European Court Denies Amazon's Exemption from Digital Platform Regulations

Amazon, a leading force in the digital services sector in the European Union, faced a significant legal setback this week. The EU's General Court rejected an appeal from Amazon concerning its designation as a “very large online platform” (VLPO) under the Digital Services Regulation (DSA). This ruling stems from accusations that Amazon violated freedoms related to business, property, and expression.

Legal Background and Implications

The General Court acknowledged that the obligations tied to being classified as a VLPO, which include maintaining stringent compliance standards, can indeed interfere with Amazon's operations. The judges noted that these requirements may incur significant costs and necessitate complex technical solutions. However, they concluded that such measures are justified under the Charter of Fundamental Rights, given their goal of safeguarding public interests.

Previous Legal Challenges

This isn't Amazon's first legal challenge regarding the DSA. Over a year ago, the same court denied an earlier appeal from Amazon that sought to be exempted from obligations related to storing advertisement data. Other companies designated as large digital platforms have similarly faced judicial setbacks, including Zalando, while Facebook, Instagram, and TikTok found partial success regarding the methodologies for supervision fees.

Criteria for VLPO Designation

The criteria for being designated a VLPO under the DSA are straightforward: a platform must exceed 45 million users in the EU or represent at least 10% of the EU's total population. As of August 2023, approximately twenty major platforms, including Facebook, Instagram, TikTok, and Amazon, received this designation, with even adult sites like PornHub being added later on.

Obligations of VLPOs

Being classified as a VLPO carries additional responsibilities due to the potential systemic risks these platforms pose, particularly regarding the spread of illegal content and violations of fundamental rights. Obligations include the storage of advertisements, providing data access to researchers, rapidly flagging and removing illegal content, and implementing mechanisms to counter disinformation while ensuring the protection of minors and combating gender violence.

Judicial Rationale

The judges stressed that the imposing requirements on VLPOs are motivated by the significant risks associated with the dissemination of content and are necessary to mitigate these dangers. They noted that the administrative burdens imposed by the DSA do not strip these platforms of ownership. Furthermore, they determined that any interference in property rights or freedom of enterprise is justified by the broader legislative goals of risk prevention.

Balancing Freedoms and Consumer Protection

In their judgment regarding freedom of expression, the magistrates emphasized that the DSA does not encroach upon the essence of this freedom. Instead, it seeks to balance the rights of platforms with the legitimate aim of protecting consumers. The law aims for a judicious equilibrium between commercial expression and consumer safeguards.

Conclusion

The judges affirmed that the criteria for designating a digital giant as a VLPO is neither arbitrary nor wholly inadequate, considering the substantial risks posed by platforms with more than 45 million users, exposing large populations to potentially harmful content.