The Italian regulator AGCM Competition and Market Authority have issued a fine of nearly USD 1.3 Billion to Amazon, claiming the company had abused its market dominance.
The Italian regulators said that the company abused its market dominance by launching its own logistics service – Fulfillment By Amazon (FBA).
The regulators claim that Amazon allegedly broke antitrust laws by giving special perks to third-party merchants that used the FBA. Among these perks include access to Amazon Prime customers and promotions such as Black Friday and Cyber Monday, to name a few.
“The investigation found that these are functions of the Amazon. Its platform is crucial for the success of sellers and for increasing their sales,” AGCM said in a statement.
“Finally, third-party sellers who use FBA are not subject to the stringent performance measurement system that Amazon subjects to non-FBA sellers and whose failure to exceed can also lead to the suspension of the seller’s account,” it added
In defense, Amazon explained that the FBA is only optional and that majority of the third-party sellers do not use their logistics system. Additionally, the company said in a statement that it will appeal the ruling of the Italian regulator.
“We strongly disagree with the decision of the Italian Competition Authority. The proposed fine and remedies are unjustified and disproportionate,” the company said.
It added that it has invested heavily in Italy that has come to welcome e-commerce due to the pandemic.
“Small and medium-sized businesses have multiple channels to sell their products both online and offline: Amazon is just one of those options. We constantly invest to support the growth of the 18,000 Italian SMBs [small and medium-sized businesses] that sell on Amazon, and we provide multiple tools to our sellers, including those who manage shipments themselves.”
As an addition to the fine given by the Italian regulators, the company must give outside vendors who don’t use the FBA service access to the same benefits and events, if they use a logistics operator that meets certain standards.
Amazon has been given a year to come up with said standards that outside logistics companies must meet in order to qualify.