Amazon Challenges EU Digital Rules Taking Effect in August

Amazon Challenges EU Digital Rules Taking Effect in August

News by Nikola DjuricNikola Djuric
Published: July 12, 2023

Amazon has contested the European Union’s upcoming content rules arguing it would be “unfairly singled out” in the bloc’s list of very large online platforms (VLOP).

In the first U.S. challenge to the EU’s Digital Services Act (DSA), which takes effect on August 25, Amazon rejected being labeled as a VLOP, insisting that this only could apply to businesses whose primary source of revenue came from advertising and information distribution.

“The vast majority of our revenue comes from our retail business, we are not the largest retailer in any of the EU countries where we operate, and none of these largest retailers in each European country has been designated as a VLOP,” Amazon noted in a Tuesday statement.

Amazon filed a petition in Luxembourg’s General Court declining to be designated as a VLOP under the DSA, joining about a dozen other U.S. tech giants that also received this label.

Explaining its situation, the eCommerce giant said that “if the VLOP designation were to be applied to Amazon and not to other large retailers across the EU, Amazon would be unfairly singled out and forced to meet onerous administrative obligations that don’t benefit EU consumers.”

However, Amazon isn't the first company to contest the DSA.

Two weeks ago, German online retailer Zalando filed a similar lawsuit claiming it shouldn’t be designated as a VLOP because retail is the largest part of its business. At the time, Zalando insisted its business didn't pose a “systemic risk” of spreading harmful or illegal content from third parties.

How Will the DSA Affect U.S. Businesses?

The new European rules aim to establish a transparent and accountable framework for online platforms while supporting innovation and competitiveness in the market. For digital services providers, this means better legal certainty, harmonization of rules, and an easier scaling path in Europe.

The DSA establishes four types of online platforms:

  • Intermediary services offering network infrastructure
  • Hosting services such as cloud and web hosting services
  • Online platforms bringing together sellers and consumers
  • Very large online platforms (VLOPs) reaching more than 10% of 450 million consumers across the EU, which could pose risks in the dissemination of illegal content and societal harms

As part of the new obligations that all platforms will have to comply with from late August, VLOPs will have to implement preventive measures such as allowing external auditing, enabling user choice when it comes to privacy, sharing their data with authorities, and cooperating with governments in crisis events.

Tech giants labeled as VLOPs currently include Google, Amazon, Alibaba, Apple, Meta, Twitter, Wikipedia, LinkedIn, TikTok, and Snapchat, among others.

EU member states will have until February 17, 2024, to make sure the DSA is fully implemented in practice, meaning the remainder of this year will be used to solve any arising issues.

Meanwhile, Washington and Brussels continued aligning policies in the digital sector. Earlier this week, the EU confirmed that American companies will be able to continue storing their users' data on U.S.-based servers after the Biden administration took steps to ensure data is safely stored.

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