A cross-party coalition of members of the European Parliament on Thursday turned their fire on the European Central Bank for picking U.S. retail giant Amazon to help develop a digital euro.
Fabio Panetta, an Italian economist who's on the ECB's executive board, turned up to a morning meeting of the Economic and Monetary Affairs committee with a prepared speech on the currency’s design features – perhaps expecting the usual placid exchange of views over plans for the European Union's central bank digital currency.
Instead, he was met with demands from furious lawmakers to backtrack on his decision to pick the U.S. company – the subject of numerous controversies – to develop a prototype for e-commerce applications of the putative new CBDC.
“We know that the reputation of Amazon in terms of social and tax policy is questionable, I have to say,” said center-left lawmaker Eero Heinäluoma, citing a record-breaking fine of 746 million euros ($720 million) the company received from data protection regulators last year for allegedly breaching privacy rules, a decision that the company has since appealed. “What does Amazon have that could not be found in the European Union?”
Other lawmakers questioned whether the choice would undermine the stated goals Panetta has for the digital euro – to keep EU payments competitive and free from foreign meddling.
“How do you explain this choice really?” asked Stéphanie Yon-Courtin, a lawmaker from French President Emmanuel Macron’s centrist Renew Europe coalition. “In July 2022, you were saying about the digital euro that it would protect the strategic autonomy of European payments and monetary sovereignty … You were also saying that a digital euro would help to avoid market dominance. Three months later, we've been announced that Amazon has been selected over 54 companies.”
Lawmakers from the Green Party went further, calling for the ECB to reverse the decision to avoid undermining the entire project.
“I would like to know whether you would consider revising the decision,” said the Greens’ Ernest Urtasun. He drew parallels with the now-abandoned Libra initiative, in which the involvement of the “big American company” Facebook (now Meta Platforms) in a cryptocurrency project drew “strong opposition.”
If there is no change of heart, Urtasun asked if Panetta is worried that "this project – which is essential and that the parliament supported – will not start with a very strong lack of credibility.”
Panetta defended his decision, arguing that Amazon had been chosen based on pre-issued criteria that he was powerless to change now and that the prototypes Amazon develops would not be reused later on.
“We wanted to have one merchant, and only one merchant applied” to the call for tender, Panetta said. “We want to learn [from] the best technology not from the worst one … there are not many companies in Europe that could show their experience in dealing with hundreds of millions of users.
“There is no impact of this prototyping exercise on the future development on the actual participation to the terms of the digital euro,” Panetta said. “You are concerned what could be the consequences of this exercise? Zero."
Panetta also stressed that, for its participation, the company received neither financial rewards, nor privileged data about the project or its users – but if anything, those assurances seemed to increase lawmakers’ disquiet.
“Honestly, I am now more worried than before,” said the Socialist Party’s Jonás Fernández, because the lack of a financial reward implied the company was profiting in some other way.
Amazon declined to comment on the hearing, but reiterated a previous statement that it was "excited to work with the European Central Bank on their digital euro prototyping exercise."
UPDATE (Sept. 29, 2022, 10:11 UTC): Adds response from Amazon.