The Italian antitrust body has slapped a €1.128 billion fine on Amazon after finding that the US giant holds a position of absolute dominance in the Italian e-commerce market, which has allowed it to favour its own logistics service. The European Commission has already praised Italy’s move, while Amazon said it would appeal the decision. EURACTIV Italy reports.
The fine was slapped on a number of Amazon-controlled companies, including Amazon Europe Core, Amazon Services Europe, Amazon EU, Amazon Italia Services and Amazon Italia Logistica, for abusing their dominant position in the e-commerce logistics services industry.
Sellers are being discouraged from offering their products on other online platforms with the same range of products because sellers have access to a number of advantages to gain visibility and better sales prospects on Amazon’s Italian website – Amazon.it – when they rely on the company’s logistics service, the antitrust body also said.
The main advantage the companies get from using Amazon as a platform is the so-called Prime label that “allows to sell with more ease to the most loyal and high-spending consumers adhering to Amazon’s homonymous loyalty programme”.
This label also allows them to “participate in the special events managed by Amazon, like Black Friday, Cyber Monday or Prime Day, and increases the probability that the seller’s offer is selected as a Featured Offer and displayed in the so-called Buy Box.”
“Amazon has thus prevented third-party sellers from associating the Prime label with offers not managed with FBA,” the Italian government body also said, adding that this has prevented competing e-commerce logistics operators from presenting themselves as providers of quality services comparable to those offered by Amazon’s logistics.
“It is difficult to say whether the quantification of the penalty is adequate or not, but it seems clear that it is always easier for those who enjoy a competitive advantage in terms of data to move from a dominant position in one sector to another,” said Rocco Panetta, Internet and privacy expert and country leader for Italy in the International Association of Privacy Professionals.
“It is now clear to everyone that antitrust and data protection authorities are and will be increasingly at the forefront of market and consumer protection,” he said.
Unjustified and disproportionate
Amazon called the sanction “unjustified and disproportionate” and announced its intention to appeal.
“We deeply disagree with the decision of the Competition Authority and will appeal. The sanction and the obligations imposed are unjustified and disproportionate,” the company said in a note.
“More than half of all annual sales on Amazon in Italy are generated by small and medium-sized businesses and their success is at the heart of our economic model. Small and medium-sized businesses have multiple channels to sell their products, both online and offline: Amazon is just one of these options,” the statement added.
An appropriate fine
The European Commission welcomed the decision.
“We are faced with an example of successful coordination between the European Commission and the Italian Authority, which was ideally placed to conduct a separate investigation into Amazon’s conduct in Italy,” it said.
The EU executive also stressed that there has been “close cooperation within the European Competition Network (Ecn) to ensure consistency with ongoing investigations” at the EU level.
Italian consumer associations were also pleased with the antitrust body’s decision.
“Finally the Antitrust Authority has imposed a record fine that can effectively sanction large operators that adopt improper behaviour,” the Network of Associations for the Defence of the Environment and the Rights of Users and Consumers, known as Codacons, has said.
“Once again, the antitrust authority is forced to intervene against e-commerce giants, highlighting behaviours that, if the findings of the authority are confirmed, will damage not only commercial operators but also consumers,” it added.
According to the consumer protection network, Amazon’s abuse of its dominant position impacted “the services rendered to consumers but also competition between operators and thus on the final prices proposed to the public.”
For Massimiliano Dona, president of Italy’s National Consumers Union, it is important that “all active sellers on the Amazon.it platform are guaranteed the same conditions and visibility if they know how to respect the quality standards of service to be ensured to consumers”.
Companies must be able to “offer without obstacles all their products on other online platforms as well because only in this way can there be effective competition in e-commerce as well”, he added.
[Edited by Daniel Eck/Zoran Radosavljevic]