Amazon hit by massive $1.2 billion fine

Amazon suffered a double whammy on Friday, with its shares slumping 7 per cent 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 ($1.2b) 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 per cent 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 per cent growth. So did Amazon’s “other” business, which primarily consists of its nascent advertising efforts. Revenues there surged 88 per cent to $7.9bn,

Amazon’s overall revenues increased 27 per cent from last year to $113bn, falling short of forecasts for about $115bn, while profits rose 50 per cent to $7.8bn, although Amazon predicted they would fall in the current quarter.

The Internet of (Five) Things

1. US regulators to scrutinise Chinese listings

China-based companies will have to disclose more about their structure and contacts with the Chinese government before listing in the US, the Securities and Exchange Commission said on Friday. The move follows the controversy surrounding Chinese ride-hailing group Didi Chuxing, which was accused of violating data laws in China soon after its US IPO. Here’s our explainer on the regulatory assault in China.

2. Chinese tech stocks sink in July

It’s the last trading day of July and Chinese tech stocks listed in the US are closing out their worst month since the global financial crisis, following the regulatory crackdown by Beijing. The Nasdaq Golden Dragon China index has fallen 22 per cent in July, while shares in Tencent and Alibaba have dropped about 16 per cent and 10 per cent respectively.

3. Ransomware rages on

President Biden signed an executive order on Wednesday aimed at raising online security standards and preventing ransomware attacks on America’s critical infrastructure. Here’s our chart-driven analysis of the rise of ransomware.

4. Niel tries to take Iliad private

Billionaire entrepreneur Xavier Niel has launched a tender offer to take private Iliad, the French telecoms company he founded 22 years ago, in the latest example of buyers taking advantage of the low valuations of listed European telecoms companies.

5. Black Widow strikes Disney

Scarlett Johansson, whose contract payment as the star of Black Widow was based largely on box-office sales, has sued Disney over how they were depressed by simultaneous streaming of the superhero movie. John Thornhill comments on the ethical debate around using AI software to mimic the voice of chef Anthony Bourdain in the film Roadrunner. Pearson, the educational publisher that used to own the FT, has announced a Netflix-style model through an app that offers US students access to all 1,500 of its titles for a monthly subscription of $14.99.

Tech tools

Sony’s camera for VloggersTim Bradshaw discusses the merits of the latest wearable camera concepts in FT Magazine this week, while Sony has come up with something of a dream device for Vloggers. The ZV-E10 is the first Alpha series interchangeable lens vlog camera, “designed from the ground up for vlogging and vloggers”, it says. It has a 24.2MP sensor and features such as “Background Defocus”, which can smoothly switch between a blurred and sharp background, as well as the “Product Showcase Setting” mode that allows the camera to automatically shift focus from the subject’s face to an object being highlighted. The side-opening LCD Screen allows users to connect external mics on top of the camera and let them see the screen in selfie shooting mode and from high and low angles. It will be available in August, priced at £680/€750.

– Financial Times

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