Italy confiscates $131 million from Amazon for alleged tax and labor violations

Italy's tax police have seized some 121 million euros ($131 million) from an Italian unit of e-commerce giant Amazon as part of an investigation into alleged tax fraud and illegal labour practices, prosecutors' documents showed on Tuesday.

In a 94-page order, the Milan Prosecutors' Office accuses the logistic services unit Amazon Italia Transport of circumventing labour and tax laws, relying on cooperatives or limited liability companies that supplied workers while omitting VAT tax duties and reducing social security payments.

Prosecutors allege such a system enabled the Amazon unit to keep the prices of its services competitive in the Italian market.

Amazon said it had adhered to the necessary rules.

"We comply with all applicable laws and regulations where we operate, and require companies who work with us to do the same...We will continue to help the relevant authorities with their inquiries," Amazon said in a statement.

Similar investigations have targeted other large businesses in recent years including global delivery groups DHL and UPS, German logistics firm DB Schenker and Italian supermarket chain Esselunga, prosecutors said.