Zalando Fights EU’s Digital Services Act in Court

Germany’s Zalando is considered Europe’s largest online fashion retailer.

But is it a “very large online platform”? That’s now a matter for the courts.

Zalando announced Tuesday (June 27) it had filed suit in the European Union’s Court of Justice, disputing its designation under the European Commission’s Digital Services Act (DSA) as a “Very Large Online Platform” (VLOP).

That distinction places Zalando in the company of tech giants like Google and Amazon, requiring it to share data with authorities, stick to a code of conduct and perform risk management and independent auditing.

“Zalando argues that the European Commission did not take into account the majority retail nature of its business model and that it does not present a ‘systemic risk’ of disseminating harmful or illegal content from third parties,” the company said.

“On the contrary, Zalando offers its customers a safe online environment with highly curated products from leading brands and established partners that are thoroughly vetted.”

In addition, the retailer says it contests what it calls “unequal treatment” stemming from an “absence of a clear and consistent methodology” to determine whether a company is a VLOP.

“We take note of the decision of Zalando,” a spokesperson for the EC told PYMNTS Wednesday (June 28). “We have no comment.”

However, the spokesperson noted that the DSA’s VLOP designation is based on numbers the companies provided themselves. The commission says it calculated all recipients engaging with a site, and used other sources of information to ensure its methodologies are consistent.

The commission also pointed out that Zalando’s CEO had recently met with Thierry Breton, the European Commission’s industry chief, for what Breton called a constructive meeting.

“With its millions of users, ⁦‪Zalando⁩ is a European success story,” Breton wrote on Twitter last week. “And with success comes responsibility.”

The commission in April announced the 19 companies it had designated VLOPs. In addition to Zalando, they include businesses owned by Alphabet and Meta, along with Pinterest, Snapchat, TikTok, Twitter, Wikipedia and Booking.com.

“We consider these 19 online platforms and search engines have become systemically relevant and have special responsibilities to make the internet safer,” Breton said at the time.

The DSA requires online platforms and search engines to publish their monthly active users to show whether they meet the 45 million user threshold to be considered VLOPs.

The law, packaged with the Digital Markets Act (DMA), was passed last year, and requires transparency from technology platforms along with accountability in their capacity as disseminators of content.

The DSA also outlines rules for content and marketplace moderation that aim to make it easier to take down illegal content, services or products while also boosting accountability surrounding removal decisions.

“The Digital Services Act is one of the EU’s most ground-breaking horizontal regulations and I am convinced it has the potential to become the ‘gold standard’ for other regulators in the world,” Jozef Síkela, the Czech Republic’s minister for industry and trade, said last fall.

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