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CNPD, the Luxembourg data protection authority slapped Amazon with the record fine in a July 16 decision that accused the online retailer of processing personal data in violation of the EU’s General Data Protection Regulation, or GDPR. Amazon disclosed the findings in a regulatory filing on Friday, saying the decision is “without merit.”

“There has been no data breach, and no customer data has been exposed to any third party,” Amazon said in a statement, adding that it plans to appeal. “These facts are undisputed. We strongly disagree with the CNPD’s ruling.”

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The decision concludes a probe started by a 2018 complaint from French privacy rights group La Quadrature du Net. It cautiously welcomed the decision.

“It’s a first step to see a fine that’s dissuasive, but we need to remain vigilant and see if the decision also includes an injunction to correct the infringing behavior,” said Bastien Le Querrec, a member of La Quadrature’s litigation team, adding the group hadn’t received the decision.

EU data protection regulators’ powers have increased significantly since the bloc’s GDPR rules took effect in May 2018. It allows watchdogs for the first time to levy fines of as much as 4% of a company’s annual global sales. The biggest fine to date was a 50 million-euro penalty for Google issued by France’s CNIL.

CNPD didn’t immediately respond to an email seeking comment. Local laws bind the Luxembourg authority to professional secrecy and prevent it from commenting on individual cases, or confirming receipt of a complaint. Amazon has its EU base in Luxembourg, which puts the local regulator in charge of monitoring its data protection law compliance.

Amazon has drawn scrutiny in recent years for the vast trove of data it has amassed on a range of customers and partners, including independent merchants who sell on its retail marketplace, users of its Alexa digital assistant, and shoppers whose browsing and purchase history inform what Amazon shows them on its website.

The company says it collects data to improve the customer experience and sets guidelines governing what employees can do with it. Some lawmakers and regulators have raised concerns that the company has used what it knows to give itself an unfair advantage in the marketplace.

The privacy probe also adds to intense antitrust scrutiny of Amazon’s business in Europe. Amazon is being probed by the EU over its use of data from sellers on its platform and whether it unfairly favors its own products. Germany has multiple probes into Amazon’s sales. The U.K. is also examining similar issues to the EU.

The European Commission last month also said it sees potential antitrust problems with voice assistants and the data they allow Amazon and others to collect on user behavior.

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36% of respondents shop online weekly, up from 28% pre-COVID-19, according to a July survey of 5,000 consumers in North American and Europe from Selligent, which provides omnichannel marketing services to companies, including retailers and brands.

29% of consumers say they shop more online than in-person. However, 36% say they don’t shop more online than in person and 35% say they do both.

The vendor’s third-annual Global Connected Consumer Index Report also investigates how consumers plan to shop when the coronavirus subsides. When asked what their shopping preferences will be when life returns to “a new normal,” 39% of respondents say they will conduct a mix of online and in-store shopping. 28% will shop mostly online, 24% say “they can’t wait” to shop in a store and 10% haven’t planned that far ahead.

Additionally, 54% of respondents report that sales and deals are the most valuable communications from brands right now. Consumers also say they want messages that move away from ‘we’re here for you’ and more towards ‘here’s how we can help you,’ the report notes.

Retailers also may want to be cautious about how often they ping their customers. For example, 39% of consumers reported that they unsubscribed from at least three brand email lists in the last six months, with 55% citing “too many emails” as the reason, the most popular choice.

Additionally, the report notes:

• 76% of respondents desire real-time app and email updates on changes or delays related to their purchases.
• 64% want mobile and contactless pickup or check-in options.
• 64% say privacy is more important than online experience. However, that figure dropped from 74% in the 2019 study.
• 71% want to know product availability before purchasing online or in-store.
• 51% say that free products and buyer perks (secret sales, free shipping, promo codes) are the best ways for brands to show they care.
• 81% value flexibility in returns or cancellations.
• 75% of consumers say they prefer to receive messages via email or mobile.
• 60% of shoppers are prioritizing the purchase of essential items when shopping online.
• 60% want curbside pickup options.

Meanwhile, another survey finds shoppers plan to use buy online pick up in store more. 80% of shoppers expect to increase BOPIS and curbside pickup over the next six months, and 85% of shoppers have significantly increased curbside pickup since the pandemic began, according to a July and August survey of 2,510 U.S. shoppers who planned to visit a store for an in-store purchase, order pickup or customer service in the next six months.

Additionally, while 91% of shoppers miss shopping in stores, only 5% plan to try a product in-store in the next six months, making BOPIS and contactless pickup essential. The report, The New Store Shopper in High-Touch Retail, was commissioned by supply chain and omnichannel services provider Manhattan Associates and conducted by digital research firm Incisiv.

