The European Commission has taken another step in its efforts to address a significant marketplace. On Friday, they sent Amazon a request for information (RFI) regarding the company’s compliance with the bloc’s rulebook for digital services.
The development sheds light on the areas where EU enforcers are intensifying their examination of the e-commerce giant. The bloc is requesting additional information regarding Amazon’s recommender systems, ad transparency provisions, and risk assessment measures.
In a previous inquiry sent to Amazon last November, the Commission concentrated on evaluating potential risks and ways to address them regarding the distribution of illegal items. Additionally, they emphasized the importance of safeguarding fundamental rights, particularly in relation to Amazon’s recommender systems. The spokesperson for the spokesperson for the European Commission has confirmed that the e-commerce giant has received three Requests for Information (RFIs) in total. This comes after the Commission asked for more information in January regarding how the company is facilitating data access for researchers. 
The Digital Services Act (DSA) of the EU imposes certain governance standards on platforms and services, particularly in the realm of content moderation. Online marketplaces are legally obligated to implement measures that allow them to address the risks associated with the sale of illegal goods. Marketplaces like Amazon face increased scrutiny and responsibility when it comes to algorithmic transparency and accountability. The Commission RFIs are specifically targeting this aspect.
Since the end of August last year, Amazon has implemented additional rules due to its designation as a very large online platform (VLOP) by the EU in April 2023. The enforcement of these additional obligations on VLOPs falls under the responsibility of the Commission.
It is uncertain whether the recent Commission RFI sent to Amazon will result in a formal investigation regarding its DSA compliance. However, the consequences are significant for the e-commerce giant. Violations of the pan-EU law can result in significant financial consequences, with penalties reaching up to 6% of global annual turnover. (Note: The company’s annual revenue for 2023 reached an impressive $574.8 billion, indicating that its regulatory risk is substantial, potentially amounting to billions of dollars.)
Explaining its course of action in a press release, the Commission has reached out to Amazon with a Request for Information (RFI) regarding its efforts to adhere to DSA regulations concerning the transparency of recommender systems and their parameters. In addition, the report mentioned that further information is being requested regarding Amazon’s protocols for upholding an ad repository. This is a necessary measure for larger platforms to ensure transparency in accordance with legal requirements.
The Commission has expressed a desire for additional information regarding Amazon’s risk assessment report. It is essential for VLOPs to actively evaluate potential systemic risks on their platforms and implement measures to address these concerns. Platforms should ensure that they thoroughly document their compliance process.
The EU has requested that Amazon furnish comprehensive details regarding its adherence to the regulations pertaining to transparency in recommender systems. This includes information on the various factors, features, signals, and metadata utilized in these systems, as well as the options available to users who wish to opt out of being profiled. The company must furnish additional details about the design, development, deployment, testing, and maintenance of the online interface of Amazon Store’s Ad Library. They should also provide supporting documents pertaining to the risk assessment report.
Amazon has been given a deadline of July 26 by the EU to provide the requested information. Following that, the subsequent actions will be determined based on an evaluation of the reaction. However, if a response to an RFI is not satisfactory, it may result in a sanction being imposed.
Last year, the European Union identified online marketplaces as a key focus area for enforcing the rules of the Digital Services Act (DSA) pertaining to very large online platforms (VLOPs). And it has shown great attention to the area.
In the previous month, it reached out to competing marketplace VLOPs, Shein and Temu, by sending separate RFIs. This action was taken shortly after designating the two as potential partners. In their case, the Commission’s RFIs also expressed concern about the risks associated with illegal goods and manipulative design, including potential child safety concerns. Additionally, they requested more information about the operation of their recommender systems.
What is the reason for such a high level of curiosity in this matter? The way in which algorithmic sorting is implemented can greatly impact the overall experience of platform users. This is because it plays a crucial role in determining the content and/or products that they are exposed to.
Simply put, the EU is advocating for transparency in AI systems, urging the DSA to unveil the inner workings of these blackbox systems. The goal is to ensure that the platforms’ primary focus is not solely on capturing users’ attention or boosting sales but rather on making unbiased automated decisions. It is crucial for the DSA to play a protective role in mitigating the potential risks associated with AI-driven societal harm. These risks include platforms promoting content that can be detrimental to people’s mental well-being or encouraging the purchase of hazardous products. However, in order to achieve that objective, enforcement will be necessary.
On the other hand, Amazon is dissatisfied with the EU regime. Last year, it disputed its DSA classification as a VLOP. And in the previous autumn, it successfully obtained a temporary halt on one aspect of VLOPs’ DSA compliance—specifically, the obligation to make an ad library publicly available. Nevertheless, the EU General Court made a different ruling in March, completely reversing the previous decision and lifting the partial suspension.
According to the Commission, Amazon must now fulfill all of its obligations under the Digital Services Act, as it has been designated as a very large online platform, and the Court has denied its request to suspend the requirement of making its advertisement repository publicly accessible. It is important to thoroughly identify and evaluate any potential risks that may affect the service. Additionally, it is crucial to offer an alternative option in the recommender systems that is not solely based on user profiling. Lastly, having a publicly accessible advertisement repository is essential.
Considering Amazon’s efforts to avoid complying with the DSA ad library element, including hiring lawyers and the subsequent overturning of the stay, it’s understandable that the Commission is now seeking more information in this particular area.
Questions were directed to the EU. The Commission spokesperson has confirmed that the initial RFI sent to Amazon in November 2023 had a significant emphasis on addressing the distribution of illegal products and safeguarding fundamental rights online. Additionally, the RFI included inquiries regarding Amazon’s recommender systems.
In January 2024, another RFI was issued, which specifically addressed the steps taken by Amazon to ensure compliance with data access for eligible researchers, according to the spokesperson. The latest RFI places a significant emphasis on the steps taken to fulfill DSA obligations regarding the transparency of recommender systems and their parameters, along with the requirements for maintaining an ad repository.
“We are currently exploring various areas,” the spokesperson mentioned. Indeed, it is accurate to state that the current RFI aligns with the Court’s ruling to deny Amazon’s plea to withhold its advertisement database from public access.
We also contacted Amazon to inquire about their response to the Commission’s RFI.
The company spokesperson sent an email to Eltrys, stating that they are currently reviewing the request and collaborating closely with the European Commission. Amazon is aligned with the European Commission’s objective of establishing a secure, reliable, and reputable shopping environment. We believe that it is crucial for all individuals involved in the retail industry to prioritize the protection of their stores against malicious individuals and illegal content and to establish a reliable shopping experience. We have continued to strengthen our foundation for DSA compliance.
