Italian antitrust regulators on Thursday slapped e-commerce giant Amazon with a massive $1.28 billion fine for abusing its market dominance.
The Autorita Garante della Concorrenza e del Mercato, or AGCM, said in a statement that Amazon leveraged its dominant position to illegally harm competitors in the e-commerce logistics space.
The regulators said Amazon illegally tied the use of its own logistics service, called Fulfilment by Amazon, to “access to a set of exclusive benefits essential for gaining visibility and increase sales” on Amazon’s site in Italy.
Those benefits included access to the site’s Prime label, which makes it easier to sell to Amazon Prime subscribers and participate in Amazon’s special events like Black Friday, Cyber Monday and Prime Day, AGCM said.
“The investigation showed that such benefits are crucial to gain visibility, to boost sales and, in turn, to the success of sellers’ offers on Amazon.it,” the regulators said.
“In so doing, Amazon harmed competing e-commerce logistics operators, preventing them from presenting themselves to online sellers as providers of services of comparable quality to Amazon’s FBA and thus capable of ensuring high visibility on Amazon.it. Such a conduct widened the gap between Amazon’s market power and its competitors’ also in the delivery of e-commerce parcels.”
The regulators called Amazon’s conduct “particularly serious.”
In addition to the major fine, the regulators said they’ll impose corrective measures that will be subject to review by a monitoring trustee.
In a statement, Amazon said that it “strongly disagrees” with the fine and slammed it as “unjustified and disproportionate.”
Small and medium-sized businesses make up most of the platform’s sales in Italy, the company said.
“Small and medium-sized businesses have multiple channels to sell their products both online and offline: Amazon is just one of those options,” the Amazon spokesperson added.
“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.”
Amazon stock was slightly lower in premarket trading on Thursday, down to $3,513.50 per share.