Amazon slapped with $1.3 billion fine in Italy over antitrust case

Amazon has been fined with a record-breaking amount of €1.3 billion or about $1.28 billion by the Italian antitrust regulators. The tech and e-commerce giant was accused of abusing market dominance in the country.

The market watchdog released a statement on Thursday, Dec. 8, and said Amazon was fined because it hurt competitors in the e-commerce logistics service sector. According to Reuters, Italy's regulator will also request corrective plans from Amazon and this will be reviewed by the monitoring trustee.

The fine being imposed on Amazon is currently the largest to have ever been handed down in Europe against a retail company. It was also noted that Amazon's business in Italy has especially grown during the lockdowns related to COVID-19 restrictions.

Likewise, CNBC reported that the country's Autorità Garante della Concorrenza e del Mercato (AGCM), said Jeff Bezos' company abused its market dominance and harmed competing operators. The agency concluded that the American firm leveraged its dominant position to encourage retailers on Amazon.it to use Amazon's own logistics service.

"Amazon holds a dominant position in the Italian market for intermediation services on marketplaces, which Amazon leveraged to favor the adoption of its own logistics service - Fulfilment by Amazon (FBA) - by sellers active on Amazon.it, to the detriment of the logistics services offered by competing operators, as well as to strengthen its own dominant position," the Italian regulator stated.

Then again, it was reported that Amazon does not agree with AGCM's decision to fine the company, thus, it will file an appeal. The Seattle, Washington headquartered e-commerce firm further told CNBC through its spokesperson that, "The proposed fine and remedies are unjustified and disproportionate."

Amazon noted that more than 50% of its annual sales on the platform in Italy are derived from small and medium-sized businesses. It also pointed out that their success on the platform is the 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 firm's spokesman explained. "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."