Online retailer Zalando needs to enforce stricter regulations for its digital services.

Online service providers, including Zalando, now face tighter regulatory standards - Online retailer Zalando faces tighter regulations for its digital services.

Zalando Faces Stricter Rules Under Digital Services Act as "Very Large Online Platform"

In a recent ruling, the European Union (EU) Court has classified Zalando, the popular online shopping platform, as a "very large online platform" under the Digital Services Act (DSA). This decision means that Zalando will be subject to stricter requirements, such as submitting annual risk assessments and sharing data with authorities and researchers.

The DSA, which came into effect in April 2023, does not apply to all online shops but is specifically designed for large platforms like Zalando. The EU Commission made this classification based on Zalando's average of 45 million active users per month within the EU.

However, Zalando has announced its intention to appeal this decision to the Court of Justice of the European Union. The company believes that the EU court has not adequately considered the curated, high-quality products from established and trustworthy brand partners in its business model.

It's important to note that Zalando's business model is hybrid, involving both the sale of its own products and a partner program for third-party sales. The EU court has ruled that, with regard to third-party sales, Zalando is a platform under the DSA.

In a surprising turn of events, the EU Commission did not classify YouTube or Facebook as platforms under the DSA in April 2023. Meanwhile, YouTube was classified as a "very large online platform" in the EU after reaching more than 45 million monthly active users within the EU.

The DSA aims to ensure that platforms quickly remove illegal content from third parties on their sites. This is a crucial step towards creating a safer and more trustworthy digital environment for all users.

Zalando has expressed concerns about its inability to distinguish who among its more than 83 million users had been exposed to the content from the partner program. The company maintains that its hybrid business model does not pose a "systemic risk" for the spread of harmful or illegal content from third parties.

The ruling was announced in Luxembourg, where the EU court is located. As Zalando prepares to appeal the decision, the future of online shopping regulations in the EU remains uncertain.

Stay tuned for more updates on this developing story.