Worker exploitation forms basis for latest action against Big Tech

Trade

Milan’s Guardia di Finanza has carried out an emergency preventive seizure of around €121 million from Amazon Italia as part of an investigation led by prosecutors Paolo Storari and Valentina Mondovì. The charge? Tax fraud, a crime that continues to cast a shadow over the business practices of major multinationals.

The investigation focuses on an alleged labour exploitation scheme called ‘labour tanks’ – a mechanism whereby companies outsource their logistics services to cooperatives, consortia and filter companies, thereby receiving highly competitive rates. However, these irregular practices raise the serious problem of labour exploitation, whereby what are effectively full-time employees are given the same conditions as contractors.

This is not the first time that similar allegations have surfaced. Previous investigations have targeted other logistics and transport giants, such as DHL, GLS, Uber, Lidl, Esselunga, GS of the Carrefour group and others. Even in those cases, the system involved the use of filter companies that formally hired workers but did not guarantee social security and social contributions.

This research has revealed a disturbing picture of labour exploitation, with workers being forced to move from one company to another. Technically, all the jobs are separate, but they are part of the same tax avoidance scheme.

According to the Milan Public Prosecutor’s Office, the seizure of €121 million was justified because the fraudulent mechanism would still exist and be responsible for the exploitation of workers and significant losses to the public purse.

The Internal Revenue Service noted that relationships with suppliers deemed critical continued into 2023, with the issuance of additional invoices for taxable income of more than $135 million and sales tax of nearly $30 million.

The prosecutors argued that Amazon Transport Srl failed to provide guarantees for employees or “any other management method aimed at interrupting the unlawful effects of the fraudulent mechanism in which it is directly involved in the leading role of main and direct beneficiary of both the services provided to the company by individual employees and of the undue and substantial financial advantages obtained to the detriment of the Treasury, with a total value of €121,466,315.12… in relation to the years between 2017 and 2022”.

Read more: Amazon Tax Act