Amazon Faces Record Privacy Fine as Europe Wields Tougher Rules

(Bloomberg) -- Amazon.com Inc. faces a record European Union privacy fine as high as 350 million euros ($426 million) as a probe by its main data protection watchdog in the bloc draws to a close.

Luxembourg’s Data Protection Commission is planing to slap the online retailer with the penalty following a 2018 complaint by a French privacy rights group, according to three people familiar with the probe, who can’t be identified because the decision isn’t final.

La Quadrature du Net, which said it was acting on behalf of more than 10,000 customers, had called on regulators to crack down on “behavioral analysis and targeted advertising” by Amazon and levy a fine that was as “high as possible” due to the “massive, lasting and manifestly deliberate nature” of the alleged violations without the consent of its users.

EU data protection regulators’ powers have increased significantly since the bloc’s so-called General Data Protection Regulation, or GDPR, took effect in May 2018. It allows watchdogs for the first time to levy fines of as much as 4% of a company’s annual global sales. The biggest fine to date was a 50 million-euro penalty for Google issued by France’s watchdog CNIL.

Amazon and the Luxembourg data protection watchdog declined to comment on the fine, which was first reported by Dow Jones. Local laws bind the Luxembourg authority to professional secrecy and prevent it from commenting on individual cases, or confirm receipt of a complaint.

“It’s good to see that after three years of silence, something is happening,” said Bastien Le Querrec, a member of La Quadrature du Net’s litigation team, adding the group wasn’t aware of the decision.

Amazon has drawn scrutiny in recent years for the vast trove of data it has amassed on a range of customers and partners, including independent merchants who sell on its retail marketplace, users of its Alexa digital assistant, and shoppers whose browsing and purchase history inform what Amazon shows them on its website.

Intense Scrutiny

The company says it collects and analyzes data to improve the customer experience, and sets guidelines governing what employees can do with internal data. Some lawmakers and regulators have raised concerns that the company has used what it knows to give itself an unfair advantage in the marketplace.

The privacy probe also adds to intense antitrust scrutiny of Amazon’s business in Europe. Amazon is being probed by the EU over its use of data from sellers on its platform and whether it unfairly favors its own products. Germany has multiple probes into Amazon’s sales. The U.K. is also examining similar issues to the EU, the FT reported earlier Thursday.

Meanwhile, the EU sees potential antitrust problems with voice assistants and the data they allow Amazon and others to collect on user behavior, the European Commission said on Wednesday.

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