Three upcoming General Court cases will help shape the EU Digital Services Act, resolving fundamental issues such as the European Commission’s designation of Very Large Online Platforms.
Shutterstock.com/HJBC
The General Court has its work cut out in cases due to be heard just days apart, as online platforms seek to annul their VLOP designations and challenge the legality of specific DSA provisions.
Under the DSA, VLOPs must abide by much stricter rules than smaller platforms including transparency requirements and risk mitigation. Four platforms have now separately challenged the commission’s decisions to designate them as VLOPs.
Two of those platforms’ cases will be heard this week, with a judgment due in a third challenge next week.
On 13 November, Technius, the Cyprus-incorporated operator of Stripchat, will challenge how the commission calculated the number of active recipients of its service. It has already highlighted to the General Court that in one member state, the commission has estimated a number of users that is greater than its entire population. It argues that the commission’s errors led to an incorrect assumption that Stripchat had over 45 million average monthly users in the European Union.
The following day, on 14 November, the General Court will hear not only Pornhub parent company Aylo’s request for an annulment of its VLOP designation, but also its challenge to the article 39 of the DSA, which forces platforms to publish a public library of its advertisements.
Fieldfisher partner Tim Van Canneyt tells Lexology PRO that while the DSA provides a definition for defining a platform as a VLOP through calculating its average monthly active recipients in the EU over six months, it “does not spell out a harmonised calculation method.”
“Unsurprisingly, the commission has adopted a stricter interpretation than the platforms themselves,” Van Canneyt says. “This raises practical challenges: for example, how to count recipients who use a service without logging in, or across multiple devices, without double-counting.”
And on 19 November, the General Court will rule on Amazon’s challenge to the European commission’s designation of the Amazon Store as a VLOP, arguing it was "unfairly singled out” compared to other large retailers. Should the court refuse to fully overturn the designation, it has asked it to block the enforcement of DSA obligations requiring it to offer a non-profiling option for each of its recommender systems and to publish a public advertising library.
“I expect – and hope – that the rulings will provide much-needed guidance on methodology. The additional obligations imposed on VLOPs are significant, so legal certainty is essential to avoid ambiguity about whether these obligations apply,” Van Canneyt says.
In September, European retailer Zalando failed to overturn its VLOP designation. The General Court’s judgment confirmed that platforms must apply a reliable method for their calculation of monthly users. Van Canneyt noted that what constitutes as reliable “remains open to interpretation, and these cases should help clarify that standard.”
It is likely that the losing parties before the General Court will seek to pursue appeals before the European Court of Justice. Zalando has already confirmed that it will take its General Court DSA judgment to the ECJ.
Counsel to Technius
Noerr
Partners Tobias Bosch and Torsten Kraul in Berlin
Counsel to Aylo
Hogan Lovells
Partner Christopher Thomas in Brussels and Anthonia Ghalamkarizadeh in Hamburg are assisted by Alexandra Bray and Janis Beckedorf
Counsel to Amazon
Hengeler Mueller
Partner Albrecht Conrad and counsel Malte Frank in Berlin
Gibson Dunn & Crutcher
Partner Robert Spanó in Paris is assisted by Yannis Ioannidis
Counsel to Zalando
Osborne Clarke
Partners Robert Briske in Berlin and Konstantin Ewald in Cologne are assisted by Leonie Schneider and Juliana Trouet