Amazon must now share details about the ads it serves in the European Union through a public library.
The retail giant is being forced to provide more transparency about its advertising operations under the EU’s Digital Services Act (DSA) after losing an appeal to the Court of Justice of the EU (CJEU) for a temporary stay .
Why we care. Building an Amazon ad library will provide marketers with valuable insight into how the retail giant displays and benefits campaigns. This will allow them to optimize their ads more effectively for better performance on the platform.
What is the Digital Markets Act (DMA)? The DMA is a law introduced in 2022 designed to ensure that large online platforms, called “gatekeepers”, behave fairly online to create a fair and open environment for online businesses. Only six guardians have obligations under the DMA:
Alphabet (parent company of Google). apple Goal. Amazon. Microsoft. ByteDance.
The six companies, none of which are based in the EU, had to ensure they were fully compliant with the DMA obligations and had to submit compliance reports by March 7.
Penalties for violation of DMA. The consequences of breaching the DMA include:
Fines: up to 10% of the company’s total annual turnover worldwide, or up to 20% for repeated violations. Periodic penalties: up to 5% of a company’s average daily turnover. Remedies: May include behavioral and structural remedies, such as divestment of (parts of) a company.
Amazon counters DSA requirements. Amazon challenged the requirement to follow the ad transparency rule in the DSA in September last year. As a result, the General Court of the EU temporarily halted the ad library until the issue was resolved.
Revocation of the decision. This week, the CJEU overturned a decision to temporarily suspend Amazon’s requirement to comply with the ad transparency provision. The court ruled that Amazon must now adhere to publishing an ad library. While the court acknowledged Amazon’s compliance concerns, they emphasized the importance of upholding the intentions of EU lawmakers when 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, potentially for several years, in the full achievement of the Digital Single Market Regulation’s objectives and could therefore allow an online environment that threatens fundamental rights to persist or develop, while the EU legislator considered that very large platforms play an important role in this environment.” T “The interests defended by the EU legislator prevail, in the present case, over the material interests of Amazon, so that the balance of interests weighs in favor of rejecting the request for suspension”.
What Amazon says. An Amazon spokesperson said Tech Crunch:
“We are disappointed with this decision and maintain that Amazon does not fit the description of a ‘Very Large Online Platform’ (VLOP) under the DSA and should not be designated as such.” “Customer safety is a 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 statement of the CJEU in his decision in full for more information.
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