Amazon fined $1.3 billion by Italian antitrust authorities

Amazon was fined nearly $1.3 billion on Thursday by Italian regulators who accused the company of breaching antitrust laws by granting special concessions to third-party merchants who use Amazon’s warehouse and delivery system.

The Italian competition authority’s decision is one of the first examples of a regulator investigating how Amazon is using its extensive logistics network and an online marketplace to gain an advantage over competitors.

The regulator said Amazon has given merchants who pay to use the system, called Fulfillment by Amazon, temptations such as access to Amazon Prime customers, meaning their products can often be shipped within 24 hours without a delivery fee. Sellers can also participate in promotions like Black Friday, Cyber ​​Monday, and Prime Day that aren’t available to those who don’t use Amazon’s fulfillment system.

“The investigation has found that these are functionality essential to the success and increased sales of sellers,” the competition authority said in a statement.

Most of the products available on Amazon are offered by third-party sellers who use Amazon as a marketplace to reach customers. Amazon takes a percentage of each sale. For an additional cost, the company offers Fulfillment by Amazon, which allows sellers to store their products in Amazon’s warehouses and delivery system, as well as inventory management, returns, and customer service software.

Amazon said it would appeal the ruling. The company said that Fulfillment by Amazon is an optional offering, and the majority of third-party merchants that sell products on Amazon do not use the company’s logistics system. The company said there are other ways for third-party sellers to reach Prime customers other than Fulfillment by Amazon.

“We strongly oppose the decision of the Italian competition authority,” the company said. “The proposed fine and damages are unjustified and disproportionate.”

Amazon has invested heavily in Italy, a market that was once resilient to e-commerce that it has embraced during the pandemic. In Italy, Amazon has built fulfillment warehouses and other parts of its logistics system to help attract customers with express delivery.

In addition to the fine, the Italian regulator said Amazon must give third-party sellers who do not use Fulfillment by Amazon access to the same sales and visibility opportunities, if they use a logistics operator that meets certain criteria. Amazon has a year to come up with the criteria that third-party logistics companies must meet to qualify.

Amazon has become a frequent target of antitrust authorities. The European Commission, the executive arm of the European Union, is investigating Amazon for unfair use of data collected from third-party merchants to enhance its product offerings.

Last month, Italian regulators fined Amazon and Apple more than $225 million for anti-competitive cooperation related to the sale of Apple and Beats products on Amazon. The companies said they would resume.

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