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EU Hits Amazon with Record-Breaking Fine, Supply Chain Obstacles Threaten Holiday Sales and EU VAT Ecommerce Reforms Go Into Effect

EU Hits Amazon with Record-Breaking Fine

Luxembourg’s National Commission for Data Protection (CNPD) hit Amazon with a record-breaking €746M ($887M) GDPR fine over the way it uses customer data for targeted advertising purposes.

The penalty comes as a result of a 2018 complaint by French privacy rights group La Quadrature du Net. In their complaint, La Quadrature du Net alleged that Amazon (along with Apple, Facebook, Google and LinkedIn) manipulated customers for commercial means by choosing what advertising information they received.

In their July 16th SEC filing, Amazon slammed the decision as baseless, adding that it intended to defend itself “vigorously in this matter.”

This landmark penalty trumps the €50M ($59M) GDPR fine previously levied against Google in 2019. The CNPD has not publicly commented on the decision and Amazon has not specified what revised business practices the commission is proposing.

What stood out to us? Will Bezos still dress as an astronaut this Halloween?

Supply Chain Obstacles Threaten Holiday Sales

Retailers planning for the 2021 holiday season are still grappling with the repercussions of the COVID-19 pandemic. As of the middle of 2021, global supply chains remain unreliable and costly thanks to sky-high rates for international shipping and delays at major ports.

Traditionally, retailers employed a “just-in-time” inventory strategy, purchasing goods as close as possible to when they needed them. However, current supply chain disruptions are forcing retailers to buy up all the inventory they can as soon as it becomes available. In fact, some retailers are purchasing additional warehouse space in the U.S. and abroad to store their highly prized commodities.

Scarce container shipping capacity further exacerbates the situation. Major retailers (i.e., Home Depot) are chartering dedicated cargo ships to take greater control of their supply chains. While these measures keep in-demand products in stock, consumers are stuck holding the bag for elevated shipping costs and delayed delivery times.

The bottom line for retailers? Expect disruptions this holiday season and start preparing for them now.

What stood out to us? The Grinch might actually steal Christmas.

EU VAT Ecommerce Reforms Effective July 1st

The European Union’s sweeping reforms to the value added tax (VAT) took effect on July 1st. The changes, which mostly affect online purchases in some EU member states, were delayed six months due to the COVID-19 pandemic. 

Originally adopted by the EU Council in December 2017, the VAT ecommerce package aims to reduce administrative burdens affecting intra-EU trade while also reducing VAT fraud. The new rules aim to place EU and non-EU businesses on equal footing, promoting fair competition.

The new measures include a rule that will make online merchants that facilitate cross-border sales responsible for collecting and remitting tax on deemed supplier transactions. Also, the measure’s new forms eliminate the VAT exemption for the import of low value goods, subjecting all goods imported to the EU to VAT. It is believed that these new reforms will close the e-commerce VAT gap, estimated at €140B ($166B) in 2018.

What stood out to us? Two things are for certain...death and taxes.

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