Prosecutors suspect the e-commerce giant acted like a “Trojan horse”, bringing Chinese goods into Italy without paying sales taxes or customs duties

International News via Reuters:

Italian police raided two Amazon sites on Monday as part of a growing investigation into alleged customs and tax fraud involving Chinese imports, three sources with direct knowledge of the case said.

Prosecutors suspect the e-commerce giant acted like a “Trojan horse”, bringing Chinese goods into Italy without paying sales taxes or customs duties, according to a court document seen by Reuters.

The scheme could have cost the state hundreds of millions of euros and may extend across the European Union, sources said.

Dozens of officers from the Guardia di Finanza and the customs agency seized around 5,000 products at a logistics hub operated by the e-commerce giant in Cividate al Piano, in the northern province of Bergamo, the sources said.

At Amazon’s Italian headquarters in central Milan, police seized IT equipment and identified the manager responsible for the movement of goods within Italy.

Amazon declined to comment on the raids but said it was “committed to complying with all applicable tax laws and we cooperate fully with all relevant authorities”.

NEW LINE OF INQUIRY STEMMING FROM PREVIOUS CASE

Among the products seized at the Bergamo centre were toys, mobile phone covers, air fryers, pens and small scissors.

The case is a new line of inquiry stemming from an investigation into an alleged 1.2 billion euro tax evasion case.

Milan prosecutors, working with the Monza branch of the Guardia di Finanza, suspect that goods are being imported from China into Europe and then moved into Italy through undisclosed channels to be distributed and sold via Amazon’s marketplace.

This constitutes smuggling and violates EU customs laws, prosecutors say.

Three sources said the number of products involved could reach half a million, with dozens of Italian companies, many believed to be fronts for Chinese entities, part of the scheme.

It was not immediately clear what impact the raids would have on Amazon operations in Italy.

PROBE EXPECTED TO EXPAND TO OTHER EU NATIONS, SOURCES SAY

The investigation is expected to be extended to the rest of the 27-nation EU, a source said.

Milan prosecutors were summoned in July to The Hague headquarters of the EU agency for criminal justice cooperation, Eurojust, where they presented their inquiry to counterparts from several EU countries including Germany, France, the Netherlands, Poland, Spain, Belgium, Sweden and Ireland.

Disputes over customs duties and sales taxes have fueled growing tensions with the United States over the past year, but it is unclear how this case involving China will be viewed in Washington and Brussels.

EU PROSECUTORS ALSO INVESTIGATING AMAZON’S ACCOUNTS

In the original 1.2 billion euro tax evasion case, Milan prosecutors investigated three managers and Amazon’s Luxembourg-based European unit over alleged tax fraud related to online sales in Italy between 2019 and 2021.

In relation to that case, Italy’s tax agency has submitted a settlement proposal to Amazon on which the U.S. group must decide by December.

Prosecutors believe Amazon’s algorithm enables goods from non-EU sellers, mostly Chinese, to be sold in Italy without identifying the supplier, helping them avoid VAT.

Under Italian law, platforms offering goods for sale are jointly liable for unpaid taxes by non-EU sellers.

Amazon has previously said it complies with all tax laws.

Separately, the European Public Prosecutor’s Office has opened its own investigation into Amazon’s accounts from 2021 to 2024 after new EU rules imposed stricter sales tax obligations on marketplaces.

Reporting by Emilio Parodi; editing by Crispian Balmer and Mark Heinrich

The CFE-CGC Telecoms union said it had asked France’s highest administrative court to annul a July decision award Amazon 10-year rights to frequencies for its low earth orbit satellite network

International News via Reuters:

A French union filed a legal challenge on Monday against a decision by the country’s telecoms regulator to grant radio spectrum to Amazon’s satellite internet service, the biggest test yet of the U.S. tech giant’s broadband ambitions.

The CFE-CGC Telecoms union said it had asked France’s highest administrative court to annul a July decision by regulator Arcep to award Amazon 10-year rights to frequencies for its low earth orbit (LEO) satellite network.

The union argued that Arcep did not conduct a market analysis before awarding the spectrum and failed to consult France’s competition authority. It also questioned why the watchdog did not require a competitive bidding process for the scarce frequencies.

Amazon and Arcep declined to comment.

The legal battle is another example of France confronting large U.S. technology firms at a time when satellite operators race to secure valuable spectrum licences.

Amazon plans to deploy a fleet of over 3,000 LEO satellites, previously known as Project Kuiper, with select enterprise services slated to begin in late 2025 and broader rollout expected in 2026.

The first 27 satellites were launched in April.

The union also raised security concerns, saying Arcep did not address public safety legal requirements or data protection issues for a non-European operator, which it said carried national security and emergency communications risks.

Advisory firm Oxford Economics, in a study commissioned by Amazon earlier this year, projected France to benefit the most from Kuiper, particularly through contracts with space launch provider Arianespace.

Competing in the emerging LEO broadband internet market are Elon Musk’s Starlink and France’s Eutelsat, with fleets of 8,000 and 648 satellites, respectively.

Concerns over European dependence on Starlink grew this year after fears emerged that access to the service, key to Ukraine’s military communications, could be pulled.

Starlink, which reports 8 million global subscribers but does not disclose country-specific figures, secured a similar 10-year licence in France in 2021.

“We didn’t see (Starlink) coming,” said Sebastien Crozier, chairman of the CFE-CGC union at Orange.

“They granted them a licence, and we no longer know how many subscribers they have.”

Reporting by Gianluca Lo Nostro and Leo Marchandon in Gdansk, editing by Milla Nissi-Prussak and Matt Scuffham

Firms in the U.S. and China are investing heavily in AI, generating a debate on whether this exuberance is fuelling a financial bubble or signalling a technological leap

International News via Reuters:

Europe is jeopardising its own future by missing the boat on artificial intelligence and must quickly remove obstacles that prevent the diffusion of this new technology, European Central Bank President Christine Lagarde said on Monday.

Firms in the U.S. and China are investing heavily in AI, generating a debate on whether this exuberance is fuelling a financial bubble or signalling a technological leap.

“With the United States and China ahead of the field, Europe has already missed the opportunity to be a first mover in AI,” Lagarde said in a speech in Bratislava, Slovakia.

“We still bear the costs of having been slow adopters during the last digital revolution,” the ECB president said. “We risk letting the wave of AI adoption pass us by and jeopardise Europe’s future.”

Unlike in the case of past technological waves, AI could spread faster and deliver tangible economic gains sooner, making it urgent for the 27-nation European Union to act.

However, simply buying AI solutions from established providers will not be enough because that will deepen Europe’s reliance on foreign entities, Lagarde said.

“We must diversify critical parts of the AI supply chain and avoid single points of failure. In the foundational layers, such as compute capacity based on chips and data centres, we should maintain a minimum capacity.”

The EU also needs to enforce interoperability and open standards to encourage competition, needs cheaper energy, more uniform regulation, and an integrated capital market to channel risk, Lagarde said.

Reporting by Balazs Koranyi; editing by Mark Heinrich