News Analysis: Why Italy regulations stacking up against retailer Amazon

by Eric J. Lyman

ROME, Dec. 13 (Xinhua) -- A pair of regulatory threats could make life in Italy more difficult for e-commerce companies like Amazon, but commentators said the U.S.-based retailer should be able to weather the storm just fine.

The biggest threat could come from communications regulator AgCom, which said it is looking at Amazon as a potential competitor to the Italian postal service through its Amazon Logistics Services, which oversees the company's delivery services.

Part of the case is based on the idea that Amazon helps oversee the delivery of packages to consumers from thousands of smaller retailers who reach buyers, for a fee, through the dominant Amazon site.

If the view that Amazon is a package delivery platform in addition to its other roles, that would subject the company to the same regulations as state postal services and private courier services like DHL, Federal Express, and UPS. That would open Amazon up to big bureaucratic costs and could also force it to change the legal status of its Italy-based workforce, adding even more costs.

Additionally, AgCom, which also regulates the Italian Post Office, is reportedly considering a rule change that would allow parcels weighing up to five kilograms to be considered "small" packages, up from two kilograms under current rules. That would make the delivery market Amazon relies on more competitive.

An Amazon spokesman told Xinhua only that the company was "analyzing" AgCom's assertion and was not yet ready to comment. But Pietro Paganini, founder of Competere, a think tank and a business administration professor at Rome's john Cabot University, said the company probably should not be worried.

"This is one of those cases where the regulator should have contacted the company before making its charges," Paganini said in an interview. "Amazon isn't a delivery service, and I don't think it will be hard to prove that."

Like most large online companies operating in Italy, Amazon will also be subject to the new six-percent "web tax" Italy is planning to begin collecting in January 2019.

Italy is on pace to become the first European Union member state to collect the levy, which will be collected on online sales. Because it is easier to determine where sales of merchandise originate from then it is to calculate the value of online ad sales, the new tax is likely to hit Amazon harder than it will fellow Internet giants like Google or Facebook.

The two problems were enough to spark several stories in the Italian media speculating that Amazon could have a tough time in the coming months.

But despite that, Innocenzo Genna, a telecommunications- and Internet-sector consultant and founder of Digit@lians, also a think tank, told Xinhua he did not believe Amazon would have short-term regulation problems in Italy.

"The company is going to be fine in the short-term; I don't think it will be overly worried," Genna said. "The long term? That is still anyone's guess." Enditem