Data and security

Spain’s antitrust watchdog has fined Amazon and Apple €194mn for colluding to limit the sale of Apple products by third-party sellers on the huge online retail platform, which “drastically” reduced competition.  

The fine is the result of a case opened by the regulator, known as the CNMC, in July 2021, that sought to prove that the pair unfairly colluded to “reduce competition in the internet retail market for electronic products.”

Clearly, the CNMC found the proof it was looking for. “Over 90% of resellers who used Amazon’s website in Spain to sell Apple products were excluded from Spain’s main online market,” it said.

The regulator also pointed out that Amazon reduced the capacity of retailers in other EU countries to access Spanish customers, and restricted the advertising Apple’s competitors were allowed to place on its website when users searched for Apple products.

As a result, Amazon has been fined €50.5mn, while Apple has been fined €143.6mn. The companies now have two months to appeal the decision, which the pair more than likely will. 

“We reject the suggestion made by CNMC that Amazon benefits from excluding sellers from its marketplace, as our business model hinges precisely on the success of the companies selling through Amazon,” Amazon said in a statement to Reuters.  

Apple said the agreement with Amazon, made back in 2018, was designed to limit the number of counterfeits sold online. However, small resellers complained that this threatened their businesses, as the requirements for becoming an authorised reseller include hitting sales volumes of millions of dollars.

Three countries – Germany, Italy, and Spain – opened antitrust investigations into the matter. Germany never dropped the case, but Italy fined Apple and Amazon more than €200mn for restricting competition in the sale of Apple and Beats products but subsequently dropped the charges.

Published July 19, 2023 – 1: 15 pm UTC

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Amazon, Jeff Bezos’ online retail behemoth that registered over 300 million active users and raked over $500bn last year, says it doesn’t fit the EU’s definition of a Very Large Online Platform (VLOP). 

The Silicon Valley firm is so adamant it isn’t a VLOP, it is suing the EU over the matter, making it the first (and probably not the last) US company to challenge the bloc’s new digital content rules.  

Amazon was among the first of 18 companies to be designated a VLOP in late April under the EU’s new Digital Services Act (DSA), designed to curb hate speech and disinformation online. A VLOP designation requires companies to do more to tackle illegal online content, undertake risk management, conduct external and independent auditing, and share data with authorities and researchers. 

All platforms that reach at least 45 million monthly active users are required to comply with the full obligations of the DSA, which comes into force on August 25. Facebook, Twitter, Apple’s App Store, Google Play, YouTube, and German retailer Zalando are all included, among others.  

According to Amazon, the DSA was designed to address systemic risks posed by very large companies that distribute speech and information and rely on advertising as their primary revenue. “Amazon doesn’t fit this description of a ‘very large online platform’ under the DSA and should not be designated as such,” it said. The retail giant said its addition to the EU’s naughty list means it would be “unfairly singled out and forced to meet onerous administrative obligations that do not benefit EU consumers.” 

Last month, Germany’s Zalando, Europe’s largest online retailer, became the first company to start a lawsuit over the designation. The company claimed its active European user base figures aren’t substantial enough for it to be considered a VLOP. It has long been expected that Silicon Valley groups would also challenge the rules. 

“The scope of the DSA is very clear and is defined to cover all platforms that expose their users to content, including the sale of products or services, which can be illegal,” the European Commission said in a statement reported by the Financial Times. “For marketplaces as for social networks, very wide user reach increases the risks and the platforms’ responsibilities to address them.”

Amazon has opened the suit at the Luxembourg-based General Court, Europe’s second highest. The Commission said it is “ready to defend its position”.

Meta’s new social networking app and Twitter rival, Threads, will not be launched in the EU “at this point,” according to a spokesperson from Ireland’s Data Protection Commission (DPC).

The DPC has not blocked Threads from EU app stores. Instead, Meta is postponing its launch of the platform in the bloc to avoid getting into trouble with regualtors.   

The new Threads platform will pull sensitive data from Instagram, including behavioural and advertising information, which risks breaching EU privacy laws.  

