In its latest move targeting a key market, the European Commission sent Amazon another request for information (RFI) on Friday regarding its compliance with EU digital services rules.
The development highlights areas where EU law enforcement officials are stepping up their scrutiny of the e-commerce giant, with the bloc demanding more information about Amazon’s recommendation systems, advertising transparency provisions and risk assessment measures.
Last November, previous requests from the Commission to Amazon for background information focused on risk assessments and mitigation in relation to the dissemination of illegal products; and the protection of fundamental rights, including in relation to its recommendation systems.
The EU Digital Services Regulation requires platforms and services to adhere to a range of governance standards, including in areas such as content moderation. In the case of online marketplaces, the law also requires them to implement measures to enable them to take action to address risks surrounding the sale of illegal goods. While larger marketplaces, such as Amazon, have an additional layer of algorithmic transparency and accountability obligations under the regulation – and this is where the Commission’s information requests are focused.
The additional rules have been in place for Amazon since the end of August last year, after it was designated by the EU as a very large online platform (VLOP) in April 2023. It is the Commission’s task to impose these additional obligations on VLOPs.
While it remains unclear whether the European Commission’s latest request for information to Amazon will lead to a formal investigation into its compliance with the Digital Services Act, the stakes remain high for the e-commerce giant. Any confirmed violations could be extremely costly, with penalties for breaching the law across the EU reaching up to 6% of annual global sales. (Note: The company Annual Revenue 2023 (The government bonds were worth $574.8 billion, which means—at least on paper—their regulatory risk runs into the billions of dollars.)
Detail of her work in press releaseThe Commission said it had sent Amazon a request for information on the measures it has taken to comply with the Digital Data Services Act’s rules on transparency and standards for recommender systems. It also said it was seeking more information on Amazon’s provisions to maintain an advertising repository — another legally mandated transparency step for larger platforms.
The commission also said it wanted more details on Amazon’s risk assessment report. The Digital Services Standards Act requires digital services companies to proactively assess systemic risks that may arise on their platforms and take steps to mitigate them. Platforms also need to document their compliance process.
“In particular, Amazon is requested to provide detailed information on its compliance with the provisions relating to the transparency of recommendation systems, the input factors, features, signals, information and metadata applied to these systems and the options provided to users to opt out of being included in recommendation system profiles,” the EU wrote. “The company must also provide further information on the design, development, deployment, testing and maintenance of the online interface of the Amazon Store Advertising Library and supporting documentation in relation to its risk assessment report.”
The EU has given Amazon until July 26 to provide the requested information. Any further steps will then depend on its assessment of its response. But failure to respond satisfactorily to the request for information could itself result in sanctions.
Last year, the EU identified online marketplaces as one of the priority areas for the implementation of the Digital Services Act rules in relation to VLOPs. The EU has shown great interest in this area.
Late last month, the Commission sent separate information requests to market rivals Sheen and Timo – shortly after their designation. Although the Commission’s information requests in their cases also raised concerns about the risk of illegal goods and manipulative design (including as a potential risk to children’s safety), as well as asking them for more information about the operation of their recommendation systems.
But why all the attention? Algorithmic sorting has the potential to impact the entire experience of platform users by determining the content and/or products they see. In short, the EU wants the DSA to open up such hidden intelligent systems to ensure that commercial agendas – to grab attention and/or increase sales – are not the only thing driving these automated decisions as a tool to protect against societal harms caused by AI, such as platforms pushing content that is harmful to people’s mental health or recommending dangerous products to shoppers.
Amazon is unhappy with the system. Last year, it challenged its classification as a limited liability company. And last fall, it won a temporary stay on one element of its compliance with the customer service law—a requirement to publish an advertising library.
However, in March, the General Court of the European Union overturned the previous decision, invalidating the partial suspension.
After being appointed as FifthVery large platform on the internet The court’s decision to reject Amazon’s request to suspend the obligation to conduct Its ads warehouse is available to the public“Amazon must comply with the full range of obligations under the Digital Streaming Services Act,” the committee wrote. “This includes carefully identifying and assessing all systemic risks related to its service, providing a choice in its recommendation systems that is not based on user profiling, and providing a publicly available advertising repository.”
Given that Amazon has spent money on lawyers trying to prove why it shouldn’t comply with the DSA’s advertising library element — and the subsequent suspension — it’s no surprise that this is one area where the commission is now seeking more information.
The European Union has been contacted regarding some questions. We have also contacted Amazon for a response to the Commission’s request for information.
A company spokesperson emailed TechCrunch with this statement: “We are reviewing this request and working closely with the European Commission. Amazon shares the European Commission’s goal of creating a safe, predictable, and trustworthy shopping environment. We believe this is important for all retail industry participants, and we invest heavily in protecting our store from bad actors and illegal content, and in creating a trustworthy shopping experience. We have built on this strong foundation to comply with the DSA.”