On 7 October 2014, the European Commission announced the launch of a formal investigation into whether or not Luxembourg's tax treatment of Amazon has constituted a breach of the EU's state aid rules. This follows the launch of other currently active investigations into the tax treatment of Fiat Finance and Trade, Apple and Starbucks in Luxembourg, Ireland and the Netherlands respectively.

Specific focus is given to a tax ruling provided for Amazon by the Luxembourg tax authorities in 2003, which may be illegal under the EU state aid rules. The ruling essentially allowed for a structure where most of Amazon's profits from across European are recorded in Luxembourg with a low rate of tax that is further reduced by making royalty payments to another Amazon entity in Luxembourg not subject to corporate tax.

Both Amazon and Luxembourg have rejected any allegations of wrongdoing.