Amazon fined $1.28 billion by Italian Antitrust Regulators for abusing market dominance

Amazon hurt competitors by encouraging merchants to use Amazon's own logistics service, according to Italy's antitrust regulator.

Amazon fined $1.28 billion Italian antitrust regulators for abusing market dominance

Italian antitrust regulators fined Amazon 1.13 billion euros ($1.28 billion) on Thursday for abusing its market dominance. 

Amazon has been fined a total of 1.13 billion euros ($1.28 billion) by Italy's antitrust watchdog for alleged market dominance abuse. Amazon was stunned on Thursday when Italy's antitrust watchdog slapped the e-commerce giant with a 1.13 billion euro ($1.28 billion) fine. 

The Autorità Garante della Concorrenza e del Mercato, or AGCM, claimed that Amazon had harmed competing operators in the e-commerce logistics service. It came to the conclusion that Amazon used its dominant position to encourage sellers to sell on Amazon. Fulfillment by Amazon, Amazon's own logistics service, will be used. This was done "to the detriment of competing operators' logistics services, as well as to strengthen its own dominant position."

AGCM stated that it will implement corrective measures that will be reviewed by a monitoring trustee.

Amazon has stated that it "strongly disagrees" with the fine and intends to appeal it. According to an Amazon spokesperson, "the proposed fine and remedies are unjustified and disproportionate."

Amazon claims that small and medium-sized businesses account for more than half of all annual sales on its platform in Italy and that their success is critical to 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," said an Amazon representative.

We invest regularly to support the growth of the 18,000 Italian SMBs that sell on Amazon, and we offer a variety of tools to our sellers, including those who manage their own shipments."

On Thursday, Ruhell Amin, global head of retail equity research at William O'Neil + Co, told CNBC's "Street Signs Europe" that the fine is "significant."

"It's part of a broader trend in Europe around trying to regulate some of these Big Tech companies," he explained.

Investors are concerned that the Italian fine could signal a broader trend toward more stringent regulation of Amazon in other areas of its business and around the world, according to Amin. "This appears to be the tip of the iceberg," he said.

"That whole case is interesting because the European Commission launched its own inquiry into this conduct, but it excluded Italy from the scope of the investigation to allow Italy's antitrust regulator to proceed on its own merits," Amin added. "The European Commission's approach is often pretty unified."

Regulators in China are going after e-commerce behemoth Alibaba, while regulators in Latin America are going after Mercado Libre.

Source: CNBC