EU policymakers criticize Amazon's role in ECB’s digital euro development

Quick Take

  • An ECB executive faced backlash from European Parliamentarians on the decision to bring Amazon on to help design the digital euro payment prototype.
  • Policymakers expressed worries regarding Amazon’s track record with the EU on privacy and tax issues.
  • Fabio Panetta, a senior ECB leader, tried to soothe concerns by emphasizing that Amazon may not be involved in potential next phases of the project.

Members of the European Parliament criticized the European Central Bank’s (ECB) decision to bring in Amazon as a partner in designing the digital euro prototype. 

The main concerns MEPs raised in the Economic and Monetary Affairs (ECON) Committee of the European Parliament on Tuesday were Amazon’s “questionable” social and tax policy, including an alleged violation of EU data protection regulations that led to a record fine from regulators last year, though Amazon appealed the decision. 

Fabio Panetta, a member of the ECB executive board, appeared Thursday before the Parliament in a quarterly exchange between the institutions to deliver an update on the progress made in the ECB’s investigation into the digital euro.

MEPs took this opportunity to vent their dissatisfaction with having Amazon involved in this process. Center-left MEP Eero Heinäluoma referred to the €746 million fine the corporate giant received for violating GDPR rules in the EU to question the central bank’s decision.

Panetta tried to quell concerns by explaining that Amazon's current role on the project is not guaranteed to continue in a potential next phase. He also said that the project benefitted from Amazon’s expertise in designing a user interfaces for payments, and that Amazon was not compensated for their work on the project.

This drew deeper criticism from centrist parliamentarian Stéphanie Yon-Courtin. “We know that Amazon wants to be paid with data.”

Other members of the panel shared Yon-Courtin's concern. 

“Honestly, I am now more worried than before,” said Jonás Fernández, an MEP from a left-leaning party.

The prototype design phase is scheduled to wrap up in March 2023, and a decision on whether to move forward with implementation of the digital euro project could come in October 2o23.

Panetta originally came to discuss collaboration needed between the private and public sector on the euro-CBDC. He outlined that the ECB aims to replicate “cash-like” privacy features for low-value transactions.

Evelien Witlox, the program director for the ECB’s digital euro project spoke about designing two privacy tiers in the CBDC in an offline and online digital euro. For the offline case, authorities can only monitor things like top-ups but other transactions will simulate the privacy of cash, she said at the Frankfurt Forum on Thursday.

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