Italy fines Amazon €1.1 billion in antitrust case

The Italian Competition Authority (AGCM) on Thursday said it fined online retail giant Amazon €1.1 billion ($1.3 billion) for alleged abuse of its market dominance.

The move comes after the same authority slapped Amazon with a €68.7 million fine two weeks ago for infringing European Union laws.

Why was Amazon fined?

AGCM said in a statement that the e-commerce giant has required that third-party sellers use its own logistics service, called Fulfilment by Amazon (FBA), harming other service providers. 

Amazon tied FBA access to a set of exclusive benefits, including the Prime label, that help boost sales and visibility on Amazon.it, according to AGCM. 

The company also applied stricter quality controls on sellers who did not use the FBA service, which in some cases led to accounts being blocked, the watchdog added. 

Third-party sellers had fewer chances of visibility and sales as they did not have access to Amazon's Prime loyalty program, which makes it easier to sell to millions of Amazon's loyal consumers, AGCM said. They were also excluded from special events, including Black Friday, Cyber Monday and Prime Day offers.

"The investigation showed that such benefits are crucial to gain visibility, to boost sales and, in turn, to the success of the sellers' offers on Amazon.it,'' the authority said.

In addition to the fine, corrective measures were also imposed on Amazon and will be subject to review by a monitoring trustee, AGCM said. 

What did Amazon say?

In a statement, the e-commerce giant said it "strongly disagreed" with the Italian regulator's move and would appeal the decision.

Amazon said FBA "is a completely optional service" and that the majority of third-party sellers on Amazon do not use it.

"When sellers choose FBA, they do so because it is efficient, convenient and competitive in terms of price," the company added. "The proposed fine and remedies are unjustified and disproportionate."

Big Tech under European pressure?

Thursday's fine is one of the largest leveraged in Europe against Amazon.

An earlier fine against Amazon, also imposed by Italy's AGCM, was for infringing EU laws through restrictions that penalized Apple and Beats product sellers. Italy's antitrust watchdog also ordered Apple to pay €134.5 million.

The European Union has ramped up efforts to rein in Big Tech companies in recent years. The measures range from fines, including multibillion-euro penalties in three antitrust cases against Google, to legislation to regulate competition, privacy and harmful content. 

fb/sms (AFP, Reuters, dpa)