Amazon Record Fine

Amazon Challenges Record Breaking $865 Million EU Data-Protection Fine

The e-commerce giant disputes the findings of the Luxembourg Data Protection Commission and says it will appeal.

Amazon.com Inc. has appealed a record penalty of 746 million euros ($865 million) for allegedly violating strict European Union data protection rules.

The appeal was filed at the Luxembourg Administrative Court on Friday, according to Luxembourg court spokesman Henri Eippers.

The challenge comes after the CNPD, Luxembourg’s data protection regulator, where Amazon has its base in the EU, fined the US tech giant in July.

The regulator ruled that Amazon violated the block’s General Data Protection Regulation, or GDPR, by processing users’ personal data. The decision was sparked by a 2018 complaint from French privacy group La Quadrature du Net.

The world’s largest online retailer has over the past few years carefully scrutinized the vast amount of data it has gathered about a number of customers and partners, including independent dealers selling on its retail marketplace, users of its digital assistant Alexa and Buyers whose surfing and purchase history informs what Amazon shows them on its website.

The company says it collects data to improve the customer experience and sets guidelines for what employees can do with it. Some lawmakers and regulators have expressed concerns that the company has used what it knows to give itself an unfair advantage in the market.

The powers of EU data protection regulators have increased significantly since the blockade’s GDPR rules went into effect in May 2018.

The law allows watchdogs to impose fines of up to 4% of global sales annuals of a company. The privacy investigation adds to the intense antitrust scrutiny of Amazon’s operations in Europe.

Amazon is being investigated by the EU about its use of seller data on its platform and whether it unfairly favors its products. Germany has more probes on Amazon sales. The UK is also looking into EU-like issues

Amazon is already countering other accusations from European observers. This is being investigated by E.U. antitrust regulator Margrethe Vestager, who in her complaint argued that the company uses the vast amount of information it collects on its trading platform to identify popular products sold by third-party vendors on its website, then offers similar products itself, sometimes at lower prices.

The maximum penalty in this case, regulated by various data protection laws, could be up to 10 percent of Amazon’s sales. But such cases can drag on or be dropped from appeals for years.

Amazon plummeted nearly 7.6 percent, or $272.33, to $3,327.59 a share on Friday. A day earlier, it announced second-quarter results that fell short of expectations.

The company, which recorded tremendous numbers during the coronavirus pandemic as consumers shopped more online, also warned that growth could slow in coming quarters as they continually return to personal shopping

Matthew Giannelis

Secondary editor and executive officer at Tech Business News. Contracting as an IT support engineer for 20 years Matthew has a passion for sharing his knowledge of the technology industry.

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