Obscure internet boutique Amazon sues EU for calling it a Very Large Online Platform
If it walks like a duck...
Unhappy with its inclusion in what the EU calls a list of Very Large Online Platforms (VLOPs), Amazon has sued to have the designation under the bloc's Digital Services Act (DSA) stripped.
Amazon was among the first 17 companies to be designated a VLOP in late April, defined under the DSA as being large enough to reach 10 percent of the EU's population, or around 45 million people. Facebook, Twitter, Apple's App Store, Google Play, YouTube, Alibaba's AliExpress and German retailer Zalando are all included among others.
The Jeff Bezos-founded online retailer is the first US company to sue the EU over DSA rules. Zalando was the first European company to do so, and filed a similar suit last month.
Being designated a VLOP means a platform has added responsibilities to protect their users from illegal content and products, hate speech and similar scourges of the internet. Amazon confirmed the filing of its complaint to The Register, saying it doesn't fit the definition of a VLOP because it mainly sells stuff, not advertising.
"The DSA was designed to address systemic risks posed by very large companies with advertising as their primary revenue and that distribute speech and information," an Amazon spokesperson told us. Amazon supports the European Commission's goal to protect customers from illegal products and content, the company said, but doesn't think it's a VLOP.
"The vast majority of our revenue comes from our retail business," Amazon said, adding that it believes the company has been singled out because other large EU retailers, which it said do more business in the bloc than Amazon, haven't been given the designation.
If stuck with the VLOP designation while other EU retailers aren't, "Amazon would be unfairly singled out and forced to meet onerous administrative obligations that don't benefit EU consumers," it told us.
Amazon said it has spent billions to protect customers from illegal products without anyone placing a legal requirement on it before, and plenty of other laws like the EU's GPSR already cover products. "VLOP rules are directed at other business models," Amazon argued.
Just how does one define a VLOP?
The DSA imposes rules on companies with an online presence, requiring them to "tackle the spread of illegal content, online disinformation and other societal risks," the European Parliament said in 2022. That's intended to apply to online retailers like Amazon, which are obligated to counter illegal goods, ensure sellers are properly traced, and safeguard users.
When asked for comment, the European Commission told us it had taken note of Amazon's filing but had nothing to say about the case. It did have plenty to say about the DSA itself and Amazon's inclusion as a VLOP, however.
"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. For marketplaces as for social networks, very wide user reach increases the risks and the platforms' responsibilities to address them," a spokesperson told The Register.
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The Commission added that the appeal doesn't have a suspending effect on Amazon's need to comply with DSA requirements, which are set to take effect in late August, and that it intends to fight the suit in court.
The August deadline is the date by which Amazon and the other VLOPs "will need to adapt their systems, resources, and processes for compliance, set up an independent system of compliance … [and] complete the first annual risk assessment exercise to examine risks such as how illegal content might be disseminated through their service," the Commission said.
Along with controlling the distribution of illegal goods, Amazon would face other content requirements as well. It would have to add protections for users that would allow them to opt out of recommendation systems, include labels on advertisements and disclose their promoters, and create plain-language summaries of terms and services.
Protections for minors are also extended under VLOP requirements. Amazon would have to cease targeted advertising to children and perform regular risk assessments on the negative mental health effects the platform (and its recommendation algorithm, one would assume) may have on under-age users.
Social networks and online retailers can both be VLOPs, according to the Commission's spokesperson, who told us that's the case despite differences in business models between the pair. "Not all platforms are the same and therefore they would not pose the same risks, neither would they be required to take the same risk mitigation measures," it said.
With several ecommerce platforms included in the first VLOP list, expect this case to be watched closely by other companies seeking a way out of those onerous reporting requirements. Whether Amazon will manage to get out of its August requirements, remains up to the EU General Court, where Amazon filed its complaint. The EUGC didn't respond to our questions, and it's not clear when the case may be heard. ®