E-commerce giant Amazon has seen its expansion into the European Union (EU) market slowed in recent days, as regulators fined the company about $35 million for using “excessively intrusive” warehouse labor software and blocked its $1.4 billion acquisition of consumer robotics vendor iRobot.
In the first instance, the French Data Protection Authority known by the acronym for its French-language initials, CNIL, said last week that it levied the fine on Amazon France Logistique, the Seattle-based firm’s warehouse management arm in the country.
According to CNIL, the company had set up an excessively intrusive system for monitoring employee activity and performance, and had conducted video surveillance without providing sufficient information or security.
Specifically, Amazon was collecting and analyzing the data generated by the barcode scanner guns issued to each warehouse employee, and measuring the exact time it took individuals to complete tasks such as storage or removal of an item from the shelves, and the length of idle time between tasks. The CNIL ruled that it was illegal to set up a system measuring work interruptions with such accuracy, potentially requiring employees to justify every break or interruption. The board also said it was excessive for Amazon to keep that data and the resulting statistical indicators on its employees and temporary workers for a period of 31 days.
“Such systems kept employees under close surveillance for all tasks carried out with scanners and thus put them under continuous pressure. It also took into account the large number of people involved (several thousand) and considered that the constraints imposed on employees through this computer monitoring contributed directly to the company's economic gains and gave it a competitive advantage over other companies in online sales market.”
Amazon has disputed the ruling, calling it factually incorrect and noting that the investigation was conducted without visiting any company sites. “We strongly disagree with the CNIL’s conclusions which are factually incorrect and we reserve the right to file an appeal. Warehouse management systems are industry standard and are necessary for ensuring the safety, quality, and efficiency of operations and to track the storage of inventory and processing of packages on time and in line with customer expectations,” a company spokesperson said.
However, the news comes just two weeks after a group of 29 U.S. Senators made a similar complaint to the company about its treatment of its parcel delivery drivers in the U.S.
In an unrelated matter, Amazon took a second blow from EU business regulators this week, who opposed the company’s planned acquisition of Bedford, Massachusetts-based consumer robot maker iRobot, which is known for its automated “Roomba” vacuum cleaner. According to published reports, European Commission antitrust regulators were concerned that Amazon would thwart iRobot rivals on its online marketplace, especially in France, Germany, Italy, and Spain.
In a statement, Amazon said it also disputed that position, but said it had terminated the planned deal, seeing no path to regulatory approval in the European Union. Following the collapse of the deal, iRobot laid off 31% of its workforce, slashed R&D funding by $20 million, and announced that its chairman, CEO and founder, Colin Angle, would step down. In his place, the company hired turnaround specialist Jeff Engel and appointed him Chief Restructuring Officer.
Editor's note: This story was revised on January 30 to include a statement from Amazon.