However, stores could make the store pickup process easier on shoppers. For example, 81% of shoppers rated the availability of preferred pickup date and time three stars or lower (out of five). This is compared with 85% of shoppers who rated ease of completing an online order four stars or higher, suggesting retailers are focusing more on the pre-sale experience and could use improvement in fulfillment.

The report also finds:

• 79% of respondents say contactless store pickup is very important to them.
• 90% prefer home delivery over a store visit in the next six months, and only 28% plan to increase in-store shopping. Safety—be it for in-store purchase or order pickup—is a top priority, respondents say.
• For 80% of shoppers, digital communications with store associates over the next six months are “likely” or “very likely.”

Other e-retail research suggests the online shopping surge is leveling off in some categories. After a massive 66% spike in daily online sales year over year for May, early August averaged 7% higher daily online sales and 3% growth in daily traffic compared with a year earlier, ecommerce personalization platform Nosto reports.

Home and garden ecommerce is still going strong, however. Early August daily online sales for home and garden retailers were up 28% year over year, Nosto says.

The overall ecommerce conversion rate is around 6% higher year over year as of August, which suggests that either shoppers are much more committed to making purchases when they visit online stores or that retailers are doing a better job at convincing them to buy, Nosto says. However, average order value is trending slightly below last year, most likely because people are being cautious with their spending due to economic uncertainty.

Other findings from the study include:

• Daily online fashion and accessory sales are up 10% year over year for early August.
• Additionally, daily visits to fashion and accessories sites are up 15%, daily sales up 18%, and conversion rates up 12% in August compared with the start of the study on March 1. (The study covers a 140 day period between March 1 and August 1).
• The online average order value within fashion and accessories is down 6% from the start of the pandemic.
• Beauty and skin care online sales are down 15% in early August compared with a year earlier and traffic to those sites is down 6%.
• Beauty and skin care daily visits are down 11%, daily sales down 20%, conversion rate down 5% and average order value up slightly (2%) for early August compared with the beginning of the March.
• For home and garden e-retailers, daily traffic in early August was up 24%, daily sales up 42%, conversion rates up 5% and average order value up 6% when compared with early March.

“With many consumers expecting to be at home more, even after lockdowns have lifted, they are happy to spend more money online to improve their living space and make it more comfortable,” says  Jake Chatt  head of brand marketing for Nosto. “And with vacation travel also not a possibility for many, people may also have been tempted to divert that spending toward purchases for their homes.”

Nosto’s The State of Ecommerce Q3 2020 study analyzed the performance of 500 online retail brands in the U.S., U.K., France, Germany, Austria, Switzerland, Nordics and Asia Pacific in March and August 2020 compared with 2019 for its findings.

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On Tuesday the Alphabet Inc. unit said it would stop supporting third party cookies over the next two years. Cookies—the bits of code that lodge in peoples’ browsers and follow them around the web—allow advertisers to target people with ads for websites they previously visited, and keep track of which ads finally induced a purchase.

Cookies have long been a core part of how the massive online ad industry operates. Criteo SA, a French marketing technology company that is particularly tied into the current system, dropped 16% on the news.

Google’s decision ushers in a new reality for digital marketing, even though it’s not the only company with a similar stance. Apple Inc.’s Safari and Mozilla Corp.’s Firefox browsers already block third-party cookies, but because Google’s Chrome is used by the majority of internet users, the company’s decision represents a major industry shift.

Getting rid of cookies “fundamentally makes everything different,” said Ari Paparo, head of digital ad firm Beeswax and a former Google executive. If the first era of online advertising was direct sales between publishers and advertisers, and the second era was algorithm-driven bidding, a system without cookies will be the third, Paparo said.

Despite the magnitude of the change, Paparo said many advertisers have had time to wean themselves off cookies. The tool’s fate had been in limbo for some time, and at least now there is clarity for the industry about what to expect, he said. Further comfort for marketers: The changes only effect desktop advertising, while many ad dollars are now pouring into mobile phones or connected televisions.

“Relevant advertising isn’t going anywhere, but cookies are an archaic technology,” said Dave Pickles, chief technology officer and co-founder of advertising tech company The Trade Desk Inc. “The fastest-growing segments of the industry, such as the booming connected TV market, rely on newer identity solutions.”

Google has billed the change as a concession to changing sentiments toward online data collection. “Users are demanding greater privacy—including transparency, choice and control over how their data is used—and it’s clear the web ecosystem needs to evolve to meet these increasing demands,” Chrome engineering director Justin Schuh said in a blog post Tuesday.

