Amazon doesn’t want to comply with Europe’s Digital Services Act, and to avoid the rules the company is arguing that it doesn’t meet the definition of a Very Large Online Platform under EU law. Amazon filed an appeal at the EU General Court to challenge the European Commission decision that Amazon meets the criteria and must comply with the new regulations.
“We agree with the EC’s objective and are committed to protecting customers from illegal products and content, but Amazon doesn’t fit this description of a ‘Very Large Online Platform’ (VLOP) under the DSA and therefore should not be designated as such,” Amazon said in a statement provided to Ars today.
The Digital Services Act includes content moderation requirements, transparency rules, and protections for minors. Targeted advertising based on profiling toward children will no longer be permitted, for example.
Amazon argued that the new law is supposed to “address systemic risks posed by very large companies with advertising as their primary revenue and that distribute speech and information,” and not businesses that are primarily retail-based. The vast majority of our revenue comes from our retail business,” Amazon said.
Amazon claims to be “unfairly singled out”
Amazon also claims it’s unfair that some retailers with larger businesses in individual countries weren’t on the list of 19 companies that must comply with the Digital Services Act. The rules only designate platforms with over 45 million active users in the EU as of February 17.
Amazon said it is “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. 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.”
Those other companies Amazon referred to include Poland’s Allegro or the Dutch Bol.com, according to a Bloomberg report. Neither of those platforms appears to have at least 45 million active users.
A summary of the appeal provided by Amazon claimed the designation “is based on a discriminatory criterion and disproportionately violates the principle of equal treatment and the applicant’s fundamental rights.” In response, the EC said that “it would defend its position in court and added that Amazon still must comply with the rules by end of August, regardless of the appeal,” Bloomberg wrote.
“The scope of the DSA is very clear and is deﬁned to cover all platforms that expose their users to content, including the sale of products or services, which can be illegal,” the commission said in statement reported by Bloomberg. “For marketplaces as for social networks, very wide user reach increases the risks and the platforms’ responsibilities to address them.”
Rules apply mostly to US-based firms
In April, Europe announced its designation of 19 large online platforms, which are mostly US-based companies. Five are run by Google, specifically YouTube, Google Search, the Google Play app and digital media store, Google Maps, and Google Shopping. Meta-owned Facebook and Instagram are on the list, as are Amazon’s online store, Apple’s App Store, Microsoft’s Bing search engine, TikTok, Twitter, and Wikipedia.
Listed platforms also include Alibaba AliExpress, Booking.com, LinkedIn, Pinterest, and Snapchat. The other platform is German online retailer Zalando, which was the first company to sue the EC in an attempt to get removed from the list.
Companies have until August 25 to comply and could face fines of up to 6 percent of their annual revenue if they don’t. Companies will have to submit annual risk assessments and risk mitigation plans that are subject to independent audits and oversight by the European Commission.
“Platforms will have to identify, analyze and mitigate a wide array of systemic risks ranging from how illegal content and disinformation can be amplified on their services, to the impact on the freedom of expression and media freedom,” the EC said in April. Similarly, specific risks around gender-based violence online and the protection of minors online and their mental health must be assessed and mitigated.” One new rule bans advertisements that target users based on sensitive data such as ethnic origin, political opinions, or sexual orientation.
The EC also said that users must be given “clear information on why they are recommended certain information and will have the right to opt-out from recommendation systems based on profiling.” Users must have the ability “to report illegal content easily and platforms have to process such reports diligently.” Amazon and the other platforms must also “provide an easily understandable, plain-language summary of their terms and conditions, in the languages of the Member States where they operate.”
Amazon’s appeal asks for a complete removal of its designation but suggests two alternatives if the court doesn’t fully side with Amazon. Amazon’s alternative suggestions would remove “the obligation to provide users with an option for each recommender system that is not based on profiling” and remove “an obligation to compile and make publicly available an advertisement repository.”