Last month, the Luxembourg National Commission for Data Protection, an independent authority established to regulate data protection and privacy in the European Union, fined Amazon $887 million (€746M) for breaching EU data protection laws.
In that decision, the commission claimed that Amazon’s processing of users’ personal data didn’t comply with the EU’s General Data Protection Regulation. Along with the imposed fine, the commission also required Amazon to revise its practice of processing data.
In response to the commission’s decision, Amazon stated the claim was without merit and disclosed its own findings during a regulatory filing. According to the statement released by Amazon, there hasn’t been any sort of data breach, and all of the customer data that Amazon has collected so far has not been exposed to third parties. Amazon also stated that it plans to appeal the commission’s decision.
This decision was the final result of a probe that first began back in 2018, after a French privacy rights group filed a complaint. Now, that group welcomes the commission’s decision with caution, with a representative stating that the group should remain vigilant regarding Amazon.
Back in May 2018, the GDPR put forth a set of rules regarding data privacy and production, and ever since, the EU data protection regulators’ powers have significantly increased. For the very first time, these regulations allow groups and watchdogs to go after brands and corporations and allow for fines of as much as four percent of any business’s annual global sales. Up to this point, the biggest fine came from a French watchdog group that was issued to Google.
In the last few years, Amazon has been drawing plenty of criticism for the vast amounts of data it has collected on a number of partners and customers, including various independent merchants who work with the company’s retail marketplace, people who use its Alexa digital assistant and even shoppers who simply browse the Amazon website. According to Amazon, all of this data are collected with the goal of improving customer experience. The company has also set out specific guidelines that define what employees can and can’t do with that data. However, plenty of lawmakers and regulators have already raised numerous concerns that the corporation has been using vast troves of data to give itself an unfair advantage in the marketplace.
Specifically, in November of last year, commissioners in the EU announced they believed Amazon’s non-public data was being misused to help the corporation compete with other markets in Germany and France. Additionally, the European Commission has also stated that there might be potential data privacy issues with the corporation’s digital assistant as well as with the data that Amazon and others are able to collect regarding user behavior.
In the last few years, an increasing number of companies have faced legal issues due to the latest regulations from the EU. The best way to go about solving this issue is for companies to be transparent with their user base regarding how data is being used. Whenever any complaints that claim otherwise are made by other organizations, companies should work with regulators to show its transparent business operations and data collection protocol in order to protect its reputation.
Ronn Torossian is CEO of 5WPR, a leading PR Firm.