Money & The Economy

Amazon Slapped With Massive $1.3 Billion Fine For Anti-Competitive Practices

An Italian regulator hit Amazon with a massive fine Thursday over alleged anti-competitive business practices.

The Italian Competition Authority issued the $1.3 billion penalty after the results of its investigation into Amazon concluded the online marketplace favored third-party vendors who use Amazon’s shipping and logistics services, the regulator announced in a press release Thursday. The Authority alleged that Amazon boosted the presence of vendors that used its services on its site as a way to increase use of its own logistic service, Fulfillment by Amazon (FBA).

“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’s Italian version),” the Authority wrote.

The Italian regulator also argued that the practice harmed competing online marketplaces because sellers are incentivized to use Amazon’s platform.

“As a result of the abuse, competing marketplaces have also been damaged: because of the cost of duplicating warehouses, sellers who adopt Amazon’s logistics are discouraged from offering their products on other online platforms, at least with a product range as wide as that on,” the Authority wrote.

Amazon denied the regulator’s allegations that practice was anti-competitive, Reuters reported.

“When sellers choose FBA, they do so because it is efficient, convenient and competitive in terms of price,” an Amazon spokesperson said, according to Reuters. “The proposed fine and remedies are unjustified and disproportionate.”

The ruling is the latest rebuke of U.S. tech giant by European regulators as the EU looks to crack down on monopolistic practices and data privacy.

EU regulators hit Amazon with an $887 million fine in July for violating its General Data Protection Regulation (GDPR) in relation to advertising practices. Google was fined $270 million in June for allegedly abusing its dominant market position in the digital ads market.

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