While the latest financial report fell short of expectations and revenue growth slowed significantly, Amazon has just been fined a record $888 million (approximately $888 million) by the European Union for violating data privacy. A total of RMB 5.729 billion) was fined, which is the largest fine for data privacy violations in the EU’s history.
Affected by the above-mentioned bad news, Amazon’s stock price plummeted, falling by more than 7.56%. Its market value once evaporated by nearly one trillion yuan, and the stock price was last reported at US$3,327.59 per share.
Amazon will face a sky-high fine of over 5.7 billion for violating data protection regulations
According to Bloomberg, Amazon was fined for violating the EU’s strict data protection regulations. The EU’s main regulatory agency imposed a fine of 746 million euros (approximately 888 million US dollars, 5.729 billion yuan), which is the largest data privacy breach fine in the EU’s history.
On Friday, Amazon disclosed the July 16 decision of the Luxembourg Data Protection Authority in a regulatory filing. The decision said Amazon’s processing of personal data was inconsistent with the EU’s General Data Protection Regulation.
Amazon said in the filing that the fine was “unwarranted” and that it would “vigorously defend itself on this matter.” The company will appeal the decision.
It is understood that on May 25, 2018, the European Union promulgated the General Data Protection Regulation (GDPR), which is considered to be the most stringent network data management regulation in the history of the European Union. Its biggest feature is that it restricts companies from using individuals Right to use user data. If an enterprise collects user data without a specific, clear, and legitimate purpose, or if the enterprise fails to delete it immediately after collecting and achieving the purpose despite the user’s consent, it is an illegal act. Violations of GDPR may result in penalties of up to 4% of annual revenue.
It is worth noting that this is not the first time Amazon has been fined for violating GDPR. On December 10, 2020 local time, the French National Commission for Information and Liberties (CNIL) issued an announcement stating that because Google and Amazon’s French websites stored users’ personal information without users’ permission, the agency’s Standing Committee decided to issue legal sanctions to Google and Amazon respectively. The company issued fines of 100 million euros (approximately 800 million yuan) and 35 million euros (approximately 280 million yuan).
Amazon’s financial report was lower than expected, and the “Bezos Era” is officially over
In addition to facing record fines, Amazon’s own operating performance is not optimistic. The latest financial report disclosed shows that Amazon’s second-quarter revenue, operating profit and third-quarter guidance were all lower than market expectations. After the data was disclosed, many international investment banks lowered their target prices for the company.
After the market closed on Thursday, Amazon released its second quarter financial report for fiscal year 2021. The company’s second-quarter revenue was US$113.08 billion, which was lower than market expectations. It increased by 27% compared with US$88.912 billion in the same period last year. However, compared with the revenue growth rate of 44% in the first quarter of this year, it was significantly higher than the same period last year. slowed down and hit a record low in the past five quarters.
Amazon’s second-quarter operating profit was US$7.7 billion, a year-on-year increase of nearly 33%, which was lower than market expectations of US$7.82 billion.
At the same time, Amazon’s online store sales growth fell back to 16% year-on-year in the second quarter. Compared with the 48% business growth rate in the same period last year, the 16% growth rate is a bit pitiful.
While revenue and operating profit fell short of expectations, Amazon’s third-quarter guidance was also significantly lower than expected. Amazon said third-quarter revenue growth may be only 16%, and the company expects net sales of $106 billion to $112 billion, below Wall Street expectations of $119.2 billion.
Amazon said its revenue growth will slow in the next few quarters as customers are no longer stuck at home. Amazon Chief Financial Officer Olsavsky said that as the economy further opens and sales stabilize after a sharp increase in the early stages of the epidemic, Amazon’s sales performance will continue to decline.
It is worth noting that the disclosure of second quarter financial data also marks the official end of the “Bezos Era”. On July 5, local time in the United States, Amazon founder Bezos officially stepped down as CEO of Amazon. His successor was Andy Jassy, who is in charge of the cloud computing business. The latter has worked at Amazon for 24 years.
Amazon’s stock price fell 8%, and international investment banks have lowered their target prices.
After the disclosure of financial report data for the second quarter of fiscal year 2021, international investment banks have lowered their target prices for Amazon.
Among them, Mizuho lowered the target price of Amazon from US$4,400 to US$4,100; investment bank Benchmark lowered the target price of Amazon from US$4,400 to US$4,200; Atlantic Securities lowered the target price of Amazon from US$4,000 to US$3,800; in addition, Credit Suisse The target price of Amazon was lowered from US$4,850 to US$4,700; JP Morgan lowered the target price of Amazon from US$4,600 to US$4,100. Truist Securities lowered its price target on Amazon to $3,800 from $4,000.
On the evening of July 30, Amazon’s stock price opened lower and moved lower, falling by more than 7.56%, and its market value once evaporated by nearly one trillion yuan.
Global antitrust! The Biden administration is targeting giants such as Amazon
Amazon’s successor as CEO, Andy Jassy, is 53 years old and graduated from Harvard Business School. One of the challenges that Andy Jassy will face as the new head of Amazon is responding to calls for greater government regulation of large technology companies.
It is reported that in June this year, members of the U.S. Congress asked the country�A series of bills have been submitted targeting large technology companies, and the huge business empire Amazon must be one of the key targets.
In October last year, the U.S. House of Representatives Judiciary investigated the competitive behavior of companies such as Amazon for 16 months. The Antitrust Subcommittee finally concluded that FAAG (Facebook, Apple, Amazon, and Google) formed a monopoly. In a report, the U.S. House of Representatives Judiciary Committee called for the introduction of regulations to maintain fair competition and break up large technology companies such as Amazon to restrict them from acquiring other companies.
In addition, the European Commission has launched two rounds of antitrust investigations against Amazon in less than two years. The results of the first round of investigations reported in November 2020 showed that Amazon and third-party sellers on the platform compete in the retail business, but Amazon illegally abused its market dominance and used the sales data of these third-party sellers to make profits for its own products. Currently, the European Commission has launched a second round of antitrust investigation into Amazon’s shopping cart and Prime membership functions.
Technology giants are becoming the focus of global antitrust supervision. On July 9, local time, U.S. President Biden signed an executive order to promote competition in various industries in the United States, targeting the monopolistic behavior of large technology companies and promising to strengthen scrutiny of technology industry transactions and the collection of massive personal data.
The executive order requires stricter review of mergers and acquisitions involving large technology companies, focusing on so-called “killer acquisitions” aimed at eliminating competitive threats to small businesses and preventing small businesses from being killed by giants before they get started.
This move may encourage antitrust law enforcement agencies to further curb the huge power and influence that companies such as Amazon, Apple, Google and Facebook have developed.
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