Amazon penalized $ 1.3 billion by Italian antitrust regulators

• The regulators’ said Amazon has affected other players in the e-commerce logistics industry

• Amazon was penalized for exploiting its dominating position in the market 

The Italian antitrust regulator said on Thursday that it has fined Amazon 1.13 billion euros ($1.28 billion) for supposed market dominance abuse. 

According to the Autorità Garante Della Concorrenza e del Mercato, or AGCM, Amazon has affected other players in the e-commerce logistics industry.

The e-commerce giant stated that it "strongly disagreed" with the Italian regulator's decision and that it would file an appeal, Reuters stated. 

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Following a series of scandals involving privacy and disinformation, as well as concerns from certain firms that they misuse their market position, global regulatory monitoring of tech behemoths have increased.

Fulfillment by Amazon

According to a statement issued by Italy's watchdog, Amazon used its dominating position in the Italian market for intermediation services on marketplaces to encourage merchants on Amazon.it to use its own logistics service, Fulfilment by Amazon (FBA).

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The Authority believed that Amazon-related the use of FBA to access a set of unique privileges necessary for increasing exposure and sales on Amazon.it. 

“The most relevant is the Prime label, which makes it easier to sell to the above 7 million most loyal and high-spending consumers members of Amazon’s loyalty program,” it said. 

The regulator said that Amazon prohibits third-party sellers from using the Prime branding on deals that are not handled by FBA.

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Furthermore, the Prime label enables sellers to participate in Amazon's well-known special events, such as Black Friday, Cyber Monday, and Prime Day. 

The antitrust regulators' investigation showed such perks are “critical for visibility, to boost sales and, in turn, to the success of sellers’ offers on Amazon.it.”

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The recent fine comes as Amazon awaits the conclusion of a probe being conducted by the European Union which accused the e-commerce giant of allegedly utilizing sensitive data from third-party vendors to compete against them.

$1 = 0.883 euros

Picture Credits: CNBC