German fashion giant Zalando is challenging its designation as a Very Large Online Platform (VLOP) under the European Union’s Digital Services Act (DSA). The case, currently under review in the General Court of Luxembourg, could have significant implications for how the EU calculates user numbers for platforms that fall under the DSA.
The Digital Services Act, which went into effect in August 2023, applies strict content moderation, transparency, and user protection regulations to platforms with over 45 million monthly active users. Zalando, which operates a hybrid business model consisting of both retail and third-party services, argues that its user count should be calculated differently from platforms like Facebook and TikTok. Zalando’s retail business, it claims, should not fall under the DSA, as its own content is distinct from the third-party content hosted on the platform.
Zalando’s challenge stems from the lack of clear guidelines from the EU Commission on how to assess user numbers for platforms that combine retail and third-party content. The company provided the Commission with different user numbers for its retail and partner services but claims that the current methodology used by the EU does not fairly account for these differences.
The DSA was designed to address the risks of harmful or illegal content spread across large platforms, but Zalando’s transparency report indicates that it received only 731 content notices, with only 111 requiring removal. It also states that no orders from authorities were issued regarding its content. Zalando argues that its platform does not face the same issues as platforms dealing with harmful third-party content, which is the focus of the DSA.
If Zalando wins its case, the ruling could influence other online platforms with similar business models, including e-commerce sites like Amazon and platforms like Pornhub and Xvideos, which are also disputing their DSA designations.
The European Commission has designated six other platforms as VLOPs since the DSA’s implementation and launched investigations into platforms like Meta’s Facebook, TikTok, X, Temu, and AliExpress for possible regulatory violations. These investigations are still ongoing.
The General Court’s ruling on Zalando’s case is expected later this year and could set a major precedent for how user numbers are calculated for large online platforms under the EU’s Digital Services Act.