The Italian antitrust body, Autorità Garante della Concorrenza e del Mercato (AGCM) fined Amazon $1.3 billion, one of the largest fines in a European country, for abusing its competitors in violation of existing legislation.
“The abusive strategy adopted by Amazon is particularly serious, since it is likely to discourage, if not eliminate, competition in the relevant markets,” ruled the Italian Competition Authority’s decision, according to France 24 on Dec. 9.
The AGCM traced its investigations into Amazon’s abuses against other third-party sellers back to 2016, and calculated the figure charged based on worldwide sales seeking to make it truly dissuasive, according to its explanation.
“In view of the need to ensure the effective deterrence of the sanction, taking into account the fact that the Amazon Group had a global turnover in 2020 of more than 330 billion euros and Amazon’s absolute importance at a global level, it is considered appropriate to apply a increase of 50 percent of the amount of the fine,” AGCM reported.
Additionally, Amazon has one year to rectify its strategies and after close monitoring will have to grant selling privileges and visibility to all third-party sellers. Within that time, it will have to draft and publish such fair and non-discriminatory rules.
Among Amazon’s actions that were deemed abusive is that third-party sellers who do not use Amazon’s fulfillment service are excluded from better access to Amazon’s “most loyal and top-tier customers” who use Amazon Prime, the e-commerce giant’s loyalty program.
In addition, a harsh performance measurement system is imposed on them, which can go to the extreme of suspending their accounts as sellers.
For her part, Margaret Vestayar, EU commissioner for competition referred to the condemnation against Amazon saying, “It’s about making sure that the market is open and contestable, and I think a case like this one contributes exactly to this purpose.”
Amazon protested, stating, “We strongly disagree with the decision of the Italian Competition Authority (ICA) and we will appeal. The proposed fine and remedies are unjustified and disproportionate.”
On the other hand, Amazon is not only acting against third-party sellers in Italy, according to the U.S.-based non-profit organization Institute for Local Self-Reliance (ILSR).
ILSR argues that that large company squeezes large amounts of money from third-party sellers by imposing high and increasing fees.
It thus earned $60 billion in 2019 in fees charged to them, and this year its revenue will soar to $121 billion,
Such abusive behavior is not unique to the multinational Amazon, since technology giants such as Facebook, Google, Apple and Microsoft also apply it.
That is why a European Parliament committee approved its version of the Digital Markets Act, which would allow them to be sanctioned, since they are accused of similar infractions.
These include: “stifling competition, not paying enough taxes, stealing media content and threatening democracy by spreading fake news,” reports France 24.