Amazon may face $425 million fine over alleged EU privacy violations: report

Luxembourg is where the tech giant—whose business spans the realms of e-commerce, media, and cloud computing—has its EU headquarters. 

The CNPD, which is the lead privacy regulator covering Amazon AMZN, +1.50% in the EU, circulated a draft decision among the other 26 national privacy authorities in the EU sanctioning Amazon’s privacy practices and proposing the fine, the Journal reported. 

The case relates to alleged violations of the General Data Protection Regulation, or GDPR, which is the bloc’s sweeping suite of privacy and data protection laws implemented in 2018, the report said. The alleged legal violation relates to the tech giant’s collection and use of individuals’ personal data, and is not related to Amazon Web Services—its cloud computing arm—according to the report.

The other EU privacy regulators must agree on any draft decision before it becomes final under GDPR, which is a process that could stretch on for months and lead to changes in the amount of the fine. 

The fine represents slightly more than 0.1% of Amazon’s $386.1 billion in annual revenue in 2020, and, under GDPR, a company can be fined up to 4% of its global sales for the most severe infringements of the law. That means Amazon could face a maximum fine of $1.54 billion.

In December 2020, Twitter TWTR, -0.97% was fined €450,000 ($548,400) by an Irish regulator under GDPR over a bug in its Android app that caused some users’ protected tweets to be made public. At the time, a number of European authorities objected to the size of the penalty and advocated for a more severe punishment. Regulators in Austria advocated for a fine of at least $30 million, while German regulators said the fine should have been in the range of €7.3 million to €22 million.

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The news on Thursday makes Amazon just the latest Big Tech company to face intense pressure in Europe over the past week.

On Monday, France’s competition regulator announced that Google, owned by Alphabet GOOGL, +0.68% GOOG, +0.91%, would pay a $268 million fine to settle a case related to abuse of dominance in the online advertising market, as well as overhaul its global ad business model.

And on June 4, regulators in both the U.K. and EU opened formal investigations into Facebook FB, +0.13% over whether it unfairly used user data to help its classified ads platform, Marketplace, beat out the competition.

More broadly, U.S. tech giants will soon fall under the Digital Services Act and Digital Markets Act, presented by the European Commission in December 2020 and pending approval by the European Parliament and Council of Ministers. These acts aim to hold tech platforms to a high standard over the content they host, and introduce new procompetition measures for online markets.

Amazon did not immediately respond to a request for comment from MarketWatch.