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Italy hits Amazon with €1.1bn fine for ‘abusing’ market dominance

Italian regulators hit Amazon with a 1.1-billion-euro antitrust fine on Thursday for allegedly abusing its dominance in the market, in the latest action against US Big Tech in Europe.

Amazon's logo on the company's premises in Brandizzo, near Turin.
Amazon's logo on the company's premises in Brandizzo, near Turin. Photo: Marco Bertorello / AFP

US technology giants have been in the firing line in many countries within the European Union over their business practices.

In the latest salvo, Italy’s competition watchdog said Amazon abused its dominant position by promoting its own logistics service, which can ship and deliver packages, on its Italian platform to the detriment of third-party
sellers who did not use it.

“The abusive strategy adopted by Amazon is particularly serious, since it is likely to discourage, if not eliminate competition in the relevant markets,” read the 250-page decision by the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato).

Amazon said it “strongly” disagreed with the decision and would appeal.

OPINION: ‘It’s about connection with people’: Why Amazon won’t (completely) change Italian shopping habits

“The proposed fine and remedies are unjustified and disproportionate,” the company said in a statement.

The move comes two weeks after the same authority imposed a 68.7-million-euro fine on Amazon for infringing EU laws through restrictions that penalised sellers of Apple and Beats products.

In the same action, Apple was ordered to pay 134.5 million euros.

As European countries power ahead with antitrust litigation, US regulators are closely watching its approach to big tech firms after Washington pledged to intensify scrutiny of the technology industry.

The Italian watchdog said Thursday that third-party sellers who do not use Amazon’s logistics service are excluded from “a set of advantages essential for obtaining visibility and better sales prospects”.

Those included better access to Amazon’s “most loyal and high-end customers” who use Amazon Prime, the e-commerce giant’s loyalty program.

An Amazon employee walks by Amazon Prime delivery trucks at the company’s warehouse in Brandizzo, near Turin. Photo: Marco Bertorello / AFP

Moreover, a tough performance measurement system is reserved for sellers who do not use Amazon’s logistics system, which can lead, if failed, to suspension of the seller’s account.

“In doing so, Amazon has harmed competing e-commerce logistics providers by preventing them from presenting themselves to online sellers as service providers of comparable quality to Amazon’s logistics,” said the watchdog, adding that such conduct had “increased the gap between Amazon’s power and that of its competitors”.

In its decision, the authority said it had imposed measures on Amazon subject to review by a monitor.

The company must grant sales privileges and visibility to all third-party sellers who meet fair and non-discriminatory standards for fulfilment, and must decide and publish such standards, it said.

READ ALSO: Italy fines Apple and Samsung millions for ‘deliberately slowing down’ phones

Last month, EU legislation to impose unprecedented restrictions on how US tech giants do business passed a first, significant hurdle, with a European Parliament committee approving their version of the Digital Markets Act.

That would slap far-reaching rules on companies like Amazon, Facebook, Google, Apple and Microsoft. 

Such tech companies have been variously accused of stifling competition, not paying enough taxes, stealing media content and threatening democracy by spreading fake news.

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US AND ITALY

‘We stand together’: Italy and US discuss joint response to Ukraine crisis

Italian Prime Minister Mario Draghi on Tuesday visited the White House to urge US President Joe Biden to work on a long-term peace plan for Ukraine, and said Russia's actions had only strengthened their countries' unity.

'We stand together': Italy and US discuss joint response to Ukraine crisis

“The ties between our two countries will always be strong and, if anything, this war in Ukraine has made them stronger,” Draghi said.

Russian President Vladimir Putin “thought he could divide us. He failed,” Draghi told Biden. “We stand together.”

READ ALSO: ‘A waste of time’: Talks with Putin go nowhere, says Italy’s PM

Biden, who hosted Draghi in the Oval Office, echoed the sentiment, saying in comments while reporters were present that “Putin believed he could split us, but we’ve all stepped up.”

Draghi said at the meeting that allies should work on negotiations toward long-lasting peace in Ukraine, even as they continue to sanction Russia over its invasion of the country.

“People are asking, how can we end those atrocities? How can we reach a ceasefire? At the moment it is hard to have answers to that, but we need to think carefully about those questions,” Draghi said.

Despite Italy’s dependence on Russian gas and Rome’s traditionally friendly ties with Moscow, Draghi’s government has been a staunch supporter of efforts to punish Russia for its assault on Ukraine.

Along with Western allies, Rome has sent weapons to support Kyiv, although there is increasing unease about the move within Draghi’s broad coalition government.

READ ALSO: How is Italy responding to the Ukraine refugee crisis?

Draghi has also pledged support for any European Union sanctions on Russia’s energy sector, despite the fact that 40 percent of Italy’s natural gas imports are currently coming from Russia.

The EU is currently debating a phased ban on Russian oil imports, although this move would not touch Moscow’s huge gas exports.

The US and the EU in March announced a plan to supply least 15 billion cubic meters of liquefied natural gas to the bloc this year to help it end reliance on Russia.

Draghi and Biden speak in the Oval Office of the White House. Photo by POOL / GETTY IMAGES NORTH AMERICA / Getty Images via AFP

The meeting at the White House comes ahead of crucial G7 and NATO summits in Europe next month. Beyond Ukraine, the leaders are expected to discuss the global economy, Europe’s energy security and climate change.

Biden, who has made a priority of repairing tattered US-EU ties after taking over from Donald Trump in the White House, told Draghi that “a strong European Union is in the interests of the United States.”

“It’s good for everyone,” he said.

Draghi has particularly close ties with the United States.

He did his PhD at MIT and worked for both the World Bank and US investment bank Goldman Sachs. He was also president of the European Central Bank for eight years.

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