Italy competition regulator fines Amazon over €1B for favoring some merchants News
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Italy competition regulator fines Amazon over €1B for favoring some merchants

The Autorità Garante della Concorrenza e del Mercato (AGCM), Italy’s competition authority, announced Thursday that it fined Amazon € 1,128 billion ($1.28 billion) for abusing its dominating market position and harming competitors in the e-commerce logistics industry. The AGCM said that Amazon provides merchants who use its logistics service, Fulfillment by Amazon (FBA), with advantages in terms of visibility and sales, including access to Amazon’s “Prime” label. As part of a years-long dispute over internet antitrust issues, the fine is one of the highest ever imposed by a single country in the EU.

Amazon, according to the commission, took advantage of its market dominance in Italy to create and advertise its own logistical services. This purportedly damaged competitors in the e-commerce logistics services market.

The AGCM explains its position through its statement and a 250-page report. According to them, third-party sellers who use FBA versus their own logistics stack do not receive the same treatment. Sellers that use FBA are eligible to join Amazon Prime, the company’s paid loyalty program. Some products are delivered free to subscribers. Aside from Amazon’s own inventory, products from third-party sellers that arrive at Amazon’s warehouses via FBA also get the Prime label. Prime products are subsequently included in Amazon’s events, such as Prime Day, Black Friday and Cyber Monday. Furthermore, the AGCM alleges that merchants who use FBA have a higher probability of their products being listed in Amazon’s “buy box,” or listed as the first retailer of the product, than other third-party sellers.

The Italian government has ordered Amazon to develop a new set of regulations that are fair to all third-party sellers, whether or not they use FBA. Behavioral changes will also be required by the company. The changes will be reviewed by a monitoring trustee.

An Amazon spokesperson told Engadget that the company “strongly disagreed” with the judgment and that it would appeal. It also mentioned that non-FBA merchants can use its Seller Fulfilled Prime (SFP) service, which provides Prime benefits without requiring them to use Amazon’s logistics.

Last month, Amazon and Apple were fined $225 million (€200 million) in Italy for unfairly restricting Beats sales by limiting them to a small number of merchants. Amazon was also fined a record €746 million by the EU for violating the bloc’s strict General Data Protection Regulation (GDPR) laws. In the EU, other tech behemoths are also being scrutinized. Notably, the EU has launched an antitrust probe into Apple’s App Store rules, focusing on in-app purchase commissions.

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