Italy’s Antitrust Authority fines Amazon a Record $1.28 billion

Italy’s antitrust authority has slammed a fine of 1.13 billion euros ($1.28 billion) on American tech giant Amazon for taking advantage of its market dominance.

Amazon has come out to contend the decision of Italian watchdog saying it strongly disagrees with the decision and will consequently appeal it.

In November, the Italian regulatory body hit both Apple and Amazon with a fine 200 million euros (US$225 million) for ill practices in the sales of Apple and Beats products.

Tech giants especially the American owned companies like Google, Apple and Facebook have been on the cross hairs of global regulatory bodies following scandals over privacy and misinformation, as well as complaints from some businesses that they abuse their market power.

According to Reuters, the Italian regulatory body in a statement had accused Amazon of leveraging its dominant position in the Italian market for intermediation services on marketplaces to favour the adoption of its own logistics service – Fulfilment by Amazon (FBA) – by sellers active on Amazon.it.

The authority said Amazon tied to the use of FBA access to a set of exclusive benefits, including the Prime label, that help increase visibility and boost sales on Amazon.it.

The authority said, “Amazon prevents third-party sellers from associating the Prime label with offers not managed with FBA.”

The Prime label makes it easier to sell to the more than 7 million most loyal and high-spending consumers members of Amazon’s loyalty program.

The Italian watchdog has now said it will prescribe corrective steps that will be assessed by a monitoring trustee.

Amazon said FBA “is a completely optional service” and that the majority of third-party sellers on Amazon do not use it.

“When sellers choose FBA, they do so because it is efficient, convenient and competitive in terms of price”, the U.S. group said in a statement.

“The proposed fine and remedies are unjustified and disproportionate”, it added.

The EU Commission said it had cooperated closely with the Italian competition authority on the case, within the framework of the European Competition Network, to ensure consistency with its two own ongoing investigations into Amazon’s business practices.

“This investigation complements today’s decision of the Italian competition authority which addresses Amazon’s conduct in the Italian logistics markets,” the Commission said on Thursday.