MILAN—Italy’s antitrust watchdog said on Thursday it had fined Amazon 1.13 billion euros ($1.28 billion) for alleged abuse of market dominance, in one of the biggest penalties imposed on a U.S. tech giant in Europe. Amazon said it “strongly disagreed” with the Italian regulator’s decision and would appeal. Global regulatory scrutiny of tech giants has been increasing after a string of scandals over privacy and misinformation, as well as complaints from some businesses that they abuse their market power. As well as Amazon, Alphabet’s Google, Facebook Inc., Apple Inc., and Microsoft Corp. have drawn heightened scrutiny in Europe. Italy’s watchdog said in a statement that Amazon had leveraged its dominant position in the Italian market for intermediation services on marketplaces to favour the adoption of its own logistics service— Fulfilment by Amazon (FBA)—by sellers active on Amazon.it. The authority said Amazon tied to the use of FBA access to a …