Amazon hit by record EU data privacy fine

29 Inc shares hit their lowest level for months as investors deserted the online giant after a disappointing earnings upgrade overnight and a huge EU fine today.

Luxembourg regulators {CNPD) fined Jeff Bezos’s old firm EUR746mln for breaches of EU General Data Protection Rules, which the company said was without merit and that it intends to defend vigorously.

It was the largest fine ever imposed by the EU for a breach of GDPR and dwarfed the previous record EUR50mln fine handed to Google.

In a statement, Amazon said the fine was completely out of proportion, though it is in line with GDPR guidelines that say breaches can result in a fine of up to 4% of an offender’s global turnover.

“Maintaining the security of our customers’ information and their trust are top priorities. There has been no data breach, and no customer data has been exposed to any third party. These facts are undisputed,” Amazon said.

“We strongly disagree with the CNPD’s ruling, and we intend to appeal,” it added.

“The decision relating to how we show customers relevant advertising relies on subjective and untested interpretations of European privacy law, and the proposed fine is entirely out of proportion with even that interpretation”.

Earlier all attention had been on the results update that had missed forecasts.

Sales in the quarter to 30 June jumped 27% to US$113bn compared to the same period in 2020, with net income up 48% to US$7.8bn.

However, Wall Street had forecast sales of US$115bn and growth slowed down from a 44% climb in the first quarter.

The deceleration is expected to continue, as the online giant guided for a 10-16% sales rise in the third quarter to US$106-112bn, with operating income down to US$2.5-6bn from US$6.2bn last year, including US$1bn of COVID-19 related costs.

Shares fell 7% at the opening bell but later recovered to a 3% fall at US$3,344.


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