The Italian Financial Police seized €121mn (about $113m) from an Amazon unit in Milan after the ecommerce company was accused of tax fraud and labor malpractices within its logistics network.
In an order authorizing the seizure on Tuesday, the Milan prosecutor’s office stated that Amazon Italia Transport set up a “complex tax fraud” by concealing the nature of their relationship with couriers within its delivery network.
Amazon is the latest of a number of large logistics companies that have been scrutinized by Italian for their tax compliance and labor practices. Milan’s prosecutors office conducted similar investigations on global delivery groups DHL, United Parcel Services and others. Cash was also seized.
In the 94 page order authorizing Tuesday’s cash seizures, the prosecutor stated that the Amazon messengers were employed by autonomous subcontractors who “systematically” failed to pay the mandatory VAT and social security contributions.
The order stated that Amazon Italia Transport, which is a subsidiary of Amazon Europe established in 2016, exercised “the special powers of employers” to control the workers. These included “organising individual couriers’ activities, managing their operations and controlling their work, as well as providing the computer equipment and IT necessary to perform services”.
Amazon’s prices are competitive because of the “complex, fraudulent pyramid structure” that it has created, involving formal autonomous labor suppliers, various intermediaries and formally independent labour suppliers.
The order stated that the cash seized was a preventive action and relates to the alleged malpractices between 2017 and 2022.
Amazon has denied all wrongdoing. Amazon said that it complies with all laws and regulations in the countries where it operates. It also requires companies to comply with these laws and regulations.
It said that it and its partners adhered to “the highest standard” and that all suppliers must adhere to a code. Amazon said that it will “assist the relevant authorities in their investigations”.
Amazon’s treatment of its workers has been a subject of scrutiny for many years. A ballot in a UK warehouse this month failed to win a majority of unionization by the tech giant.
The Milan prosecutor’s order stated that Amazon’s relationship to the couriers who deliver its products appears to be in violation of the country’s labor laws.
The order of the prosecutor stated that behind the formal contracts and invoices of Amazon Italia with companies that supplied workers for the last-mile delivery, “we found the existence of one economic entity, which was directed, managed, and organised from every perspective by Amazon Italia Transport”.
Amazon Italia Transport “exercises a direct control over individual couriers” who are formally employed by independent manpower providers, and that these suppliers have “no autonomy in terms of operations”, according to the order.
Amazon’s case comes after Italian authorities, in December, sequestered $94.5mn (£73.5m) from the local unit for the US-based global shipping service UPS. They accused the company of being the employer of over 8,500 workers registered with an autonomous co-operative.
In a similar case, authorities also seized €20mn in 2021 from DHL.
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