Amazon has been slapped with a hefty 1.13 billion euros ($1.3 billion) fine by Italy’s antitrust authority. The company was accused of exploiting its dominant position against independent sellers on its website in violation of European Union competition rules.
The Autorità Garante della Concorrenza e del Mercato (AGCM), released a statement along with a 250-page report, which said that Amazon has required that third-party sellers use its own logistics service, called Fulfilment by Amazon (FBA), harming competitors and strengthening its own position.
The ecommerce giant also prevents third-party sellers from gaining access to Amazon’s Prime loyalty program, “which makes it easier to sell to the more than 7 million most-loyal and highest-spending consumers”. So, a product has a better chance of getting featured in Amazon’s events like Prime Day, or Black Friday, if it uses FBA.
On its product page, Amazon automatically selects a seller for the buy box. According to the AGCM, sellers who use FBA have a higher chance of getting featured in the ‘Buy Now’ box compared to other third-party sellers.
Third-party sellers using FBA are not subject to the stringent performance indicators that Amazon applies to monitor the non-FBA sellers’ performance, which can ultimately lead to the suspension of non-compliant sellers’ account on Amazon.it.
In so doing, Amazon harmed competing e-commerce logistics operators, preventing them from presenting themselves to online sellers as providers of services of comparable quality to Amazon’s FBA and thus capable of ensuring high visibility on Amazon.it. Such a conduct widened the gap between Amazon’s market power and its competitors’ also in the delivery of e-commerce parcels.
The fine is one of the largest levied in Europe against Amazon.
“The investigation showed that such benefits are crucial to gain visibility, to boost sales and, in turn, to the success of sellers’ offers on Amazon.it,” said AGCM.
“The Authority regarded Amazon’s abusive strategy as particularly serious and, considering its seriousness, its duration, the effects already produced and the size of the Group, decided to impose a fine.
“In addition, in order to immediately restore competitive conditions in the relevant markets, the Authority imposed behavioural measures on Amazon that will be subject to review by a monitoring trustee.
“In particular, Amazon will have to grant sales benefits and visibility on Amazon.it to all third-party sellers which are able to comply with fair and non-discriminatory standards for the fulfilment of their orders, in line with the level of service that Amazon intends to guarantee to Prime consumers.”
Amazon said it “strongly disagreed” with Italian regulator’s decision and would appeal, calling the fines and proposed remedies “unjustified and disproportionate”. It noted that more than half of annual sales in Italy are from small and medium businesses that have access to other channels to sell their goods.
