EU Court Upholds Zalando's VLOP Status Under Digital Services Act

The EU General Court, acting as the first instance of the Court of Justice of the European Union (CJEU), recently affirmed a significant decision regarding online retail giant Zalando. In its ruling, the court confirmed that Zalando is indeed subject to the stricter requirements of the European Digital Services Act (DSA). This classification, which places Zalando among the Very Large Online Platforms (VLOPs), entails additional obligations specifically designed to enhance consumer protection across the European Union and actively prevent the proliferation of illegal content on its platform.

The court's decision followed Zalando's appeal against the European Commission’s initial classification, which designated the company as one of the largest platforms falling under the DSA’s scope. Zalando's appeal was ultimately dismissed, as the General Court upheld the Commission’s methodology and findings. Central to this classification was the determination of Zalando's average monthly number of active recipients in the EU. The DSA mandates that platforms exceeding a threshold of 45 million active users – roughly equivalent to 10% of the EU population – must comply with its most stringent provisions.

A key aspect of the General Court's judgment involved clarifying how the number of active recipients should be calculated. The court agreed with the Commission's interpretation, which crucially included individuals exposed to content originating from third-party sellers through Zalando’s extensive "Partner Program." This broad definition led the Commission to estimate Zalando’s average monthly recipients at more than 83 million, a figure significantly higher than the approximately 30 million cited by Zalando. Zalando’s lower estimate was based primarily on gross sales generated via the "Partner Program," a method the court deemed insufficient for accurately reflecting platform reach.

Consequently, the court fully endorsed the Commission’s higher estimate of over 83 million average monthly recipients, confirming that Zalando far exceeded the 45 million user threshold for VLOP classification. Beyond the user count, the General Court also addressed and rejected Zalando's additional arguments. Zalando had claimed that its classification under the DSA violated fundamental legal principles, specifically those of legal certainty, equal treatment, and proportionality, but these assertions were found to be unsubstantiated by the court.

The judgment further underscored the critical rationale behind the DSA's stricter framework. It emphasized that when an online platform reaches an average monthly user base of 45 million or more, its extensive reach presents a significant potential to facilitate the marketing and distribution of dangerous or illegal products to a substantial segment of the EU population. This inherent risk justifies the imposition of more rigorous obligations, ensuring that such influential platforms take proactive measures to safeguard consumers and maintain a secure online environment in line with the DSA’s overarching objectives.