🔍 EU Intensifies Scrutiny on Amazon
The European Commission has sent Amazon another request for information (RFI) regarding its compliance with the Digital Services Act (DSA). The latest RFI, sent on July 5, 2024, focuses on Amazon's recommender systems, ad transparency provisions, and risk assessment measures. Previously, the EU sent RFIs in November 2023 and January 2024, addressing issues like illegal products and data access for researchers. The DSA, effective since August 2023 for Amazon, demands transparency and accountability in content moderation and illegal goods prevention.
🛒 Amazon's Algorithm Transparency
Amazon must reveal details about its recommender systems, including input factors, features, signals, and metadata. The company is also required to provide user options to opt out of profiling. The EU's interest in these algorithms stems from their power to shape user experiences by prioritizing certain content and products. By enforcing transparency, the EU aims to prevent harmful societal impacts like mental health issues and the promotion of dangerous products.
💼 Ad Repository and Risk Assessment
The RFI also demands information on Amazon's ad repository, which must be publicly accessible. The EU General Court recently reversed a decision allowing Amazon to avoid this obligation. Additionally, the Commission seeks details on Amazon's risk assessment report, which should document systemic risks and compliance measures. Failure to adequately respond could result in sanctions. Amazon has until July 26 to comply with the RFI.
⚖️ Potential Consequences for Amazon
Non-compliance with the DSA could be costly for Amazon. Penalties for violations can reach up to 6% of global annual turnover, which, based on Amazon's 2023 revenue of $574.8B, could amount to billions. Amazon's spokesperson stated that the company is reviewing the EU's request and emphasizes its commitment to a safe and trustworthy shopping environment. The outcome of this scrutiny will be crucial for Amazon as it navigates the stringent regulations of the European marketplace.
What do you think about the EU's scrutiny on Amazon?
