Key Points:
- Market domination occurs when a sizable chunk of an entire industry or marketplace is owned by a single firm or a select minority of enterprises.
- Italy has fined Amazon €1.13 billion for antitrust violations on its ‘Fulfilled by Amazon’ (FBA) platform, which harmed third-party sellers.
- Amazon “strongly disagrees” with this claim and intends to file an appeal arguing everyone has equal footing on the platform, irrespective of how they fulfill their orders.
What is Market Domination?
Market domination is defined as the control of a substantial percentage of a market by a single firm or a select minority of enterprises. Amazon, for example, controls a sizable piece of online shopping together with the cloud services offered by the Amazon Web Services subsidiary. This lawsuit is exclusive to Amazon’s Logistics Service provider, Fulfilled by Amazon (FBA).
Italy's Fine
The Italian antitrust authority said on Thursday that it has penalized Amazon €1.13 billion euros ($1.3 billion US dollars) for suspected market dominance misuse, being one of the largest penalties issued on a US internet firm in Europe so far. Amazon stated that it “strongly disagreed” with the Italian authority’s ruling and that it planned to submit an appeal. Following a series of crises involving privacy and disinformation, as well as concerns from certain firms that they misused their market position, international regulatory oversight of internet behemoths such as Alphabet, META, and Amazon has increased.
According to Italy’s regulator, Amazon used its leading position inside the Italian marketplace for intermediary solutions on markets to encourage merchants on Amazon.it to use its logistics service, Amazon FBA. As per the authorities, Amazon linked FBA access to a series of unique privileges, including the Premier “Prime” label that assisted in promoting exposure and sales on Amazon.it. This ensured that those products would be the very first to show results, and had access to exclusive amazon sales like Black Friday and more.
Amazon's Defense
According to Amazon, SMBs constitute more than half of any sales and all the yearly revenue on Amazon in Italy, and their performance is crucial to their corporate strategy. Amazon is simply one of several possibilities for small and mid-sized companies to offer their items either online as well as offline.
A violation of antitrust laws and monopolizing power and market share in any industry is problematic for both the small players and the consumers. Do you think that Italy has taken the right step in ensuring fair competition in online shopping?
