EU Penalizes Amazon $887 million for GDPR Infringement

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Photo by Daniel Eledut (Unsplash)

Tiffany WangTiffany Wang is an IPilogue Writer, IP Innovation Clinic Fellow, and a 2L JD Candidate at Osgoode Hall Law School.

 

In July, the European Union delivered an unprecedented fine against Amazon—a record $887 million USD. Luxembourg’s National Commission for Data Protection (CNPD) penalized Amazon for their misuse of consumer data for advertisement. The $887 million fine is almost triple the amount of General Data Protection Regulation (GDPR) fines ($322 million) issued by all of Europe’s regulators combined up to the start of 2021.

French privacy rights group La Quadrature du Net alleged in 2018 that Amazon manipulates customer data for commercial purposes vis-à-vis choosing what advertising information the customers gain exposure to. La Quadrature du Net claims to represent the interests of thousands of Europeans to ensure that Big Tech companies do not manipulate consumer information or behavior for commercial or political purposes.

Amazon refuses to remain idle. The multinational firm has already declared it will initiate the appeal process to refute this penalty. Amazon voiced that there has been “no data breach” and continues to promise that “no customer data has been exposed to any third party”. The irony here, however, rests in the reality that firms do not need to have suffered a data breach to trespass GDPR rules.

The EU’s penalty against Amazon signifies the force of regulations on American multinational firms. Legislation still has teeth despite Luxembourg’s historically friendly stance toward Amazon as a tax haven.

The unprecedented fine also underscores the EU’s increasing scrutiny of Amazon. Amazon has amassed a vast trove of data on a range of customers and partners (e.g. independent merchants, users of Alexa, and shoppers). Even though Amazon claims that collecting data helps to foster a better online retail environment, Amazon has not persuaded regulators and lawmakers. In fact, growing suspicion clouds the correlation between data and Amazon’s unfair advantage in the marketplace. The 2018 privacy investigation only fuels the antitrust quagmire. Not only has Luxembourg joined the chase, but Germany and the United Kingdom are also probing into Amazon’s dominant market status.

Amazon’s slogan is “Work hard. Have fun. Make history”. Indeed, Amazon has made history with its $887 million penalty. But is this the “history” that Jeff Bezos envisioned?

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