But even after cookies are gone, targeted advertising won’t go away completely. Google has proposed changes that would allow tracking to continue without passing personal information back to advertisers. That could give Google more power by cutting off marketers’ use of valuable data streams, while at the same time arguably increasing privacy online.

In recent years, Google has been navigating a thicket of threats to its business, including the public’s rising demand for privacy and government investigations into whether its business practices in the ad tech world are anti-competitive. If Google shuts advertisers out from its system too much, they could increase their complaints that it’s being unfair. But if it ignores privacy advocates, some Chrome users could decamp for other browsers.

The two-year time period for the phase-out of cookies should give marketers some time to adjust, and the search giant has said it’s seeking input from the industry as it works to find ways to help support online advertising going forward.

Google has talked about taking a more measured approach to online ads than rival browsers from Apple and Mozilla. While those companies don’t derive much money from advertising, the vast majority of Google’s revenue comes from digital ads. It’s in the company’s interest to keep advertisers spending money on its websites and ad products. Google’s empire was built on its ability to provide targeted advertising.

“Smart companies will adapt,” Paparo said. “Advertising is not going away.“

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A wave of startups, law firms and consultants are looking to take advantage of that anxiety—and to capture some of the $55 billion that companies are expected to spend on initial compliance with the law. Bart Willemsen, an analyst at Gartner who advises clients on compliance, has identified over 200 companies pitching products to help companies adhere to privacy rules. None of them actually offer a comprehensive solution. “There’s no single silver bullet,” he said.

The CCPA mandates that businesses are able to tell customers what data they have gathered about them, and to stop selling that data upon request. That requires companies to be more conscious of what data they keep and where they keep it. Building those tools from scratch can be complicated and expensive.

One startup, TerraTrue Inc., aims to help other businesses keep track of sensitive user data. “What we’re doing is building a complete privacy platform that lets companies automate the ways in which they comply all these privacy laws,” said Chris Handman, the startup’s chief operating officer.

TerraTrue grew out of work the startup’s founders, who were previously executives at Snap Inc., did to build that company’s internal privacy systems. The company has raised $4.5 million from investors so far. It joins a host of other startups helping companies prepare for the CCPA, including Austin-based Osano Inc., which has raised over $8 million, and Securiti Inc., which announced a $31 million round of investment in August.

Other companies like DataFleets Ltd. are pitching sophisticated machine learning tools designed to minimize the risk of exposing customers’ private information. “The data never leaves their phone, they retain complete control with it, it remains compliant with data regulations,” said David Gilmore, the company’s chief executive officer.

Some companies have already been adapting to stricter privacy rules elsewhere, such as the European Union’s General Data Protection Regulation, or GDPR. Those that have done so are better prepared to comply with California’s law, according to Peter Reinhardt, CEO of Segment.io Inc., a San Francisco-based startup that is helping customers navigate the new data laws. The laws aren’t identical, but some of the preparation is transferrable. “CCPA hits hard the companies that aren’t operating globally and this is the first time they need to deal with it,” said Reinhardt.

The CCPA only applies to companies that generate more than $25 million in annual revenue, handle personal information of more than 50,000 people or devices, or earn more than half their revenue from selling personal information. Many companies are experiencing significant privacy rules for the first time, and some seem prepared to test the limits. Alphabet Inc.’s Google and Facebook Inc. contend that they’re exempt from rules governing companies that sell data, since they say they don’t share consumer data with ad buyers.

Other companies will likely ignore some of the bill’s provisions until they see how it’s enforced. The California Attorney General’s Office has said it has limited resources for enforcement. Handman of TerraTrue says many businesses are unsure about what they need to do, which “creates a greater interest in products that clarify that confusion.”

Even companies who could handle the law independently may be tempted to pay for outside help. Marco Zappacosta, the CEO of the California-based local services company Thumbtack Inc., said he has assigned staff on his engineering, product, marketplace, policy and legal teams to prepare the company for the new rules. But he hopes to have them back to their regular jobs soon. “Look, you talk to any tech company and I bet they will tell you they are engineering or product constrained,” said Zappacosta. “Any effort that takes away from that has an opportunity cost.”

The CCPA likely won’t be the last new privacy rule that companies have to figure out. India is considering sweeping legislation, and the United Kingdom could formulate its own approach once when it leaves the European Union. U.S. states like New York and Washington are considering their own legislation, as is Congress.

Technology industry groups worry that a regulatory patchwork could make compliance more burdensome. That could be bad news for businesses trying not to run afoul of any new laws. But it could be a welcome development for those companies who want to help them do so.

