EU asks Amazon for information on DSA compliance

European Union officials have asked Amazon.com Inc. for information about the company’s compliance with the Digital Single Market Act, a technology industry regulation the bloc passed in 2022.

The European Commission, the EU’s executive arm, revealed the move today. The request marks the third time regulators in the bloc have asked Amazon for information related to the DSA. If the EU identifies a gap in the company’s compliance efforts, it could open a formal investigation into the matter and potentially impose fines.

The European Parliament passed the Digital Services Act, or DSA, in mid-2022. The law requires internet platform operators to address illegal content, disinformation and other threats on their services. It also mandates that e-commerce companies like Amazon ensure the safety of products on their marketplaces.

The second set of requirements in the act applies only to so-called VLOPs, or very large online platforms. These are services with at least 45 million monthly active users. In March last year, the European Commission listed Amazon’s marketplace as one of the platforms to which VLOP rules apply.

The information request that the EU sent to the company today focuses on two main elements. The first is the recommendation algorithms that Amazon uses to generate shopping suggestions, and the second is its advertising system.

The DSA includes a provision that says tech companies must be transparent about how their recommendation algorithms work. To assess whether Amazon is meeting that requirement, officials asked it to provide information about its internal systems. The company must detail the “inputs, features, signals, information, and metadata” it uses to make recommendations.

Recommendation algorithms on platforms with more than 45 million monthly active users must meet additional requirements. In particular, consumers must be able to opt out of offers generated based on their personal data. In their information request, EU officials asked Amazon to describe in detail its compliance with this requirement.

The second target of the request is the company’s advertising system. Under the DSA, Amazon must maintain a library of ads that online retailers display on its e-commerce marketplace. The EU asked the company to provide information on the “development, implementation, testing and maintenance” of the ad library interface, as well as an assessment of potential risks to users.

Amazon must submit the requested documents by July 26. In today’s announcement about the information request, the European Commission said a formal DSA investigation could follow. Violations of the law could result in fines of up to 6% of the company’s annual worldwide revenue.

Amazon said in a statement that “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.”

In January, the European Commission sent the company another request for information about its transparency practices. Last November, officials asked Amazon to detail the steps it takes to block the spread of illegal products on its e-commerce marketplace.

Photo: Amazon