EGC dismisses Zalando's action against classification as a ‘very large online platform’

The European General Court (EGC) has dismissed Zalando's action against the classification of the platform as a ‘very large online platform’ within the meaning of the Digital Services Act (DSA). The decisive factor in the decision was the number of active users, which includes those persons who were exposed to information from third-party sellers as part of the partner programme.

In decisions dated 25 April 2023, the European Commission classified Zalando, a platform for the sale of fashion and beauty products, as a ‘very large online platform’ under the DSA. This classification is based on the fact that the average monthly number of active users in the EU, at over 83 million, is significantly above the threshold of 45 million (corresponding to approximately 10% of the EU population).

The classification entails additional obligations for Zalando, which are intended, among other things, to strengthen consumer protection and combat illegal content. Zalando had challenged this decision before the court.

The court has now ruled that Zalando constitutes an ‘online platform’ within the meaning of the DSA insofar as third-party sellers offer products via the so-called ‘partner programme’. However, Zalando's direct sales (‘Zalando Retail’) do not fall under this definition.

The number of active users was decisive in assessing the classification as a ‘very large online platform’. This includes persons who have received information provided by third-party sellers within the framework of the partner programme. Since Zalando was unable to demonstrate any way of distinguishing between users who had seen this information and those who had not, the Commission assumed that all users had been exposed to this information. This resulted in an estimated number of active users of over 83 million, which justified the classification as a ‘very large online platform’. Zalando had argued in vain that this figure was only around 30 million, based on sales in the partner programme.

The court also rejected Zalando's arguments that the provisions of the DSA violated the principles of legal certainty, equal treatment and proportionality. The same applies to Zalando's argument that it had fully appropriated the content as its own and therefore could not be classified as an online platform. The court emphasised that platforms with at least 45 million active users can be used to distribute illegal products to a significant part of the Union's population. 

In its decision, the court confirmed its consumer-friendly stance and at the same time showed how crucial the specific design of online platforms can be in determining whether and to what extent the obligations of the DSA apply.