Italy’s antitrust regulator has fined online retail giant Amazon $1.3 billion after being accused of giving preference on its platform to third-party sellers that pay to use its warehouse and delivery services.
The regulator announced that Amazon was giving undue prominence to sellers who used its logistics service by ensuring they were more likely to be presented as the default option. According to the Wall Street Journal, the $1.3 billion fine came in the wake of a two-year investigation. A spokesperson revealed the fine may be the largest the regulator has ever issued. Alongside the fine, Amazon was also ordered to ensure that in the future, “fair and nondiscriminatory standards” are applied to third-party level listing, and the regulator would be appointing a trustee to monitor this.
Amazon explained that their third-part sellers make up a significant part of their revenue, and they have invested heavily in their success. They stressed, only a small percentage of those sellers use their logistic services, and they do so for their efficiency and cost-effectiveness. The regulator argued that outside companies who fail to meet Amazon’s criteria struggle for prominent placement on their site in practice. In effect, this coerces many sellers into using the company’s logistic services.
Amazon has hit out the fine and proposed remedies by calling them “unjustified and disproportionate”. The EU’s top competition enforcer is also conducting a similar investigation into Amazon and has filed antitrust charges against the retail platform for allegedly manipulating nonpublic data from third-party sellers and exploiting it to their advantage. In 2020, the Wall Street Journal launched an investigation that Amazon employees were using other sellers’ data to develop competing products even though this is in strict violation of Amazon’s policies. Amazon has denied all wrongdoing.
The fine signifies the first wave of antitrust enforcement in Europe and elsewhere. The decision highlights how big names in the tech world are coming under closer scrutiny globally by antitrust regulators. For years, tech giants such as Amazon have been accused of leveraging their size, scale, and dominance to crush smaller rivals. By issuing Amazon with such a huge and unprecedented fine, Italy’s antitrust regulator believes the leveling of the playing field has begun.