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Amazon’s physical grocery push deepens its fight against Walmart

Amazon is stepping up its push into physical grocery retail as it intensifies competition with Walmart, betting on large-format stores to complement its dominant e-commerce business. Analysts expect Amazon’s fourth-quarter physical store revenue, including Whole Foods, Amazon Fresh and Amazon Go, to rise to about $5.9 billion, reflecting a renewed focus on brick-and-mortar retail.

Amazon recently closed its Amazon Fresh and Amazon Go outlets, converting them into Whole Foods Market stores, signaling a strategic shift toward a stronger grocery identity. Its boldest move is the launch of a 225,000-square-foot mega-store near Chicago, designed to rival Walmart and Costco, while also functioning as a hub for same-day delivery.

The effort highlights Amazon’s challenge in matching Walmart’s vast physical footprint, which allows it to cut delivery costs and serve customers faster. While Amazon’s cloud division continues to drive growth, analysts say success in groceries could be key to boosting customer loyalty and long-term value.

Big Tech to Avoid Strict Obligations in EU Digital Rules Overhaul, Sources Say

Major U.S. technology companies including Alphabet, Meta Platforms, Netflix, Microsoft and Amazon are set to avoid strict new regulatory obligations under the European Union’s upcoming overhaul of digital rules, according to people with direct knowledge of the matter.

Despite strong lobbying from telecoms companies for tougher measures targeting Big Tech, the companies will instead fall under a voluntary framework as part of the planned Digital Networks Act (DNA), the sources said. The European Commission has declined to comment.

The DNA, which will be presented by EU tech chief Henna Virkkunen on January 20, is aimed at boosting Europe’s competitiveness and encouraging greater investment in telecoms infrastructure. The proposal will still need approval from EU member states and the European Parliament before it can become law.

Under the draft rules, Big Tech firms will be encouraged to cooperate voluntarily with telecoms operators in discussions moderated by BEREC, rather than being subject to binding obligations similar to those imposed on telecoms providers. One source described the approach as a “best practices regime” with no new mandatory requirements.

The planned overhaul will also address spectrum policy, with the Commission setting out guidance on licence duration, sale conditions and pricing methodologies to be used by national regulators during spectrum auctions, which often generate billions of euros for governments. While the goal is to harmonise spectrum allocation across the EU and reduce regulatory burdens for telecoms firms, some national regulators are expected to resist what they may see as increased centralisation of power.

In addition, the Commission plans to issue guidance on the rollout of fibre infrastructure, a key element of the EU’s digital strategy to narrow the gap with the United States and China. Governments may also be allowed to extend the 2030 deadline for replacing copper networks with fibre if they can demonstrate they are not ready to meet the target.

The EU’s digital policy push has drawn criticism from Washington in recent years, with U.S. officials arguing that new rules unfairly target American companies. Brussels has repeatedly rejected those claims.

Amazon Scraps Drone Delivery Plans in Italy After Strategic Review

Amazon has decided to halt its plans to launch drone-based delivery services in Italy, citing regulatory and business challenges that undermine the project’s long-term viability. The company confirmed the decision on Sunday following a strategic review of its operations in the country.

Amazon said that although it had made meaningful progress with Italian aerospace regulators, the broader regulatory environment did not support its commercial objectives for drone delivery. “Following a strategic review, we have decided to stop our commercial drone delivery plans in Italy,” the company said in a statement. It added that, despite positive engagement with regulators, the overall business framework remains a limiting factor.

Italy’s civil aviation authority, ENAC, described the move as unexpected. In a statement released on Saturday, ENAC said the decision appeared to be driven by internal company policy and was linked to “recent financial events involving the Group,” without providing further details.

Amazon had previously signaled strong momentum for the initiative. In December 2024, the company announced the successful completion of initial drone delivery tests in San Salvo, a town in the central Abruzzo region. Those trials were seen as a key step toward introducing faster, automated delivery services in Italy as part of Amazon’s broader global drone program.

The halt underscores the challenges facing commercial drone delivery projects, which must navigate not only aviation safety rules but also complex national business and regulatory environments. While Amazon continues to test and operate drone delivery services in select markets, Italy will no longer be part of its near-term expansion plans.