Thursday 10 June 2021 3:01 pm

Record $425m: EU's biggest privacy fine ever looms for Amazon

A European Union privacy regulator has proposed fining Amazon over $425m (£300m), as part of a process that could yield the biggest penalty yet under the bloc’s privacy law, according to reports.

A draft decision sanctioning Amazon’s privacy practices with the proposed fine has been circulated by the CNPD, Luxembourg’s data-protection commission, with the bloc’s 26 other national data-protection authorities.

With Amazon’s EU headquarters in the Grand Duchy, the CNPD is its lead privacy regulator in the EU.

The case is linked to alleged violations of Europe’s General Data Protection Regulation (GDPR) and Amazon’s collection and use of individuals’ personal data. It is not related to Amazon’s cloud-computing business, Amazon Web Services, according to the Wall Street Journal.

The draft decision will need to be agreed upon by other EU privacy regulators before it can be finalised under GDPR. The process, which could potentially take months, could lead to a higher or lower fine.

UK probe

The EU news comes only hours after the UK competition watchdog, which has been analysing the online retailer for months, is looking into how Amazon uses data collected on its platform and how the global tech giant decides which merchants appear in its “buy box”. 

A crucial selling feature, the “buy box” is the white panel on the right-hand side of a product, where buyers click to add to their shopping basket. 

An investigation into Amazon may look at whether or not the company unfairly favours merchants that use Amazon’s logistics and delivery services when deciding who can access the buy box and its Prime customers, according to a report in the Financial Times. 

The UK investigation is likely to cover similar ground to the two currently open investigations under way in Brussels, it is reported. 

One of the EU investigations is looking at how Amazon is using data to advance its own products to the potential detriment of rivals. 

Although the probe is at advanced stages, it may run for a further year or more as the EU has struggled to understand Amazon’s algorithm and gather enough evidence about it, according to reports. 

The second, less advanced, investigation, is scrutinizing Amazon’s criteria for the use of the buy box. The UK watchdog is reportedly keen to build a portfolio of cases against Big Tech companies.