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Italy has become one of Big Tech's potential rivalry

Logistics Tech Outlook | Thursday, January 20, 2022

Italy’s competition custodian issued a fine of 1.13 billion euros on Amazon last month — the latest of several sanctions against Big Tech firms in 2021

FREMONT, CA: Last month, Italy's competition regulator imposed a hefty fine of 1.13 billion euros ($1.28 billion) on Amazon, the latest in a series of actions against the tech giant. The competition custodian, Autorita Garante della Concorrenza e del Mercato, has stepped up its enforcement in the last year, with judgments against Amazon, Alphabet's Google, and Facebook owner Meta, to name a few. The regulator took charge with Amazon's latest fine because the company encouraged Italian vendors to use its own logistics service, Fulfillment by Amazon, which the custodian argued was an abuse of its dominant position and Amazon disputed the accusation.

Experts remark that the hefty monetary penalty in this instance is part of a pattern of national regulators intervening against Big Tech businesses because large EU-level investigations can be extremely slow. The national regulators want to demonstrate that they are active and are genuinely doing something.

Autorita Garante della Concorrenza e del Mercato has been quite active in recent years. Several fines were charged against prominent US tech companies during the year 2021. It penalised Amazon and Apple in separate lawsuits for suspected anti-competitive coordination. It penalised Google 102 million Euros over “abuse of dominant position” in its car software product, and Facebook was fined 7 million Euros for its data practices.

The sanctions vary in amount but convey a similar message: National regulators are likely to take action in their home markets. Regulators like Autorita Garante della Concorrenza e del Mercato, on the other hand, are liable to face legal challenges in their rulings. Amazon has responded to the order, stating that it will fight the $1.28 billion penalties. It was also mentioned that the proposed penalties and remedies are unreasonable and disproportionate.

It is also remarked that a digital rights non-governmental organisation, some national watchdogs, such as those in Italy, France, and Germany, have taken the initiative to act so firmly against Big Tech was not surprising. Certain European competition agencies are much more likely to conduct sector inquiries or market studies when they suspect an issue in an environment rather than waiting for complaints to arrive. Experts have also observed that it is not a coincidence that these investigations are taking place in markets with a larger population that has more sophisticated digital audiences and consumers.

A number of the most significant instances that are witnessed in Europe recently are by consumer organisations or individuals that are associated with them. It is more of a grassroots effort. However, it is predicted that money, resource, and capacity concerns would arise, with regulators of all shapes confronted with ever-increasing digital workloads. Sifting through evidence and data takes a lot of time and effort, especially in the case of Big Tech's broad and global operations, which can put a strain on resources and expertise. Experts believe that the authorities should take interim steps against firms, such as ordering the suspension or restriction of a specific activity while an inquiry is underway, rather than waiting for the investigation to be completed, which may take years. Other competition watchdogs have created specialised sections to deal with Big Tech. The inability to recognise if the software was used by a cartel could significantly slow down the process. The Competition and Markets Authority in the United Kingdom, which has recently increased its operations against huge internet companies, formed a dedicated tech team last year to investigate digital giants. Most notably, the CMA is at odds with Facebook over its acquisition of Giphy.

While organisations such as the Autorita Garante della Concorrenza e del Mercato have taken action on their own, the dynamic of competition regulation in Europe, particularly in relation to Big Tech, is going to change dramatically.  The Digital Markets Act is a comprehensive set of new EU laws that is still in the works but close to completion. It is likely to be a top priority for the EU Council, which is now led by France and where government ministers gather to enact laws. To prevent abuses, the Digital Markets Act would tighten rules for huge tech businesses that are prominent in the market and also increase the inspection of mergers and acquisitions deals. Meanwhile, other national regulators continue to intervene, whether in the area of competition law or in other areas like privacy and data protection. Experts recall that the Germans and the French regulators have both been highly active in the past.

The French data agency Commission Nationale de l'informatique et des libertés CNIL fined Google and Facebook 150 million euros and 60 million euros, respectively, for their usage of cookies in the first week of January, while Germany's federal antitrust office is probing Google under newly granted powers. It was also noted that many regulators must be prepared to fight it out for the long run.

 

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