Italy Fines Amazon $1.3B Over Anticompetitive FBA Practices

According to a press release issued last Thursday from Italy’s competition authority , Amazon harmed competitors in the market for e-commerce logistics services by unfairly favoring its own logistics service, Fulfilment by Amazon (FBA). Now, the e-commerce titan will not only have to pay the fine but will also be required to reform its ways.

The Autorità Garante della Concorrenza e del Mercato (AGCM) found that Amazon has a dominant position in the “market for intermediation services.” It allegedly leverages FBA to earn greater profits, as Amazon takes a bigger cut of proceeds from products sold through FBA, to the detriment of the logistics services offered by competing operators, the authority said.

The AGCM took issue with several company practices, including “that Amazon tied to the use of FBA the access to a set of exclusive benefits essential for gaining visibility and increas[ing] sales on” For example, the AGCM cited the policy that the company’s “Prime” label can only be associated with third-party seller offers managed by FBA. Other “Prime” label benefits include promotion by Amazon for events like Black Friday, Cyber Monday, and Prime Day.

Now, Amazon must grant sales benefits and visibility on to all third-party sellers, regardless of whether they use FBA or not, the press release said. Too, a monitoring trustee is set oversee the company’s compliance with the anti-discrimination measures. 

According to a statement provided to TechCrunch, Amazon strongly disagrees with the decision and intends to appeal it. The article, written by Romain Dillet, also included a statement from the company, adding that “[m]ore 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.”