Italy fines Amazon record $1.3 bln for abuse of market dominance

MILAN, Dec 9 (Reuters) – Italy’s antitrust watchdog said on Thursday it had fined Amazon 1.13 billion euros ($ 1.28 billion) for alleged abuse of market dominance, in one of the largest sanctions imposed on an American tech giant in Europe.

Amazon said it “strongly disagreed” with the Italian regulator’s decision and would appeal.

Global regulatory scrutiny from tech giants has increased after a series of scandals over privacy and misinformation, as well as complaints from some companies that they abuse their market power.

In addition to Amazon, Alphabet’s Google (GOOGL.O), Facebook Inc (FB.O), Apple Inc (AAPL.O) and Microsoft Corp (MSFT.O) have drawn increased scrutiny in Europe.

Italy’s watchdog said in a statement that Amazon had taken advantage of its dominant position in the Italian market for intermediation services in the markets to favor the adoption of its own logistics service, Fulfillment by Amazon (FBA), by the Active sellers on Amazon.it.

The authority said that Amazon tied the use of FBA access to a set of exclusive benefits, including the Prime tag, that help increase visibility and increase sales on Amazon.it.

“Amazon prevents third-party sellers from associating the Prime tag with unmanaged FBA deals,” he said.

The Prime label makes it easy to sell to the more than 7 million highest spending and loyal consumers who are members of the Amazon loyalty program.

The antitrust authority also said it would impose corrective measures that will be subject to review by a trustee.

Amazon said that Fulfillment by Amazon “is a completely optional service” and that most 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 US group said in a statement.

“The fine and the proposed remedies are unjustified and disproportionate,” he added.

The EU Commission said it had cooperated closely with the Italian competition authority in the case, within the framework of the European Competition Network, to ensure consistency with its own two ongoing investigations into Amazon’s business practices.

The first was opened in July 2019 to assess whether Amazon’s use of sensitive data from independent retailers selling in its market violates EU competition rules.

The second, in late 2020, focused on the possible preferential treatment of Amazon’s retail offers and those of marketplace sellers using Amazon’s logistics and delivery services.

“This investigation complements today’s decision by the Italian competition authority addressing Amazon’s conduct in Italian logistics markets,” the Commission said on Thursday.

($ 1 = 0.8832 euros)

Report by Elvira Pollina and Maria Pia Quaglia; edited by Alexander Smith and Jason Neely

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