• Italian police search Amazon's Milan headquarters, managers' homes, and a KPMG office in a fiscal fraud investigation.
  • The probe targets alleged customs and tax evasion linked to Chinese imports, building on prior disputes.
  • Amazon faces potential fines exceeding €1 billion and operational disruptions in Italy as prosecutors push for a resolution by early 2026.

Italian authorities escalated their scrutiny of Amazon's operations on Thursday, with police conducting coordinated searches at the company's Italian headquarters in Milan, the homes of seven local managers, and a KPMG office in the city. The raids are part of a new investigation into alleged fiscal fraud, including potential customs and tax evasion involving Chinese imports, according to people familiar with the matter.

This latest probe deepens Amazon's regulatory challenges in Italy, where it has already navigated a series of high-profile disputes. In December 2025, the e-commerce giant agreed to pay €510 million to settle a tax case covering 2019-2021, though Milan prosecutors rejected that deal and continued digging into suspected evasion of €1.2 billion. Now, their focus has shifted to the 2021-2024 period and possible fraud tied to imports from China, sources said. Without a swift resolution, Amazon could see its Italian logistics network face significant disruptions or asset seizures.

Efforts to restructure its tax practices have hit a snag, with the Guardia di Finanza—Italy's financial police—enforcing strict fiscal policies under EU digital tax rules. One source described the alleged schemes as "Trojan horse" import tactics designed to skirt duties. This echoes broader EU-wide pushes for fair taxation on U.S. tech firms, amid rising customs scrutiny on Chinese goods that could affect up to 500,000 products across the bloc. Amazon's net income dipped slightly in Q4 2025 due to higher operating costs from such regulatory pressures, even as revenue grew 11% year-over-year to $188 billion.

In a brief statement, an Amazon spokesperson said the company is "cooperating fully with authorities" but declined to comment further on the ongoing investigation. Attempts to reach KPMG for comment were unsuccessful. The raids also come on the heels of Amazon Italia's €180 million settlement in 2025 over labor and tax fraud involving "job bags" subcontracting and driver tracking algorithms, a case that led to the dismantling of that system and a shift toward direct hiring for 50,000 Italian workers.

Market reaction was muted initially, with Amazon's shares holding steady in pre-market trading, but analysts warn of long-term implications. "This could raise compliance costs by 1-2% for Amazon's European operations, forcing logistics tweaks and potentially setting a precedent for sector-wide direct hiring norms," one industry expert noted, speaking on condition of anonymity. The probe highlights tensions in Italy's €50 billion e-commerce sector, where tax evasion is seen as depriving public funds for essential services.

Looking ahead, prosecutors aim to conclude the investigation by early 2026, with potential fines that could exceed €1 billion. Similar raids have targeted other tech firms in Italy, such as Google and Uber, reflecting a hardening stance against big tech accountability. For now, Amazon continues its operations in Italy, but the specter of further legal action looms large over its European strategy.