Amazon.com Inc (NASDAQ:AMZN) has lost its legal challenge against its designation as a “Very Large Online Platform” (VLOP) under the European Union’s Digital Services Act (DSA).
The ruling, published on Wednesday, confirms that Amazon must comply with the strictest obligations under the DSA, which came into force in 2023. The law requires designated platforms to implement measures to prevent the spread of illegal or harmful content and products online.
Amazon is one of 25 entities designated as VLOPs by the European Commission, a classification applied to platforms with over 45 million monthly users. VLOPs face enhanced reporting requirements and supervisory fees.
Amazon argued that its e-commerce platform does not pose the systemic risks the DSA aims to mitigate, claiming that the VLOP designation infringes fundamental rights, including the freedom to conduct business and the protection of confidential information. The company also said that disclosing its advertising methods under the law would compromise trade secrets.
However, the court rejected these arguments, stating that all very large online platforms, including marketplaces, are treated uniformly because of the potential systemic risks they present.
“The distinction made in the DSA between online platforms based on their number of users is neither arbitrary nor manifestly inappropriate for the objective of preventing such risks, since online platforms with more than 45 million users may expose a large number of persons to illegal content,” the ruling said.
The court acknowledged that DSA compliance may increase costs for Amazon, but added that such interference “does not affect the essence of the freedom to conduct a business” and is justified under the EU Charter of Fundamental Rights.
Amazon said it intends to appeal the decision to the EU’s Court of Justice. “The Amazon Store, as an online marketplace, does not pose any such systemic risks; it only sells goods, and it doesn’t disseminate or amplify information, views or opinions,” Amazon said in a statement.
The decision follows a similar ruling in September, when the EU court upheld the VLOP designation for German fashion retailer Zalando, rejecting the company’s argument that its user numbers were overestimated by the European Commission.