June 27, 2022

U.S tech giant, Amazon Inc. has been fined 1.13 billion euros ($1.28 billion) by Italy’s antitrust watchdog over allegations of market dominance abuse, making it one of the biggest penalties imposed on a U.S. tech giant in Europe.

While the regulator also plans to impose corrective steps to Amazon. These steps will be subject to review by a monitoring trustee.

After a string of scandals over privacy and misinformation, as well as complaints from some businesses that tech giants abuse their market power, global regulatory scrutiny on them has been increasing.

Companies such as Apple Inc., Alphabet’s Google, Meta Platforms Inc., and Microsoft Corp have been continually drawing heightened scrutiny in Europe.

According to Italy’s watchdog, the U.S e-commerce giant had used its dominant position in the Italian market for intermediation services on marketplaces to favour the adoption of its own logistics service Fulfilment by Amazon (FBA), by sellers active on the country’s unit website, Amazon.it.

The authority further mentioned that the company in order to set exclusive benefits had tied to the use of FBA access, such as the Prime label that helps increase visibility and boost sales on Amazon.it.

According to Amazon, in its defense, it mentioned that FBA is a completely optional service and the majority of third-party sellers on the website do not use it. And when sellers do choose its logistics service, it mentioned it to be only because of efficiency, convenience, and competitiveness in terms of price.

The EU Commission under the statutory framework of the European Competition Network to ensure consistency with its own two ongoing investigations into Amazon’s business practices mentioned that it had cooperated closely with the Italian competition regulatory on the latest case.

The Commission had opened its first investigation on Amazon in July 2019. It had assessed if the company’s use of sensitive data from independent retailers selling on its marketplace were in breach of EU competition rules.

While the second investigation was conducted in late 2020. The investigation focussed on the possible preferential treatment of the company’s own retail offers and those of marketplace sellers that use its logistics and delivery services.