Amazon hit by record fine, slowing sales
Amazon suffered a double whammy on Friday, with its shares slumping 7 percent on disappointing revenues and the eCommerce giant revealing it had been hit by a record fine from the European Union.
In its quarterly report, Amazon disclosed a fine of €746m ($888m) had been imposed two weeks earlier by the Luxembourg National Commission for Data Protection, which had claimed the company’s processing of personal data did not comply with the EU General Data Protection Regulation. Amazon said it believed the decision to be without merit and it would defend itself vigorously.
The investigation was prompted by a 2018 complaint from a French privacy rights group. The fine far exceeds the previous record of €50m levied on Google by France’s data protection regulator.
Amazon shares fell as much as 8 percent after it reported sales below analyst estimates for the first time since 2018. As Dave Lee in San Francisco reports, Amazon blamed weaker sales on customers increasingly “doing things besides shopping” as lockdown restrictions eased around the world.
The earnings were the last under founder Jeff Bezos, who handed over CEO duties this month to Andy Jassy, formerly chief executive of its cloud division AWS. Those services continued to perform strongly with a second straight quarter of above 30 percent growth. So did Amazon’s “other” business, which primarily consists of its nascent advertising efforts. Revenues there surged 88 percent to $7.9bn,
Amazon’s overall revenues increased 27 percent from last year to $113bn, falling short of forecasts for about $115bn, while profits rose 50 percent to $7.8bn, although Amazon predicted they would fall in the current quarter.
