The Italian competition authority AGCM (Autorità Garante della Concorrenza e del Mercato) ruled on December 9 that Amazon abused its e-commerce dominance by providing unfair sales and logistics preferential conditions to merchants using its own FBA e-commerce logistics service, harming The interests of other competing logistics companies in Italy violated EU regulations. In addition to fines, the authorities also implemented specific “behavioral measures” against the company’s commercial activities. Amazon said it would appeal this decision and the huge fine of 1.13 billion euros that followed.

AGCM stated that Amazon has provided exclusive sales and marketing offers to merchants who have registered for its FBA service in the Italian market. “Non-FBA sellers are subject to strict performance indicators, which may cause the accounts of non-compliant sellers to be suspended on Amazon.it. Third-party sellers using FBA are not monitored by the platform.”

In addition, AGCM also stated that the highly competitive online market has also been damaged by Amazon’s abuse of its dominant position. “Due to the cost of repetitive warehouses, sellers using FBA are not encouraged to offer their products on other online platforms.”

In terms of logistics, Amazon occupies a dominant position in the Italian logistics intermediary service market, which in itself is conducive to enabling sellers active on the Amazon.it platform to adopt their own Fulfillment by Amazon (FBA) logistics services. In addition to allowing corresponding merchants to participate in high-profile sales activities, such as Prime Day, Black Friday and Cyber ​​Monday, and increasing the possibility of being displayed first, Amazon’s Prime “free” delivery service for merchants also further provides consumers with purchase incentives. The survey shows that these are essential for merchants to gain popularity on the Amazon.it platform, promote sales, and make successful quotations on the platform.

“These unfair sales and logistics preferential conditions have harmed competing e-commerce logistics operators and prevented them from showing online sellers the logistics services that they can provide as a service provider with the same quality as Amazon’s FBA. The gap between market power and e-commerce package delivery has further widened.” AGCM further explained.

In view of the scale of Amazon, the duration of the relevant conditions and the scale of the merchants involved, AGCM described Amazon’s situation as “particularly serious.” In order to immediately restore the competitive conditions in the relevant market, AGCM imposed very severe fines and implemented “behavioral measures”: In terms of sales, Amazon must grant sales to all third-party sellers who can comply with “fair and non-discriminatory standards” to fulfill orders Preferential; in terms of logistics, Amazon should define and publish such standards, and within one year from the date of the decision, the seller shall not negotiate with carriers and/or competing logistics operators other than FBA on the logistics of the seller’s order.

The AGCM’s ruling was made in the EU-level antitrust investigations under the European Commission’s ongoing “Whether Amazon’s use of merchant data violates EU rules” and “Whether the company provides preferential treatment to sellers using its Amazon logistics and delivery services” Made before the decision. These two FBA-related investigations were launched in November 2020, paying particular attention to whether the standards set by Amazon will result in preferential treatment for Amazon’s retail business or sellers who use FBA and delivery services.

According to international media reports, Amazon expressed “strongly opposed” this decision and will appeal. It described the fines as “unreasonable and disproportionate” and claimed that Italian SMEs have many options to sell products online and offline. The company emphasized that FBA is a “completely optional service” and pointed out that third-party sellers can use its seller-delivered Prime (SFP) service, which allows them to get Prime benefits without using FBA.