Europe’s online fashion retailer Zalando has lost its legal challenge against the European Commission’s decision to classify it as a “very large online platform” (VLOP) under the Digital Services Act (DSA).
The DSA was enacted in November 2022 with the objective of creating a secure, reliable and credible digital space across the European Union (EU), promoting innovation while safeguarding fundamental rights, such as consumer protection.
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The commission designated the retailer as VLOP in April 2023.
The General Court upheld the commission’s designation, reinforcing the EU’s regulatory efforts to compel online platforms to intensify their fight against illegal and harmful content to protect consumers.
Judges confirmed that the EU tech regulator accurately evaluated Zalando’s average monthly active users to exceed 83 million.
This was in contrast to the approximately 30 million users reported by Zalando, based on the gross sales value from its Partner Programme.
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By GlobalDataAs a VLOP, Zalando is now subject to additional obligations to protect consumers and prevent the spread of illegal content.
The court found that Zalando operates as an online platform through its Partner Programme, which allows third-party sellers to market products. This is in contrast to its direct sales operations, known as Zalando Retail.
The distinction was crucial in determining the platform’s VLOP status.
The General Court also dismissed Zalando’s claims that the DSA’s rules on classifying VLOPs were in violation of the principles of “legal certainty, equal treatment and proportionality”.
The court highlighted the potential for marketplaces, such as Zalando to facilitate the distribution of dangerous or illegal products to a significant portion of the EU’s population, given their substantial user base.
In 2024, Singapore-headquartered fast fashion online retailer Shein was designated as VLOP under the DSA regulation in EU law.
