Amazon Fined Over $1.27 Billion by Italian Antitrust Regulators

By TechNadu Staff / December 9, 2021

The Italian antitrust regulators fined amazon over 1.12 billion EUR (1.27 billion USD) on Thursday for allegedly abusing its market dominance in the country to impose its fulfilment services. The fine is the biggest yet against a US tech giant in Europe. Amazon strongly disagrees, calling it "unjustified," and plans to appeal to the decision.

The Italian Antitrust Authority imposed a fine of 1,128,596,156 EUR on the following Amazon companies for violation of article 102 of the Treaty on the Functioning of the European Union: Amazon Europe Core, Amazon Services Europe, Amazon EU, Amazon Italia Services, and Amazon Italia Logistica. The Authority officials said they also imposed corrective steps that a monitoring trustee must review.

The authority said Amazon used its dominant position in the country's marketplace to persuade Amazon sellers into using its logistic service - Fulfilment by Amazon (FBA). The FBA program entitles Amazon to a set of exclusive benefits, including the Prime label, that can boost visibility and sales on Amazon, but "has prevented third-party sellers from associating the Prime label with offers not managed with FBA."

The investigation has ascertained that these are functions of the platform that are crucial for the success of sellers and for increasing their sales. Finally, third party sellers using FBA do not have the stringent performance measurement system to which Amazon subjects non-FBA sellers and failure to pass which can also lead to the suspension of the seller's account. 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.

An Amazon spokesperson said to Endgadget, "small and medium-sized businesses have multiple options for selling their products both online and offline: Amazon is just one of those options." The US giant also said that sellers choose FBA because it is convenient, efficient, and competitively priced. Amazon stated that FBA is an optional service and that most third-party sellers do not use it, and that fines and remedies proposed are unfair and disproportionate.

Regulators have been looking more closely at tech giants following a series of scandals over privacy and misinformation. Besides Amazon, Alphabet's Google, Facebook, Apple, and Microsoft have also drawn increased scrutiny in Europe.

In August 2021, The Supreme Court of India has approved an antitrust investigation against Amazon and Flipkart and simultaneously rejected the petitions that were previously submitted by the two e-commerce giants. In October 2021, a report surfaced alledging that Amazon resorted to search results rigging to dominate the platform with own copied products.

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