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Amazon must now share details about the advertising it serves in the European Union through a public library.
The retail giant is being forced to provide greater transparency over its advertising activities under the EU’s Digital Services Act (DSA) after losing an appeal to the Court of Justice of the EU (CJEU) for a temporary suspension.
Why we care. The creation of an Amazon ad library will provide marketers with valuable insights into how the retail giant delivers and profits from campaigns. This allows them to more effectively optimize their ads for better performance on the platform.
What is the Digital Markets Act (DMA)? The D.M.A is a piece of legislation introduced in 2022 designed to ensure that major online platforms, called ‘gatekeepers’, behave in a fair manner online to create a fair and open environment for online businesses. Only six gatekeepers have obligations under the DMA:
- Alphabet (Google’s parent company).
- Apple.
- Meta.
- Amazon.
- Microsoft.
- ByteDans.
All six companies, none of which are based in the EU, had to ensure they were fully compliant with DMA obligations and submit compliance reports by March 7.
Sanctions for violation of the DMA. The consequences of not complying with the DMA include:
- Fines: Up to 10% of the company’s total annual worldwide turnover, or up to 20% for repeat violations.
- Compulsions: Maximum 5% of a company’s average daily turnover.
- Remedies: These can be behavioral and structural remedies, such as the divestiture of (parts of) a company.
Amazon challenges DSA requirements. Amazon challenged the requirement to follow the ad transparency rule in the DSA last September. As a result, the General Court of the EU has temporarily halted the ad library until the issue is resolved.
Reversal of the decision. This week, the CJEU overturned the decision to temporarily suspend Amazon’s requirement to comply with its advertising transparency provision. The court ruled that Amazon must now comply with publishing an advertising library. While the court acknowledged Amazon’s compliance concerns, they emphasized the importance of upholding the intentions of EU lawmakers in passing the law. Delaying compliance could undermine the goals of the DSA, potentially for several years.
What the CJEU says. The CJEU said in a statement:
- “Suspension would lead to a delay, possibly of several years, in the full achievement of the objectives of the Internal Market for Digital Services Regulation and therefore potentially enable an online environment that threatens fundamental rights, while the EU -legislator was of the opinion that very large platforms play an important role in that environment. “T
- “In this case, the interests defended by the EU legislator prevail over Amazon’s material interests, with the result that the balance of interests weighs in favor of rejecting the suspension request.”
What Amazon says. This is what an Amazon spokesperson said Technical crunch:
- “We are disappointed with this decision and argue that Amazon does not meet the definition of a ‘Very Large Online Platform’ (VLOP) under the DSA and should not be classified as such.”
- “Customer safety is a top priority for us at Amazon, and we continue to work closely with the EC regarding our obligations under the DSA.”
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Deep dive. Read the CJEU statement on this decision complete for more information.
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