Italy hands Amazon €1 billion fine for anti-competitive practices

Amazon gave favourable treatment to sellers using its own logistics services, but also blocked those sellers from using competing firms

The Italian Competition Authority, Autorità Garante della Concorrenza e del Mercato (ACGM), has fined Amazon €1.13 billion for abusing its position in the country's brokerage services market, where it holds 'absolute dominance'.

The ACGM is specifically fining five Amazon subsidiaries (Amazon Europe Core S.à.rl, Amazon Services Europe S.à rl, Amazon EU S.à rl, Amazon Italia Services Srl and Amazon Italia Logistica Srl, referred to as 'Amazon' for the remainder of the article) for violating Article 102 of the Treaty of the Functioning of the European Union. The Article prohibits any abuse of a dominant position in the EU's internal market.

Amazon's rule over Italian brokerage services 'has allowed it to promote its own logistics service, called Fulfillment by Amazon ('FBA'), among the sellers active on the platform Amazon.it', the ACGM said. It also required use of FBA if sellers wanted to access certain benefits, like the Prime label. Without access to Prime sellers could not take part in special selling events like Black Friday and Cyber Monday, and were much less likely to be chosen as a Featured Offer.

'Amazon thus prevented third party sellers from associating the Prime label with offers not managed with FBA,' the regulator wrote. It added, '[T]he stringent performance measurement system to which Amazon subjects non-FBA sellers is not applied to third party sellers who use FBA, and failure to pass this can also lead to the suspension of the seller's account' - meaning that FBA sellers were less likely to be suspended from Amazon than non-FBA sellers, even if they failed to meet certain goals.

Finally, the report notes that FBA sellers are discouraged from using competing online platforms, directly affecting fair competition in the marketplace.

In addition to the fine, the ACGM has imposed behavioural monitoring measures on Amazon 'to immediately restore competitive conditions in the relevant markets'. Going forward, the company will have to grant all sales and visibility privileges to all third-party sellers, regardless of whether they are using FBA or not. It will also need to refrain from negotiating rates and other contractual conditions with carriers and/or competing logistics firms on behalf of sellers - although it has a year to phase this latter rule in.

Amazon, naturally, is disputing the findings. In a statement to Engadget, the company said it plans to appeal the ACGM's conclusions and goes on to say:

'The proposed fine and remedies are unjustified and disproportionate. More than half of all annual sales on Amazon in Italy come from SMBs, and their success is at the heart of our business model. Small and medium-sized businesses have multiple channels to sell their products both online and offline: Amazon is just one of those options. We constantly invest to support the growth of the 18,000 Italian SMBs that sell on Amazon, and we provide multiple tools to our sellers, including those who manage shipments themselves.'

The EU is currently cracking down on big tech firms like Amazon, outlining new rules to regulate these firms last year.