Also in October, the European Commission announced that it would start a formal probe into allegations that Amazon ( AMZN - Analyst Report ) had used its Luxembourg unit to illegally minimize the taxes it pays in Europe. Amazon leases its technology licenses to a tax-exempt partnership in Luxembourg, which then operates in Europe on its behalf. Amazon received a favorable tax ruling in 2003, which limited its total tax to less than 1% of its European income. If it is found that Amazon gained competitive advantage as a result of this mechanism, it may be required to pay off the resultant gains over the past 10 years.