Zalando Loses Court Fight Against Landmark EU Online Content Rules

Europe’s biggest online fashion retailer Zalando lost its court fight against EU online content rules on Wednesday, boosting EU tech regulators’ efforts to force online platforms to do more to tackle illegal and harmful content on their platforms.

Zalando sued the European Commission after it was designated as a very large online platform (VLOP) under the Digital Services Act (DSA), putting it in the same category as Alphabet’s Google and Meta Platforms and subject to onerous DSA requirements.

The company had argued that it differs from other online giants and that it is a hybrid service consisting of both an online shop and an online marketplace, selling its own products as well as those provided by partners.

The Luxembourg-based General Court disagreed with its arguments.

“The General Court dismisses Zalando’s appeal against the designation of its eponymous platform as a very large online platform,” the Luxembourg-based tribunal said.

Judges said the EU tech regulator was correct in assessing Zalando’s average monthly number of active users at more than 83 million and not around 30 million as it claimed on the basis of the gross value of sales generated under its partner programme.

They said this was because Zalando itself was unable to distinguish, among the more than 83 million people who used its platform (including Zalando Retail and the Partner Programme), those who were actually exposed to the information provided by third-party sellers under the Partner Programme from those who were not.

Zalando can appeal on matters of law to the Court of Justice of the European Union, Europe’s highest court.

Zalando’s challenge is the first by a company against the DSA. The General Court will rule next week on Meta and TikTok’s challenges against fees levied on them aimed at covering the Commission’s cost of monitoring their compliance with the DSA.

The case is T-348/23 - Zalando v Commission.

By Foo Yun Chee; Editors: Sudip Kar-Gupta, Louise Heavens

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