What's Happening?
The Court of Justice of the European Union has ruled that Zalando must comply with stricter regulations as a 'very large online platform' under the Digital Services Act (DSA). The ruling follows the European Commission's classification of Zalando, which assumes 83 million active users per month in the EU. Zalando's hybrid business model, which includes selling its own products and third-party items, was central to the court's decision. The company plans to appeal, arguing that its curated selection of high-quality products does not pose a systemic risk for harmful content dissemination.
Why It's Important?
The ruling highlights the EU's commitment to regulating large online platforms to prevent the spread of illegal content. For Zalando, compliance with the DSA means adhering to strict requirements, such as annual risk assessments and data sharing with authorities. This decision could impact Zalando's operations and influence other online platforms facing similar classifications. The case underscores the challenges of balancing business models with regulatory demands, particularly for companies operating across multiple jurisdictions.
What's Next?
Zalando's appeal against the ruling will be closely watched, as it may set a precedent for other platforms classified under the DSA. The outcome could influence how online retailers structure their business models to comply with EU regulations. Additionally, the appeal process may prompt discussions on the interpretation of user data and platform classifications.
