Italy hits Amazon with 1.1bn euro fine over abuse of market dominance

Italian regulators hit Amazon with a 1.1-billion-euro ($1.3-billion) antitrust fine Thursday for allegedly abusing its dominance in the market, the latest action against US Big Tech in the EU.

US technology giants have been in the firing line in the European Union over their business practices.

In the latest salvo, Italy’s competition watchdog said Amazon abused its dominant position by promoting its own logistics service, which can ship and deliver packages, on its Italian platform to the detriment of third-party sellers who did not use it.

“The abusive strategy adopted by Amazon is particularly serious, since it is likely to discourage, if not eliminate competition in the relevant markets,” read the 250-page decision by the Italian Compettion Authority.

Amazon said it “strongly” disagreed with the decision and would appeal.

“The proposed fine and remedies are unjustified and disproportionate,” the company said in a statement.

The move comes two weeks after the same authority imposed a 68.7-million-euro fine on Amazon for infringing EU laws through restrictions that penalised sellers of Apple and Beats products.

In the same action, Apple was ordered to pay 134.5 million euros.

As Europe powers ahead with antitrust litigation, US regulators are closely watching its approach to big tech firms, after Washington pledged to intensify scrutiny of the technology industry.

‘Increasing Amazon’s power’
The Italian watchdog said Thursday that third-party sellers who do not use Amazon’s logistics service are excluded from “a set of advantages essential for obtaining visibility and better sales prospects”.

Those included better access to Amazon’s “most loyal and high-end customers” who use Amazon Prime, the e-commerce giant’s loyalty program.

Moreover, a tough performance measurement system is reserved for sellers who do not use Amazon’s logistics system, which can lead, if failed, to suspension of the seller’s account.

“In doing so, Amazon has harmed competing e-commerce logistics providers by preventing them from presenting themselves to online sellers as service providers of comparable quality to Amazon’s logistics,” said the watchdog, adding that such conduct had “increased the gap between Amazon’s power and that of its competitors”.

In its decision, the authority said it had imposed measures on Amazon subject to review by a monitor.

The company must grant sales privileges and visibility to all third-party sellers who meet fair and non-discriminatory standards for fulfilment, and must decide and publish such standards, it said.

EU action

Last month, EU legislation to impose unprecedented restrictions on how US tech giants do business passed a first, significant hurdle, with a European Parliament committee approving their version of the Digital Markets Act.

That would slap far-reaching rules on companies like Amazon, Facebook, Google, Apple and Microsoft.

Such tech companies have been variously accused of stifling competition, not paying enough taxes, stealing media content and threatening democracy by spreading fake news. (AFP)