In its latest move targeting a major market, the European Commission on Friday sent Amazon another request for information (RFI) regarding its compliance with the EU’s Digital Services Regulation.
The development highlights areas where European authorities are stepping up their scrutiny of the e-commerce giant, with the bloc demanding more information on Amazon’s recommendation systems, advertising transparency provisions and risk assessment measures.
A previous request for information from the Commission to Amazon, last novemberfocused on risk assessment and mitigation measures regarding the distribution of illegal products; and the protection of fundamental rights, particularly with regard to its recommendation systems.
The EU Digital Services Act The DSA requires platforms and services to comply with 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 address risks related to the sale of illegal goods. Larger marketplaces, such as Amazon, have an additional layer of algorithmic transparency and accountability obligations under the regime – and this is where the Commission’s requests for information focus.
The additional rules have applied to Amazon since the end of August last year, following its designation by the EU as a very large online platform (VLOP) in April 2023It is up to the Commission to enforce these additional obligations on VLOPs.
It remains to be seen whether the Commission’s latest request for information from Amazon will result in a formal investigation into its compliance with the DSA, but the stakes remain high for the e-commerce giant. Any confirmed breach could prove very costly, as penalties for violating the pan-European law can reach up to 6% of annual global turnover. (NB: The company’s turnover annual turnover 2023 (was $574.8 billion, which means — on paper at least — that its regulatory risk is in the multi-digit range.)
Detailing his action in a Press releaseThe Commission said it had sent Amazon a request for information on the measures it has taken to comply with the DSA rules on transparency of recommender systems and their parameters. It also said it was requesting further information on the arrangements Amazon has made to maintain an advertising repository – another legally required transparency step for large platforms.
The Commission also said it wanted more details on Amazon’s risk assessment report. The DSA requires VLOPs to proactively assess systemic risks that could arise on their platforms and take steps to mitigate issues. Platforms must also document their compliance process.
“In particular, Amazon is requested to provide detailed information on its compliance with the provisions concerning the transparency of recommender systems, the input factors, characteristics, signals, information and metadata applied to these systems and the options offered to users to refuse to be profiled for recommender systems,” 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 regarding its risk assessment report.”
The EU has given Amazon until July 26 to provide the requested information. After that date, next steps will depend on the assessment of its response. But failure to provide a satisfactory response to a request for information could itself result in a penalty.
Last year The EU has identified online marketplaces as one of a few priority issues for the application of the DSA rules for VLOPs. And it has shown itself to be attentive to this area.
At the end of last month It sent separate RFIs to competing marketplaces VLOP, Shein and Temu — shortly after designating the pair. Although, in their case, the Commission’s requests for information also raised concerns about the risks associated with illegal goods and manipulative design (including as a potential risk to child safety), and asked them for more information on how their own recommendation systems worked.
Why all the interest here? Algorithmic sorting has the power to influence the overall user experience of a platform by determining the content and/or products they see.
In short, the EU wants the DSA to decrypt these “black box” AI systems to ensure that the platforms’ commercial agendas (getting users’ attention and/or generating more sales) are not the only ones programming these automated decisions. It therefore wants the DSA to serve as a shield against the risks of societal harms induced by AI, such as platforms spreading content that is harmful to people’s mental health or recommending that consumers buy dangerous products. But achieving this goal will require enforcement.
Amazon, for its part, is not happy with the EU regime. Last year, it challenged its DSA designation as a VLOP. last fall it obtained a temporary reprieve on one element of DSA compliance for VLOPs, namely the requirement to publish an ad library. However, in MarchThe EU General Court annulled the previous decision, cancelling the partial suspension.
“Following his designation as VVery large online platform and the Court’s decision to reject Amazon’s request to suspend the obligation to do IThe ts advertising repository is publicly available“Amazon is required to comply with all of the DSA’s obligations,” the Commission wrote today. “This includes identifying and diligently assessing all systemic risks related to its service, providing an option in its recommendation systems that is not based on user profiling, and making an advertising benchmark publicly available.”
Given that Amazon has spent money on lawyers trying to explain why it should not have to comply with the DSA ad library element – and the subsequent reversal of the suspension – it is not too surprising that this is one of the areas where the Commission is now seeking more information.
The EU has been contacted to answer questions. We have also contacted Amazon for a response to the Commission’s request for information.
A company spokesperson emailed TechCrunch: “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 trusted shopping environment. We believe this is important to everyone in the retail industry, and we invest heavily in protecting our store from bad actors, illegal content, and creating a trustworthy shopping experience. We have built DSA compliance on this strong foundation.”
