ROME, Italy: On Thursday, Italian antitrust regulator Autorit Garante della Concorrenza e del Mercato (AGCM) fined Amazon $1.28 billion for what it called abusing its market dominance.
According to AGCM, Amazon stifled competition in the e-commerce logistics service sector, and leveraged its dominant position to encourage sellers on Amazon.it to use its own logistics service, “Fulfilment by Amazon” (FBA).
This was done “to the detriment of the logistics services offered by competing operators, as well as to strengthen its own dominant position,” it added.
AGCM said it will impose appropriate measures, subject to review by a monitoring trustee.
Amazon “strongly disagrees” with the fine and plans to appeal, officials stated, and a company spokesperson told CNBC “the proposed fine and remedies are unjustified and disproportionate.”
Amazon noted that more than 50 percent of its annual sales in Italy come from small and medium-sized businesses, adding that their success is key to the company’s 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,” the Amazon spokesperson said.
“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 spokesperson added.
On Thursday, Ruhell Amin, global head of retail equity research at William O’Neil and Co, told CNBC that the Italian move is a “significant” fine for the e-commerce giant.
The Italian fine could concern investors, as it signifies a broader trend toward regulating Amazon more heavily in other parts of its business and in other parts of the world, Amin added, stating, “This certainly seems like the tip of the iceberg.”
“This case is interesting because the European Commission opened its own probe into this practice, but carved Italy out of the scope of the investigation to allow Italy’s antitrust watchdog to proceed on its own merit. Typically, the European Commission is quite unified in its approach,” he said.