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finance & economyJuly 31, 2021

EU regulators fine Amazon $886 million for data violations


European regulators have fined Amazon 746 million euros ($886 million) for data protection violations. Amazon said in a regulatory filing on Friday that the Luxembourg National Commission for Data Protection issued a decision against the company earlier this month, claiming that its processing of personal data did not comply with the European Union general data protection regulation. Amazon said that it believes the decision is without merit and that it will defend itself vigorously.

Amazon has come under scrutiny by the EU before. In November regulators filed antitrust charges against the company, accusing Amazon of using its access to data from companies that sell products on its platform to gain an unfair advantage over them.

While the US initially criticised the EU for targeting American companies, it has more recently started taking a tougher line on big tech as well, suing Google last year for abusing its dominance in online search and advertising.

In May a court annulled a ruling by the European Commission that a tax deal between Amazon and Luxembourg’s government amounted to illegal state support. It was the latest setback to European Union efforts to tackle corporate tax avoidance.

Wall Street falls: Wall Street’s main indexes fell on Friday following a glum quarterly earnings report from Amazon.com, while data showing a strong rise in June consumer spending reinforced optimism about a steady economic rebound.

Amazon.com sank 6.9%, tracking its worst day since March 2020, after the company said sales growth would slow in the next few quarters as customers ventured more outside the home.

Shares of other technology behemoths, including Apple Inc , Google-parent Alphabet Inc, and Facebook Inc , which benefited last year from people staying indoors due to the COVID-19 curbs, fell between 0.6% and 1.8%.

The S&P real estate index, generally considered a defensive play, hit an all-time intra-day high.

“Expectations across the board were quite high for corporate earnings and the reason we are seeing some of the shares drop despite positive results is because people expect exponential growth, which, to be honest, is too high to expect,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab.

By 12:06pm, the Dow Jones Industrial Average was down 0.39%, the S&P 500 was down 0.53% and the Nasdaq Composite was down 0.68%.

Hopes of a steady post-pandemic rebound in the US economy have put the benchmark index on course for its sixth straight monthly gain, but the rapid spread of the Delta variant and rising inflation have kept sentiment in check.

Data on Friday showed US consumer spending rose more than expected in June, although annual inflation accelerated further above the Federal Reserve’s 2% target.

Economically-sensitive stocks including industrials , energy and financials fell, but for the week, the so-called value stocks were set to outperform growth-linked stocks such as technology.

gulftoday