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One of the key players in California remains Alastair Mactaggart, a real estate developer who has emerged as one of the most peculiar forces for consumer privacy in America. Mactaggart began advocating for the ballot initiative that evolved into the CCPA in 2018 after an alarming dinner-party conversation about online data collection. He has largely funded the effort himself. It developed into the most prominent attempt to create privacy rules to govern advertising behemoths like Google and Facebook, as well as the hundreds of lesser-known businesses collecting and trading information about American consumers.

California’s law gives people the right to learn what personal data companies have collected and for them to request those companies refrain from selling that information. It will effectively become the new standard for privacy in the U.S., given California’s importance as a market. But even as the CCPA goes into effect, Mactaggart remains concerned that the technology industry will chip away at its protections. He’s promoting a ballot initiative that would both strengthen the law and require any future changes to weaken its protections be put to voters. “If we get this passed it will be much more difficult to amend it in a negative way in the future,” Mactaggart said in a phone interview.

Consumer advocacy groups like the Electronic Frontier Foundation and Common Sense Media have yet to get behind Mactaggart’s approach. He is already facing skepticism from some legislators and corporate interests. The Internet Association, a trade group representing technology companies, argues the law has practical flaws that Mactaggart’s advocacy will make harder to address. “The initiative is throwing a monkey wrench in the process,” said Kevin McKinley, the group’s director of government affairs for California.

Technology companies would prefer not to have activists from California serve as the driving force for privacy policy. McKinley is worried that parallel debates could emerge in other statehouses. “Everybody is interested in a federal solution,” he said. “We’re hoping we can get a national law that gives everyone in the U.S. the same rights.”

At first glance, privacy seems like a logical topic for bipartisan cooperation. There’s widespread concern about the issue at a time of growing suspicion towards companies like Facebook Inc., Amazon.com Inc., and Alphabet Inc.’s Google. But hostility towards the tech industry hasn’t translated into productive political alliances, mostly because the broad agreement about the existence of a problem hasn’t extended to consensus about how to address it.

Republicans led by Senate Commerce Chairman Roger Wicker have insisted on national preemption—a federal law that would overrule state laws or ballot initiatives on privacy. Democrats in Congress have also worked to develop federal privacy legislation but have generally opposed pre-emption. The parties are also split on whether a national bill should give citizens the power to sue companies for privacy violations. Democrats worry that a federal bill without this so-called private right to action would leave the Federal Trade Commission to defend citizens’ privacy rights, which they are convinced would lead to weak enforcement. Republicans, who tend to prioritize the restriction of frivolous lawsuits, are reluctant to introduce a new litigation target.

Wicker acknowledged the lack of progress in an interview in late December. “Well, I will announce to you right now that I’ve abandoned Jan. 1 as a timeline,” he joked. But he argued there’s still hope for 2020. “I think there’s overwhelming support for a national standard, a good strong federal bill that protects consumers and gives people certainty about what compliance is and isn’t,” he said.

Whether anything happens in Congress could depend on how things develop in California. Privacy advocate are also watching state legislatures in New York, Washington and Illinois, which they expect to be the most likely states to advance legislation in 2020. The more movement at the state level, the more pressure on Republicans in Congress to support a bipartisan federal privacy bill. But as the potential for state legislation increases, Democrats in Congress also have a stronger incentive to hold out for more in negotiations.

Many privacy advocates remain skeptical of the prospects for a federal privacy law. “We do not believe there will be comprehensive federal legislation in 2020,” said Jim Steyer, the founder of Common Sense Media. “We never thought it would pass because Congress is so dysfunctional and the executive branch is missing in action.”

Privacy advocates also express less urgency about a single standard on privacy, and some believe there’s much to be gained from experimentation around the country. “States are taking the lead,” Hayley Tsukayama, a legislative activist for the Electronic Frontier Foundation in California, “and companies hate it.”

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So what will developments will lie in the year ahead? The December issue of Internet Retailer examines how ecommerce may evolve next year.

Inside the December issue

• “Retailers adapt to rising fraud rates” looks at how merchants are working to ensure they have safeguards in place to combat fraud.
• “What California’s new privacy law means for retailers” explains the potential impact of the new data privacy standard.
• “Retailers adapt to the evolving marketing landscape” examines how online merchants plan to spend their digital marketing budgets next year.
• “How the new North American free trade agreement will impact ecommerce” looks at how the U.S.-Mexico-Canada Agreement may drive more retailers to sell across borders.

Compliments of our sponsors: ACI Worldwide, Lucidworks, Melissa, Monetate, Radial, Top Ten Wholesale.

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