Zalando Takes Legal Action Against EU’s Major Platform Designation

Zalando is facing European justice. The German ecommerce giant has appealed to the Court of Justice of the European Union (CJEU), the body that holds the highest judicial power within the EU group, the European Commission’s decision to classify it as a very large online platform (Vlop). This classification groups together platforms with more than 45 million active users per month, subject to greater regulation of their online content.

“We strongly believe that the European Commission misunderstood Zalando’s business model when it designated the company as a Vlop in April 2023,“ Lena Wallenhorst, vice president of corporate governance at Zalando, has argued in a post on her LinkedIn profile. The appeal comes after the General Court of the European Union, one of the bodies integrated within the ECJ, rejected the company’s first plea in September.

Zalando defends that its platform is a “hybrid” service, as it sells from its own products to those of third parties, which, it claims, differentiates it from other giants that have also received the designation. Currently the list, articulated through the European Union’s Digital Services Act (DSA), is composed of about twenty companies, including Google or Meta, but also AliExpress or Shein.

Zalando has appealed the court decision of the General Court of the European Union

“In 2024, 64% of gross merchandise value (GMV) came from our retail business, which is excluded from the scope of the DSA,“ Zalando’s directive alleges. This legislation, which was passed in November 2022 and began to apply to Vlop in August 2023, aims to oversee online platforms operating across the EU. The regulation establishes four groups (very large platforms, online platforms, data hosting services and intermediary services), with specific legislation for each.

Some of the obligations for companies receiving this designation include reporting possible illegal content on the platform, having user-friendly terms and conditions, increasing transparency regarding advertising and recommendations, and sharing their data with the Commission and national authorities to demonstrate their compliance with the rules.

“We will continue to advocate for clearer and less ambiguous definitions, especially in today’s fast-changing digital landscape, as well as ensuring a level playing field in Europe,“ the giant explains. The basis of Zalando’s appeal is based on such ambiguity, which, it argues, can lead to unequal treatment as a result of the absence of a clear and consistent methodology.