A protest against multinational technology company Amazon during the Covid-19 pandemic, on Nov. 27, 2020, in Rome, Italy.
Antonio Masiello | Getty Images News | Getty Images
When Italy’s competition regulator slapped a hefty fine of 1.13 billion euros ($1.28 billion) on Amazon last month, it was just the latest salvo in a string of moves against Big Tech.
The watchdog, Autorita Garante della Concorrenza e del Mercato, ramped up its actions in the last year with a flurry of rulings against the e-commerce giant, Alphabet’s Google and Facebook owner Meta, to name a few.
In the case of Amazon’s latest fine, the regulator took issue with the firm encouraging Italian sellers to use its own logistics service, Fulfilment by Amazon, which the watchdog said was an abuse of its dominant position. It’s a charge that Amazon denies.
Renaud Foucart, a senior economics lecturer at the U.K.’s Lancaster University, told CNBC that the substantial monetary sanction on this occasion is part of a trend of national regulators acting against Big Tech firms because wider EU-level investigations can be “very slow.”
“The national regulators want to show that they are active, that they are actually doing something,” he said.
AGCM has been very active. Throughout 2021, it levied several fines against large U.S. tech companies. In a separate case, it fined Amazon and Apple over alleged anti-competitive cooperation. It fined Google 102 million euros over “abuse of dominant position” in its car software product, and in February, slapped Facebook with a fine of 7 million euros over its use of data.
The sanctions vary greatly in their size but carry a similar message: National regulators will take action in their home markets.
But regulators like AGCM will not go without challenges to their rulings. Amazon fired back against the order and plans to appeal the $1.28 billion fine.
“The proposed fine and remedies are unjustified and disproportionate,” a spokesperson said.
Regulator capacity under strain
Maria Luisa Stasi, a senior legal officer at Article 19, a digital rights nongovernmental organization, said it’s not surprising that some national watchdogs, like those in Italy as well as France and Germany, have taken their own initiative to move so forcefully against Big Tech.
“Certain competition authorities in Europe are way more inclined to go for sector inquiries or market studies where they think that there is an environment where there might be some problems rather than waiting for complaints coming in,” she said.
It’s not a coincidence, she added, that these probes are happening in markets with larger populations that have more developed digital audiences and consumers.
“In a number of the biggest cases that we’re seeing in Europe at the moment, they’ve been somehow supported, if not initiated, by consumer associations or individuals that got together,” she said. “It’s more a bottom-up push.”
However, she said, there will be issues of budget, resources and capacity, with regulators of all shapes facing hurdles with increasingly large digital workloads.
Sifting through evidence and data, especially in the case of Big Tech’s vast and global businesses, takes a great deal of elbow grease that can strain budgets and know-how.
“If you put on my desk a number of protocols or codes, I’m not able to tell you if that software has been an instrument for a cartel or not because I’m not able to read it. This might slow down the process a lot.”
She said she’s in favor of regulators taking interim measures against companies, for example by ordering the halting or restriction of a particular activity during an investigation rather than waiting until the probe concludes, which could take years.
Other competition watchdogs have set up specialist units to address Big Tech. The U.K.’s Competition and Markets Authority, which has also accelerated its own actions against large digital players of late, established a dedicated tech unit last year to probe digital giants. Most notably, the CMA is locking horns with Facebook over its Giphy acquisition.
Major overhaul underway in Europe
While the likes of the AGCM have acted on their own, the dynamic of competition regulation in Europe, specifically around Big Tech, is about undergo a significant overhaul.
The Digital Markets Act is a sweeping set of new EU regulations still in gestation but nearing the finish line. It will be a high priority for the Council of the EU, where government ministers meet to adopt laws, which is currently being led by France.
The DMA will tighten rules for large tech companies — so-called gatekeepers — that are dominant in the market to prevent abuses. It will also introduce greater scrutiny of deals on mergers and acquisitions.
The European Commission, the EU’s executive arm, will carry out investigations into abuses or misdeeds by these gatekeepers.
Luisa Stasi said that the question of capacity and resources hangs over the DMA as well.
“Almost everything is going to be on the Commission’s desk. Is the Commission going to be able to do that? Again, a capacity issue,” she said.
In the meantime, other national regulators — whether it’s in competition law or other fields like privacy and data protection — continue to take action.
“The Germans have been very active, the French have been very active in the past,” Lancaster University’s Foucart said.
But many regulators need to buckle down for the long haul, he added.
“If you find [against] one of those big companies, you still need to win in court later. They can appeal at the European level.”
Source : Sky.com