Large EU Internet Retailer Whines That It Shouldn’t Have To Comply With The DSA’s Most Stringent Rules
from the wait,-no-one-told-us-this-might-apply-to-eu-companies-too! dept
A few months ago, when the EU designated 17 companies as “VLOPs” — Very Large Online Providers — subject to the most stringent regulations, one name that I heard lots of folks in the US be confused about was Zalando, which is a large EU-focused online retailer. It was also one of only two companies actually based in the EU to be designated as such (Booking.com was the other). And it seems that Zalando was just as surprised as everyone else, as it has now sued to challenge that designation.
Germany’s Zalando on Tuesday contested the labelling methodology and took its case to the Luxembourg-based Court of Justice of the European Union, Europe’s top court.
The company said the Commission had failed to take into account the hybrid nature of its business model and the fact it does not present a systemic risk of disseminating harmful or illegal content from third parties.
“The European Commission misinterpreted our user numbers and failed to acknowledge our mainly retail business model. The number of European visitors who connect with our Partners is far below the DSA’s threshold to be considered as a VLOP,” Zalando CEO Robert Gentz said in a statement.
Of course it does seem at least somewhat eyebrow raising to see an EU company as the first one to challenge this law. It almost feels like they naturally assumed that this law was only supposed to apply to those foreign internet companies, rather than the EU’s own companies.
The response from the EU’s internet czar, Thierry Breton (who always comes off as a bit too smug and gleeful about his power to suppress speech) is pretty laughable as well, claiming that he thinks companies should be happy to face his ridiculous, speech suppressing, compliance-nightmare-inducing regulations:
“Complying with the DSA is not a punishment – I encourage all platforms to see it as an opportunity to reinforce their brand value and reputation as a trustworthy site,” he said in a statement.
That’s just disconnected from reality. If it was simply an “opportunity to reinforce their brand value and reputation as a trustworthy site,” then you wouldn’t need to have a regulation with massive potential fines backing it up. Companies already have plenty of incentive to “reinforce their brand value” without having to hire a shitload of compliance lawyers.
Filed Under: designation, dsa, eu, thierry breton, vlop
Companies: zalando
Comments on “Large EU Internet Retailer Whines That It Shouldn’t Have To Comply With The DSA’s Most Stringent Rules”
Facebook/Meta is another. Technically its Irish branch is a subsidiary, set up for tax purposes, but that’s explicitly the entity which millions of its users have entered into a contract with. And this is the basis for all those GDPR lawsuits and fines; the Irish regulator is regulating the company that Zuckerberg et al. intentionally created under Irish law.
Zalando makes two points.
1) Visitors are being treated as monthly active users. They nix this argument themselves in point 2)
2) The EU improperly added the 53 million to 54 million monthly active users of the retail part of Zalando (retail is not being an intermediary according to Zalando) to the 30 million to 31 million monthly active users of their marketplace part (which is an intermediary). This also nixed point 1) since it are not visitors but users of at least part of the Zalando website that are added.
So the crux of the complaint is that the EU is using an improperly expansive definition of what users to count under the DSA to include enough users to get Zalando classed as a VLOP.
Re:
Amazon just filed as well. Same reasoning as Zalando, we are a retailer. Added argument there are bigger online retailers then us in the EU who aren’t considered a VLOP (though the examples are iffy it be amazing if a dutch online retailer, Bol.com, has half the required number of users for example.
Initial reaction of the EU is again we have a different interpretation of what falls under the VLOP definition and all of Amazons users are counted.
I don’t know enough about this particular law to comment one way or another but this statement strikes me as hopelessly naïve:
They mean “reinforce your brand value” in the sense of “be large enough to comply where others will be too small to ever comply and compete in the market”.