Italian watchdog fines Amazon $1.3 bn for abusing its market position

Italian watchdog fines Amazon $1.3 bn for abusing its market position
Source: IANS

Rome, Dec 9 (IANS) The Italian Competition Authority on Thursday fined e-commerce giant Amazon $1.3 billion (1.1 billion euros) for using its dominance in the online shopping world and harming competing operators in the logistics space via its 'Fulfilment by Amazon' (FBA) service.

The antitrust watchdog called AGCM was particularly concerned with the benefits Amazon gives to sellers on its platform that also pay to use its FBA logistics service.

"The investigation found that these are functions of the platform that are crucial for the success of sellers and for increasing their sales. Finally, the 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," the AGCM said in a statement.

In doing so, said the authority, Amazon has harmed competing e-commerce logistics operators by preventing them from proposing themselves to online sellers as providers of services of a quality comparable to that of Amazon's fulfillment.

"These conducts have, thus, increased the gap between the power of Amazon and that of the competition in the e-commerce order delivery business," the statement read.

In a statement to Engadget, Amazon said: "We strongly disagree with the decision of the Italian Competition Authority (ICA) and we will appeal. The proposed fine and remedies are unjustified and disproportionate."

The Italian watchdog said that Amazon must grant sales and visibility privileges on its platform to all the third-party sellers. The ACGM has given Amazon a year to comply with its rulings.

The fine is one of the largest levied by a EU country over online anti-trust issues.

Last month, the AGCM fined tech giants Apple and Google around $11.3 million each over violations of the Consumer Code - one for lack of information and another for aggressive practices regarding the acquisition and use of consumer data for commercial purposes.

This was the second time Apple was fined by the Italian regulator last month, after it and Amazon were hit with fines totalling over around $225 million for restricting who's allowed to sell Apple and Beats products on Amazon's Italian store.

Earlier this month, a significant report from a US-based nonprofit organisation claimed that Amazon is exploiting its position as a gatekeeper to impose steep and growing fees on third-party sellers, raking in big moolah.

In 2019, Amazon pocketed $60 billion in seller fees and this year, its take will soar to $121 billion, according to the report titled 'Amazon's Toll Road' by the Institute for Local Self-Reliance.