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Amazon Could Benefit From Legal Loophole Which Italy’s AGCM Is Trying to Work On

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Italy’s competition watchdog AGCM is trying to close a legal loophole that has allowed several companies to evade antitrust fines and may help Amazon in an ongoing appeal, a legal expert and two sources told Reuters.

The European Commission is closely following the matter, which has potential implications for a record EUR 1.1 billion (nearly Rs. 9,860 crore) fine in Italy that the US e-commerce company is challenging before local administrative courts.

A 1981 law, only recently applied to antitrust cases in Italy, implies that the AGCM must notify companies targeted by its investigations within 90 days of it becoming aware of alleged anti-competitive behaviour.

The law has been used by the Council of State, Italy’s top administrative court, over the last three years to scrap several antitrust penalties on account of a failure to meet that time limitation.

Law professor Michele Ainis, an AGCM board member until March, told Reuters that the Council of State’s approach was seriously problematic, as the 90-day limitation is unrealistic for complex antitrust cases.

“The Italian antitrust is the only (competition) agency in Europe subject to this (time) guillotine,” he said in a phone interview. “It is such a tight deadline that it is almost impossible to respect.”

Amazon was handed the fine in 2021 by the AGCM for alleged abuse of a dominant position in the Italian market to favour the adoption of its own logistics service by sellers active on Amazon.it.

Amazon said at the time it “strongly disagreed” with the Italian regulator’s decision and would appeal.

Two sources with knowledge of the situation confirmed that the AGCM was concerned about losing more cases that go before the Council of State on time limitation grounds, including on the Amazon fine.

The Council of State is the final court of appeal against AGCM decisions.

Two other sources said the issue of the 90-day rule is one of the arguments that Amazon has presented in its appeal of the EUR 1.1 billion fine, currently sitting before a lower-level regional administrative court.

EU involvement

The European Commission said in a statement to Reuters it was “aware of the recent developments in the case-law of the Italian courts and of the concerns raised by the Italian competition authority.”

Commission spokeswoman Arianna Podesta said the EU executive “is in contact with Italian authorities”, but declined to confirm it had sent a letter to Rome as part of procedures that could lead to an EU infringement procedure.

Ainis said if EU legal proceedings were needed to settle the issue this would be “the worst scenario” for Italy, as it would take time and lead to possible fines.

Alternatively, the government could pass a law to close the loophole, or Italian administrative judges could seek an opinion from the EU Court of Justice.

Ainis believed any EU legal action would be based on a 2019 EU directive on the prerogatives of national competition authorities.

Podesta cited it in her statement, indicating it was relevant.

She said it was crucial that national competition authorities have sufficient time to conduct all the necessary investigations in complex cases.

“It is also important that national competition authorities are able to prioritise certain cases and deprioritise others,” she added.

The AGCM, the Council of State and Amazon Italy declined to comment.

© Thomson Reuters 2023


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