Meta has repeatedly clashed with EU regulators over the way it handles user data. Most recently, it was slapped with a record-breaking €1.2bn fine for breaching the GDPR. The majority have been delivered by the DPC in Ireland, where Meta has its European headquarters. The regulator dished out four fines to the tech giant in 2022 alone.

While the EU lawmakers may have scared off Meta for now, it’s uncertain at this time whether the tech giant will rejig its policy to comply with the bloc’s strict data laws.  Whether Threads will come to the EU anytime soon is anyone’s guess, but a spokesperson for Meta told Bloomberg that it was preparing to roll out the new app in over 100 countries.

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Threads, which has been designed to take on Meta’s rival Twitter, is expected to go live on app stores in the US and the UK on Thursday. 

The debut of Threads comes during a week of sweeping changes at Twitter. Owner Elon Musk announced that users of the platform would be limited to viewing just 600 tweets a day, to fight what he called “extreme levels of data scraping.” 

Twitter also announced that TweetDeck, which is used by millions of companies to manage and track different feeds, will become limited to paid subscribers only. 

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Negotiators representing the European Parliament and EU countries struck a deal this week on a new set of rules governing how individuals and businesses access and share data in the bloc. 

The Data Act, proposed by the European Commission last year, aims to give users more control over the data generated from internet-connected devices and protect them against illegal data transfers.  

The new legislation will empower consumers and companies by giving them a say on what can be done with the data generated by their connected products, said the Commission. This includes letting users access the data generated by smart objects, machines, and devices, and share it with outside parties if they so choose.

The EU’s industry chief Thierry Breton called the agreement a “milestone in reshaping the digital space.”

Another deal! 👍👍

⁰Tonight’s agreement on the #DataAct is a milestone in reshaping the digital space.

Thanks to the swift work of the EP @delcastillop & the 🇸🇪 Council Presidency, we are on the way of a thriving 🇪🇺 data economy that is innovative & open — on our conditions. pic.twitter.com/vTWUU8xTx9

— Thierry Breton (@ThierryBreton) June 27, 2023

Let the data flow 

Back in the day, when you bought a product you owned it, and that was that. But internet-connected devices have muddied the waters somewhat. As a Commision spokesperson noted last year, “Data has made it more difficult, because, actually, who’s in control of the data you generate with connected objects?” 

Everything from phones and cars to windmills and coffee machines gather data. Mostly, this data is accessible only to the manufacturer (think, big tech companies) and not to the user.  

The Data Act looks to change that. “Consumers will have the right to access all of this data, free of charge and in real-time,” said the EU’s digital chief Margrethe Vestager, when the act was unveiled last year.

Announcing the deal on Tuesday, EU politicians emphasised the need for harmonised rules.

“Once the data act enters into force, it will unlock the economic and societal potential of data and technologies and contribute to an internal market for data,” said Erik Slottner, public administration minister for Sweden, which currently holds the presidency of the Council of the EU.

“It will enhance the single market, allowing data to flow freely within the EU and across sectors for the benefit of our citizens and businesses,” he added.

The Data Act has been hailed as the final and, potentially, most important part of the EU’s digital transformation.

It’s one of five pieces of legislation that aim to overhaul the bloc’s digital rules alongside the Digital Markets Act, Digital Services Act, Artificial Intelligence Act, and the Data Governance Act.

Not everyone’s happy

While individuals and businesses are set to benefit from the new rules, manufacturers aren’t so peachy. The CEOs of several large European firms and trade organisation DigitalEurope wrote to the Commission last month to express their concerns over the text. 

They are afraid that being forced to share data with other companies, including those outside the bloc, could undermine European leadership and innovation and leave them vulnerable to cybersecurity threats and copyright infringements.   

Siemens Healthineers, a German manufacturer of medical equipment, said it considers the Data Act to be “more of a threat than an opportunity.” Siemens said it is worried that the law could expose commercially sensitive data. 

The deal, DigitalEurope said on Wednesday, “fails to achieve the necessary balance”. 

Following the provisional agreement reached this week, the Data Act will now wind its way through the legal system.  

Companies will then have to abide by its rules roughly 20 months later, meaning it’s likely to be a couple of years before the Data Act’s measures come into effect.