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Amazon hit with $1.2 Billion Fine

Italy's antitrust watchdog said on Thursday it had fined Amazon 1.13 billion euros ($1.28 billion) for alleged abuse of market dominance, in one of the biggest penalties imposed on a U.S. tech giant in Europe.

It said the tech giant had abused its market dominance by promoting its own logistics service, Fulfilment by Amazon (FBA).

It claimed companies had to use the FBA service to access key benefits such as selling products with Prime delivery with no extra cost to customers, and participation in Black Friday sales.

Amazon said it "strongly disagreed" with the Italian regulator's decision and would appeal.

“More than half of all annual sales on Amazon in Italy come from SMBs, and their success is at the heart of our business model. 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 that sell on Amazon, and we provide multiple tools to our sellers, including those who manage shipments themselves,” it added.

Global regulatory scrutiny of tech giants has been increasing after a string of scandals over privacy and misinformation, as well as complaints from some businesses that they abuse their market power.

This leads to far-reaching consequences as Prime products are then included in Amazon’s events, such as Prime Day, Black Friday and Cyber Monday. In other words, you have a better chance of getting featured in Amazon’s events if you use Fulfillment by Amazon.

The regulator insisted that access to such functions is "crucial" for sellers to achieve success on Amazon's Marketplace.

Both Apple and Amazon said they plan to appeal against the fines.


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