A European privacy regulator has slapped Amazon with a record fine totaling $887 million for violating the European Union's data protection laws, the e-commerce giant said Friday.
The National Commission for Data Protection in Luxembourg, where Amazon's European operations are headquartered, issued the decision on July 16, the company disclosed in a securities filing. The privacy watchdog said Amazon Europe Core's processing of personal data for advertising did not comply with the EU General Data Protection Regulation, the company said in the filing.
Amazon told The Washington Post that the decision does not relate to a data breach and that "no customer data has been exposed to any third party." The company said it cooperated throughout the investigation but rejects its findings and plans to appeal.
"Maintaining the security of our customers' information and their trust are top priorities," the company said in an emailed statement. "The decision relating to how we show customers relevant advertising relies on subjective and untested interpretations of European privacy law, and the proposed fine is entirely out of proportion with even that interpretation."
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(Amazon's founder and executive chairman, Jeff Bezos, owns The Post.)
The penalty smashes past the previous high of $56.6 million assessed on Google in France for its data consent policies. It reflects regulators' growing enforcement efforts against some of the world's most powerful companies.
"Big Tech and Brussels are in a 'Game of Thrones' battle, and this latest fine against Amazon speaks to the high tensions," Dan Ives, managing director of Wedbush Securities, told The Post in an email. "Amazon is just the first as we expect more regulatory scrutiny against Apple, Google and others on the horizon from the EU."
The National Commission for Data Protection did not respond to a request for comment from The Post.
Other EU regulators would have to approve the fine, a lengthy process that could lower it down the line. The maximum penalties allowed under the EU General Data Protection Regulation are capped at 4% of the company's worldwide revenue from the previous year.
Amazon's revenue exploded to $386 billion in 2020, making even the suggested record-setting fine a relative drop in the bucket. At least one regulator has complained to Luxembourg that the fine should be higher, the Wall Street Journal reported.
Amazon already is fending off other charges from European watchdogs. It's under investigation by EU antitrust regulator Margrethe Vestager, who alleged in complaint that the company uses the vast pool of information it gathers from its marketplace platform to identify popular products being sold by outside vendors on its website, then offers similar products itself, sometimes at lower prices.
The maximum penalty in this case, governed by different privacy laws, could be as much as 10% of Amazon's revenue. But such cases can drag though years of appeals or be dropped.
Amazon plummeted nearly 7.6%, or $272.33, to $3,327.59 a share on Friday. A day earlier, it announced second-quarter results that fell short of expectations. The company, which saw tremendous numbers during the coronavirus pandemic as consumers did more of their shopping online, also warned that growth could slow in the coming quarters as they steadily return to in-person shopping.
In the three-month period that ended June 30, Amazon reported $113.1 billion in net sales, a 27% jump from $88.9 billion in the second quarter of 2020. Profit surged to $7.8 billion, or $15.12 a share, versus $5.2 billion, or $10.30 a share, last year.
Amazon also expects third-quarter revenue of $106 billion to $112 billion. Analysts projected $118.7 billion, according to data compiled by Bloomberg.