(Updates to add Amazon's comment in the fifth and sixth paragraph)

Amazon's (AMZN) Italian unit has paid compensation and scrapped a monitoring system for delivery staff, bringing an end to a probe into alleged tax fraud and illegal labor practices, Reuters reported Friday, citing sources familiar with the matter.

Amazon has paid about 180 million euros ($209.9 million) to Italy's tax agency as part of a broader 1 billion euro settlement involving 33 companies - including the Italian units of DHL, FedEx (FDX), UPS (UPS) and supermarket chain Esselunga - that were targeted in similar investigations in Milan, Reuters said.

According to the report, Amazon's logistics services unit was accused of circumventing labor and tax laws by relying on cooperatives or small companies to supply workers, avoiding VAT and reducing social security contributions. The alleged practices took place as of July last year.

As part of the settlement, the companies under investigation also agreed to directly employ more than 50,000 workers who had previously been hired indirectly through cooperatives, according to multiple media reports.

Amazon spokesperson told MT Newswires that it has clarified its position with the relevant authorities.

All drivers are hired directly by delivery service partners under level G1 of the National Collective Labor Agreement for Transport and Logistics, and that it does not use cooperatives or subcontractors, Amazon added.

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