A billion is nothing for Amazon. They'll barely feel it. It's not even a slap on the wrist - more like waving an index finger snd saying "behave or else".
They took a massive loss on that fine so it’s way more than a finger wave. Please put some effort into justifying your statements.
Fining more than revenue in Italy is one thing and may look bad on paper if you take an italy-centric view but 1B is ~1% of Amazon's quarterly revenue. Amazon is a massive company and Italy could be a loss-leader for years maybe even decades and not make a dent. All the while Italian businesses suffer and wealth compounds somewhere else.
There's also no absolute way to measure the market share/billions (and in which related markets) they've captured by the abuse they've perpetrated. Generally governments fine too little and too late, not too much and too early.
They might never profit enough from Italy to make up for this.
Please note that I'm talking about revenue not profit ("income"). In 2020 (and 2021, which to be fair are maybe a little bit skewed) Amazon was consistently making >$90B in revenue for the quarter. Key word being revenue.
> The company also delivered its largest quarter by revenue of all time at $125.56 billion, pushing it past the symbolic $100 billion mark for the first time.[0]
Wow it's frustratingly hard to find such a simple thing as revenue for a company graphed by quarter -- ycharts is at least straight forward[1].
[0]: https://www.cnbc.com/2021/02/02/amazon-amzn-earnings-q4-2020...
If you paid 1.3B one-time to secure yourself a revenue stream that pays out 200MM than you would have otherwise gained a quarter, you're going to make your money back in ~6 quarters. It's absolutely worth it to take the temporary hit to income (obviously better if you didn't, which they were counting on) -- in fact knowing up front it'd be worth it.
Considering only the hit to short term income makes sense only in the short term, I think -- the Italian industry that was muscled out because they didn't want to use FBA, or the italian logistics providers that weren't chosen because of the incentive to use FBA face more difficulty. Amazon is amplifying solidifying it's own revenue streams, and that effect is likely to persist past a quarter or two.
I may be mistaken but I think of it like the other non-profit making tech companies that are floating around -- unexpected losses in the service of market domination are worth the gained and/or even-more-stabilized revenue streams.
If you see the 2020 numbers Amazon has made 21.33B (on 386B revenue). AWS business in 2020 has generated 13.5 of that (with a 45B revenue)
Hard to quantify (well the authorities gave it a shot) how much the abuse garnered them, but governments tend to under-penalize rather than over-penalize corporations.
[0]: https://ycharts.com/companies/AMZN/revenues
[1]: https://www.macrotrends.net/stocks/charts/AMZN/amazon/revenu...
I was very careful to avoid writing income for that very reason, I did not say that it was their income -- I said they "made" that much, which they did, they made that much revenue. It's in the link itself as well. 1% of quarterly revenue is still not a lot to pay.
Income can also be a misleading indicator to watch -- if you're going to make a royalty deal for example you'd better do it on revenue, not income.
It is when your net margin is in single digits[1] (5% as of sept 2021, but has been as low as 1%).
[1] https://www.macrotrends.net/stocks/charts/AMZN/amazon/profit...
Until fines recur like revenue does it's a drop in the bucket.
This fine might not be that much in itself, but it sets the precedent, which makes fines in other countries more likely.
I do agree with you though, just like the australian news outlets fining FB+Google thing, governments are figuring out that international mega corps are also a good source of income by way of fines.
I fear that even this is also short sighted -- even when imposed by static fines like this, the 1.3B number looks huge, but what we can't see is whether it was actually economical for Amazon to do this (I think it was), and the thing is the companies that were destroyed as a result are much harder to re-create in an environment where Amazon still has the overwhelming amount of marketshare/monopoly power. Eventually, if this continues and Amazon decides to hit back, the lack of natural competition (due to fines that came too little too late in regards to anti-competitive behavior) may put the nation state(s) between a rock and a hard place.
In all seriousness, is it documented anywhere where these fines end up and who exactly benefits from them?
Wut? Italy tax revenue last year has been 708B euros, this is < 0.2% of just that