EU General Court dismisses Amazon appeal, upholds ‘very large’ platform designation

Brussels – Amazon’s appeal against the European Commission’s decision to designate the Amazon Store platform as a “very large online platform” is dismissed. The General Court of the Union made the announcement, certifying that perhaps the world’s largest shop is indeed “large.” 

The issue stems from the Digital Services Act (DSA), which imposes specific obligations on providers of certain services designated by the European Commission as ‘very large online platforms’ or ‘very large online search engines’ when they exceed the threshold of 45 million users in the European Union (i.e., 10 percent of the Union’s population). 

Amazon EU Sàrl, which operates the Amazon Store platform, sought the annulment of the decision by which the Commission had designated that platform as “very large,” challenging the lawfulness of the provision in the regulation that specifies which online platforms, including online marketplaces, are to be designated as large online platforms and imposes on them to specific obligations of transparency, cooperation, and access to data. According to Amazon, this provision infringes several Fundamental rights guaranteed by the Charter of Fundamental Rights of the European Union, including in particular the freedom to conduct a business, the right to property, the principle of equality before the law, freedom of expression and information, and the right to private life and the protection of confidential information.

In today’s judgment, however, the General Court of the European Union rejected the appeal. 

Regarding freedom to conduct a business, the Court noted that while the obligations imposed by the DSA constitute an interference with that freedom, insofar as they may entail significant costs, affect the organization of activities, and require complex technical solutions. However, such interference, which is provided for by law and which “does not affect the essence of the freedom to conduct a business, is justified for the purpose of the Charter of Fundamental Rights.” According to the Court, the EU legislature, “which has a broad discretion,” did not commit a manifest error in considering that very large online platforms, including online marketplaces exceeding the threshold of 45 million users, could pose systemic risks to society, in particular by disseminating illegal content or infringing fundamental rights, including consumer protection. The obligations imposed on those platforms, such as the option of a recommender system not based on profiling, a public repository of advertisements, or researchers’ access to certain data, are intended to prevent those risks, even if they entail significant financial burdens. 

Regarding the right to property, the Court notes that the obligations imposed by the DSA “mainly constitute administrative burdens which do not deprive providers of very large online platforms of ownership of their platforms.” On the principle of equality, the General Court notes that the EU legislature had broad discretion to treat very large online platforms, including online marketplaces, uniformly, since they may pose systemic risks to society. Moreover, the distinction made in the DSA between online platforms based on their number of users “is neither arbitrary nor manifestly inappropriate” for the objective of preventing such risks, given that platforms with more than 45 million users may expose a large number of persons to unlawful content.

Regarding freedom of expression and information, the Court notes that “the obligation imposed on very large
online platforms to offer a recommender system option which is not based on profiling may restrict the way in
which products marketed on those platforms can be presented, but that such interference is justified.” According to the Court, this measure does not affect the essential content of freedom of expression and pursues a legitimate consumer protection objective. 

On the right to private life and the protection of confidential information, the Court notes notes that the obligations of advertising transparency and of access by researchers to certain data do indeed constitute an interference with that right, but that they are provided for by law, “proportionate and justified by an objective of general interest,” namely the prevention of systemic risks in order, particularly, to contribute to a high level of consumer protection. It emphasises that the repository’s public nature is strictly regulated, while researchers’ access is subject to stringent security and confidentiality requirements.