Amazon was heavily fined $887 million for violating EU data protection regulations

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Tencent technology news on July 31, according to the documents submitted by Amazon to the U.S. Securities and Exchange Commission (SEC) on Friday, because the processing of personal data by the company’s European core department does not comply with the EU general data protection regulations (gdpr), it violates the EU data protection law, The Luxembourg Data Protection Commission (CNPD) issued a fine of 746 million euros (about US $887 million) to the company on July 16.
The EU general data protection regulations require enterprises to obtain the consent of users before using personal data, otherwise they will face high fines. While the Luxembourg Data Protection Commission punished Amazon, it also issued an order to modify some business practices that Amazon did not specify. Amazon said that the decision of the Luxembourg Data Protection Commission had no legal basis and would appeal to the court. The company said: “our decision on how to display relevant advertisements to customers depends on a subjective and untested interpretation of European privacy law, and the proposed fine is even completely inconsistent with this interpretation.”
So far, the Luxembourg Data Protection Commission has not immediately responded to a request for comment. The agency is Amazon’s main privacy regulator in the EU because Amazon’s EU headquarters is located in Luxembourg. As early as early as June this year, media reported that the Luxembourg Data Protection Committee had drafted a draft decision and distributed it to data protection institutions in 26 other EU countries. The content of the draft is a fine proposal for Amazon’s privacy disclosure, which is expected to exceed $425 million.
The penalty previously proposed by the Luxembourg Data Protection Commission accounted for about 2% of Amazon’s net profit of $21.3 billion in 2020 and 0.1% of its revenue of $386 billion. People familiar with the matter said that Luxembourg regulators had received opposition from some peers to its draft decision, and at least one of them said that the fine should be higher. The final fine of 746 million euros (about US $887 million) is more than twice the original fine.
The record holder who had been fined the highest for violating the EU general data protection regulations was Google, which was fined 50 million euros (about US $57 million). With Amazon recently fined 746 million euros, it shows that the cost of violating EU privacy rules is increasing over time《 The EU general data protection regulation allows a fine of 20 million euros or 4% of the company’s annual global revenue, whichever is higher. After privacy advocates repeatedly criticized the European Commission for its slow action and imposed a small fine, which could not dissuade rich companies, the enforcement of the EU general data protection regulations seems to have taken a turn for the better. For companies like Amazon, $887 million is still nothing, but it is an order of magnitude higher than Google’s fine.
Last year, the European Commission disclosed the results of a separate investigation into how Amazon promoted its products in the region. Specifically, the EU Commissioner found that Amazon uses third-party seller data in the market to support its products. According to the survey results, Amazon may be fined up to $28 billion.
Globally, regulatory scrutiny of technology giants has been increasing with a series of privacy and misinformation scandals and some companies complaining about their abuse of market power. In addition to Amazon, American technology giants such as Google, Facebook, apple and Microsoft have also attracted great attention in Europe. Last December, the French data privacy regulator imposed the largest ever fine of 100 million euros ($118.82 million) on Google for violating the country’s regulations on online advertising trackers.
Although Amazon’s power has been more scrutinized by policymakers, its trillion dollar valuation has not prevented it from trying to increase business for its empire. In May this year, Amazon announced that it had agreed to buy MGM, a Hollywood film company, for $8.45 billion. The Federal Trade Commission is reviewing the acquisition. The FTC also launched an extensive antitrust investigation into Amazon’s business practices. In addition, Amazon is fighting a series of bills in the U.S. Congress aimed at controlling the market dominance of large technology companies. Amazon partially defended its competitive behavior, saying that it provided products and services to benefit customers.
With hundreds of millions of consumers turning online to meet their shopping, entertainment and work needs, Amazon’s strength has been further strengthened, making almost $30 billion in profits in the past three years. According to the financial report released by Amazon on Thursday, the company’s net revenue in the second quarter was US $113.1 billion, exceeding US $100 billion for the third consecutive quarter, an increase of 27% over US $88.9 billion in the same period last year, lower than the market expectation of US $115.07 billion; The net profit was US $7.778 billion, an increase of 48% over US $5.243 billion in the same period last year; Diluted earnings per share were $15.12, which was better than the same period last year and exceeded Wall Street’s estimate of $12.22.
But like other large technology companies, investors have begun to question whether this momentum can be maintained. Amazon said in its financial report that the net revenue in the third quarter of fiscal year 2021 was US $106 billion to US $112 billion, a year-on-year increase of 10% to 16%, including the favorable impact of about 70 basis points expected to be brought by exchange rate changes. The median of this range of expectations was $109 billion, less than Wall Street’s expectations. Amazon expects operating profit of $2.5 billion to $6 billion, compared with $6.2 billion in the same period in 2020.
Affected by the lower performance and performance outlook than market expectations, Amazon’s share price plunged $272.33, or 7.56%, to $3327.59 in regular trading on the Nasdaq stock market on Friday. According to Friday’s closing price, Amazon’s market value is about $1.68 trillion. In the past 52 weeks, Amazon’s lowest share price was $2871.00 and its highest share price was $3773.08( Tencent Technology (compiled / Mowgli)