Amazon hit with $1.3b fine in Italy

Italy's antitrust authority has hit e-commerce platform Amazon with a fine of 1.13 billion euros ($1.3 billion) for abusing its position of market dominance and harming rival operators.

In its ruling, the Autorita' Garante della Concorrenza e del Mercato, or the Italian Competition Authority, said the corporation had "enabled it to favor its own logistics service... with sellers active on the Amazon.it platform to the detriment of competing operators in that market and to strengthen its own dominant position".

Third-party sellers who did not use Amazon's logistics service were being excluded from "a set of advantages essential for obtaining visibility and better sales prospects".

Second blow

It is the second heavy blow in quick succession for Amazon in Italy, after the same body had previously fined it 68.7 million euros for infringing European Union laws because of restrictions penalizing sellers of Apple and Beats products.

An Amazon spokesperson told broadcaster CNBC that the company planned to appeal against what it called "unjustified and disproportionate" sanctions, pointing out that more than half of its annual sales in Italy came from 18,000 small and medium-sized enterprises that were assisted by Amazon's 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," the spokesperson said.

"We constantly invest to support (their) growth ... and we provide multiple tools to our sellers, including those who manage shipments themselves."

The Italian competition authority's case was built in cooperation with the European Commission, which is involved in two ongoing investigations of its own into the e-commerce giant's business practices, within the framework of the European Competition Network.

The first, dating back to July 2019, is looking at whether the company breached EU competition rules with its use of sensitive data from independent retailers using its marketplace.

The second, which began at the end of last year, is studying whether sellers using Amazon's logistics and delivery services received preferential treatment.

Big Tech firms and the way they make their money have come under increasing scrutiny in Europe in recent years. Ruhell Amin from brokerage company William O'Neil and Co told CNBC that this was a "significant" penalty for Amazon, which could have longer lasting implications.

"It's part of a broader trend that we've seen in Europe around trying to regulate some of these Big Tech companies. This certainly seems like the tip of the iceberg," he said.

"This case is interesting because the European Commission opened its own probe into this practice, but carved Italy out of the scope of the investigation to allow Italy's antitrust watchdog to proceed on its own merit. Typically, the (Commission) is quite unified in its approach."