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Amazon Challenges EU’s ‘Very Large Online Platform’ Label, Citing Lack of Systemic Risk

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Amazon has asked Europe’s General Court in Luxembourg to overturn its designation as a “very large online platform” (VLOP) under the European Union’s Digital Services Act (DSA). The U.S. e-commerce giant argues that it does not pose systemic risks to users that would justify the stricter regulatory requirements imposed by the label.

The DSA, which came into force in 2022, targets large tech companies, requiring those classified as VLOPs to implement enhanced measures to combat illegal and harmful content. These measures include comprehensive risk management, independent auditing, and data sharing with regulators and researchers.

Amazon’s legal counsel, Robert Spano, told the court that online marketplaces like Amazon’s store do not create systemic risks, and that VLOP rules are ineffective in preventing the spread of illegal or counterfeit goods on such platforms. He emphasized that any risks are limited to individual customers rather than the platform’s entire user base, and existing product safety laws already address these issues.

Spano criticized the use of size as a metric for risk, describing it as “arbitrary, disproportionate and discriminatory.”

The court is expected to deliver its verdict in the coming months.

Other major tech companies, including Meta Platforms, TikTok, and German retailer Zalando, have also contested aspects of the DSA.

Zalando Challenges EU Tech Regulations, Argues It Shouldn’t Be Classified as a Very Large Online Platform

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Zalando, Europe’s largest online fashion retailer, has criticized EU regulators for classifying it alongside major platforms like Amazon and AliExpress under the bloc’s Digital Services Act (DSA). The company argues that its business model is fundamentally different, and thus it should not be subject to the same stringent provisions that apply to the other two tech giants.

The DSA, which came into force in 2022, imposes more responsibilities on very large online platforms (VLOPs) to combat illegal and harmful content, with fines of up to 6% of their global annual revenue for non-compliance. Zalando’s lawyer, Robert Briske, told the General Court that the European Commission had failed to properly recognize the differences between Zalando and companies like Amazon, AliExpress, and booking.com. He emphasized that Zalando operates a hybrid business model, combining both direct retail and a marketplace for third-party sellers, which sets it apart from purely online shops or marketplaces.

Zalando contends that the Commission’s designation of its active users as 83 million is inaccurate. The company argues that only 30.8 million of those visitors qualify as active users in 2023, the year it was classified as a VLOP. Briske stated that this miscalculation was another key issue in the case.

In response, EU Commission lawyer Liane Wildpanner defended the classification, asserting that Zalando’s model is similar to that of Amazon and AliExpress, both of which also offer hybrid services. Wildpanner argued that Zalando was attempting to “have the best of both worlds” by challenging its VLOP designation.

Zalando has garnered support from Germany’s e-commerce association, BEVH, while the European Information Society Institute, the European Parliament, and the Council of the European Union have sided with the Commission. The General Court is expected to issue its ruling in the coming months. Amazon, too, has challenged the Commission’s VLOP designation and is awaiting a hearing date.