In its latest step, targeting a significant marketplace, the European Commission sent Amazon another request for information (RFI) on Friday about its compliance with the bloc’s rulebook for digital services.
Increased Scrutiny on Amazon
The development highlights areas where EU enforcers are dialing up their scrutiny of the e-commerce giant. The bloc is asking for more information about Amazon’s recommender systems, ads transparency provisions, and risk assessment measures.
Previous Amazon Requests for Information
An earlier Commission RFI to Amazon last November focused on risk assessments and mitigations around disseminating illegal products and protecting fundamental rights, including its recommender systems. A Commission spokesperson confirmed the e-commerce giant had received three RFIs in all — following a January ask for more info on how it’s providing data access for researchers.
Digital Services Act Requirements
The EU’s Digital Services Act (DSA) requires platforms and services to abide by governance standards, including content moderation. The law also requires online marketplaces to implement measures to tackle risks around the sale of illegal goods. More significant marketplaces, such as Amazon, have an additional layer of algorithmic transparency and accountability obligations under the regime—and this is where the Commission RFIs are focused.
VLOP Designation and Additional Rules
The additional rules have applied to Amazon since the end of August last year, following its designation by the EU as a substantial online platform (VLOP) in April 2023. The Commission enforces these extra obligations on VLOPs.
Potential Consequences of Non-compliance
While it remains to be seen if the latest Commission RFI to Amazon will lead to a formal investigation of its DSA compliance, the stakes remain high for the e-commerce giant. Any confirmed violations could be costly as penalties for breaching the pan-EU law can reach up to 6% of global annual turnover. (NB: The company’s full-year revenue for 2023 was $574.8 billion, meaning — on paper at least — its regulatory risk runs into double-figure billions.)
Commission’s Press Release and Amazon’s Response
In a press release, the Commission detailed its action and said it has sent Amazon an RFI regarding measures it has taken to comply with DSA rules regarding the transparency of recommender systems and their parameters. It also said it’s asking for more information about Amazon’s provisions for maintaining an ad repository—another legally mandated transparency step for larger platforms.
Risk Assessment Report
The Commission also wants more detail about Amazon’s risk assessment report. The DSA requires VLOPs to both proactively assess systemic risks that might arise on their platforms and take steps to mitigate issues. Platforms also need to document their compliance process.
Specific Requests from the EU
“In particular, Amazon is asked to provide detailed information on its compliance with the provisions concerning transparency of the recommender systems, the input factors, features, signals, information, and metadata applied for such systems, and options offered to users to opt out of being profiled for the recommender systems,” the EU wrote. “The company also has to provide more information on the design, development, deployment, testing, and maintenance of the online interface of Amazon Store’s Ad Library and supporting documents regarding its risk assessment report.”
Deadline for Compliance
The EU has given Amazon until July 26 to provide the requested info. After that, any next steps will depend on its assessment of its response. However, failure to respond satisfactorily to an RFI could trigger a sanction.
EU’s Focus on Online Marketplaces
Last year, the EU named online marketplaces one of a handful of priority issues for enforcing the DSA’s rules for VLOPs. It has been attentive to the area.
RFIs to Rivals Shein and Temu
Late last month, soon after designating the pair, the Commission sent separate RFIs to rival marketplace VLOPs Shein and Temu. In their case, the Commission’s RFIs also raised concerns about illegal goods risks and manipulative design (including a potential child safety risk). They asked them for more information about the operation of their recommender systems.
Interest in Algorithmic Sorting
Why is there so much interest here? Algorithmic sorting can influence platform users’ experience by determining the content or products they see.
EU’s Goal for the DSA
In a nutshell, the EU wants the DSA to crack open such black-box AI systems to ensure that platforms’ commercial agendas — to grab users’ attention and drive more sales — aren’t the only thing programming these automated decisions. It, therefore, wants the DSA to act as a shield against the risks of AI-driven societal harms, such as platforms pushing content that’s harmful to people’s mental health or recommending shoppers buy dangerous products. However, achieving that goal will require enforcement.
Amazon’s Challenge to the EU Regime
Amazon, meanwhile, is unhappy about the EU regime. Last year, it challenged its DSA designation as a VLOP. Last fall, it won an interim stay on one element of VLOPs’ DSA compliance — the requirement to publish an ads library. However, in March, the EU General Court reversed the earlier decision, overturning the partial suspension.
Full Compliance Required
“Following its designation as a Very Large Online Platform and the Court’s decision to reject Amazon’s request to suspend the obligation to make its advertisement repository publicly available, Amazon is required to comply with the full set of DSA obligations,” the Commission wrote today. “This includes diligently identifying and assessing all systemic risks relevant to its service, providing an option in their recommender systems that is not based on user profiling, and having an advertisement repository publicly available.”
Commission Seeks More Information
Given Amazon’s spending money on lawyers to try to argue why it shouldn’t have to comply with the DSA ads library element—and the subsequent overturning of the stay—it’s not too surprising that this is one of the areas where the Commission is seeking more information now.
Commission and Amazon’s Statements
The EU was contacted with questions. A Commission spokesperson confirmed that the first RFI to Amazon, from November 2023, had “a strong focus on the dissemination of illegal products and the protection of fundamental rights online” and asked questions about its recommender systems.
A second RFI, in January 2024, focused on measures Amazon has taken to comply with data access for eligible researchers, per the spokesperson. They said the latest RFI is strongly focused on measures taken to meet DSA obligations related to the transparency of recommender systems and their parameters and to the provisions on maintaining an ad repository.
These are different areas we are looking into,” the spokesperson added. “You are right to say that today’s RFI also follows the Court’s decision to reject Amazon’s request to suspend the obligation to publicly make its advertisement repository available.
Amazon’s Response to the Commission’s RFI
We also contacted Amazon to get a response to the Commission’s RFI.
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 think this is important for all participants in the retail industry, and we invest significantly in protecting our store from bad actors and illegal content and in creating a trustworthy shopping experience. We have built on this strong foundation for DSA compliance.
