medium-sized businesses, and their success is an essential part of our business model. Small and medium-sized businesses have multiple channels to sell their products both online and offline, and Amazon is just one of those options".