Amazon Attempts to Circumvent New EU Data Privacy Laws
The European Union (“EU”) is in the process of rolling out new data privacy laws that target social media and tech giants, like Amazon, TikTok, Facebook, and Google, among others.
The Digital Services Act Package, made up of the Digital Services Act (“DSA”) and the Digital Markets Act (“DMA”), seeks to make the internet safer for European users by protecting user data. The DSA regulates the conduct of social media companies, internet marketplaces, and other content-sharing platforms. The DMA governs the behavior of online platforms that play a part in transactions and interactions between consumers and businesses.
Amazon, along with 18 other tech platforms, have been classified as “Very Large Online Platforms” (“VLOPs”), under the DSA, thus subjecting them to the Act’s most stringent rules. VLOPs like Amazon are required to be extremely transparent regarding the use of algorithms and artificial intelligence, all in the name of increased accountability online.
Failure to comply with regulations could have a big impact on VLOPs. Companies that find themselves out of compliance could face a fine of 6% of global revenue. Continued failure to comply could result in a company being banned from operating in Europe. With stakes this high, it comes as no surprise that companies are turning to the courts for a solution. During the summer of 2023, Amazon challenged its classification as a VLOP under the DSA, claiming that it did not qualify because the majority of the corporation’s revenue does not come from advertisements and because Amazon does not disseminate information like a social media platform.
Earlier this week, the European Union General Court ruled partially in favor of Amazon, determining that Amazon did not have to comply with the DSA’s ad library regulation which would require the company to publish its ad information. Amazon had argued that compliance would jeopardize the confidentiality of its advertising activities and could cause severe financial harm not only to Amazon itself but to its advertisers as well. Amazon additionally asked to be exempt from the DSA’s ban on special category profiling for targeted advertisements, however, the EU General Court refused to grant Amazon exemption. The rule prevents Amazon and other VLOPs from issuing ads on their platforms that are targeted to users based on deeply personal data categories like sexual orientation, political affiliation, or ethnicity.
That being said, Amazon may not be entirely off the hook. Despite the EU General Court’s ruling that it does not have to comply with the ad library rule, should Amazon’s overall challenge to its status as a VLOP fail, Amazon will again be required to publish an ad library under the DSA requirements.
Despite the DSA only having authority in the European Union, American social media and Big Tech users may still feel the effects of the Act. In the wake of the EU’s 2016 General Data Protection Regulation (GDPR), some companies like Microsoft decided to implement changes for both European and American users.
As the EU begins to enforce these new stringent data privacy requirements on companies based both in and outside of the European Union, social media could begin to look very different for European and American users alike.
Article Written by Mackenzie Walter
Sources:
https://www.reuters.com/technology/big-tech-braces-roll-out-eus-digital-services-act-2023-08-24/
https://www.washingtonpost.com/technology/2023/08/30/eu-digital-services-act-faq/
https://digital-strategy.ec.europa.eu/en/policies/digital-services-act-package
https://www.nytimes.com/2023/09/27/technology/disinformation-law-european-union.html
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