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Amazon’s turn to notice DSA

The US giant claims it is not a “very large digital platform”, but its arguments are not as convincing as Zalando’s.

Digital Sovereignty - July 21, 2023

On July 11, 2023, Amazon filed a suit with the Court of Justice of the European Union to challenge its categorization as a “very large digital platform” according to the Digital Services Act (DSA). The European bill, passed in 2022, aims to regulate content published on social media and products sold by online stores.

In particular, it sets a number of requirements for “very large platforms” with more than 45 million monthly European users, for whom the DSA will come into effect on August 23, 2023. In matters of e-commerce, it will only apply to marketplaces. The DSA will require them to verify the ID of third party sellers and implement random checks.

Zalando, the German online clothing store, used this specific point to challenge its labeling as a “very large platform”, on June 27, 2023. Indeed, out of its 83 million monthly European users, 31 million only buy from third party vendors. With fewer than 43 million users, its marketplace could very well avoid the DSA’s definition.

Amazon’s challenge, on the other hand, seems rather less convincing. The US giant maintains “the DSA was designed to address systemic risks posed by very large companies with advertising as their primary revenue and that distribute speech and information.”

The company considers, and rightly so, that its business does not fall within the DSA’s scope. However this is a very simplistic view of the DSA, focusing on its more media-friendly aspects and forgetting marketplaces, which the text itself does not. Moreover, Amazon complains that it is the only provider designated as a “very large platform” by the Commission, yet the list also includes Zalando and the Chinese company AliExpress.

Therefore it seems questionable to assert, as the US tech giant does, that Amazon “would be unfairly singled out and forced to comply with costly administrative requirements that in no way benefit consumers in the European Union”.

As for the rest of it, with over 60% of its European business conducted with third party sellers, Amazon fully meets DSA criteria. The CJEU legal proceedings do not constitute grounds for an exemption, and Amazon, as Zalando, will have to comply with DSA requirements starting from this summer.

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