Zalando loses its challenge against DSA VLOP designation

On 3 September 2025, the General Court of the European Union delivered the first major judicial interpretation of the DSA in its dismissal of Zalando’s challenge against its designation as a “very large online platform” (“VLOP”) under the EU’s Digital Services Act (“DSA”).  

Zalando’s argument had focussed on the fact that its e-commerce platform is a hybrid service, via which the Berlin-based fashion retailer sells its own products (not an activity regulated by the DSA), as well as allowing third-party partners to market products (an activity that is in-scope of the DSA). Zalando argued that this means that users who use the platform only to buy directly from Zalando, and not to engage with listings by third-party partners, should not be counted when assessing whether the platform meets the DSA’s user number threshold to qualify as a VLOP. 

This case has captured widespread attention, not only due to its impact on Zalando but also because the decision affects how all in-scope hybrid platform providers should count, and report on, their user numbers, and how likely such providers are to qualify as VLOPs. 

Background: What Is a VLOP and Why Does It Matter?

The DSA, adopted by the European Commission to “prevent illegal and harmful activities online and the spread of disinformation”, established new categories for online intermediary service providers. All online platforms are required to calculate and report on their monthly active user EU numbers and the VLOP designation is reserved for platforms with at least 45 million of such users.

VLOPs are subject to the strictest obligations under the DSA, including requirements relating to enhanced transparency, risk assessment, data sharing with authorities, and more robust measures against illegal content and products. Read more about this in our previous blogs here and here.

The Zalando Case: Challenging the VLOP Status

In April 2023, Zalando found itself among the first batch of platforms designated as VLOPs by the European Commission, with the European Commission citing that the platform had over 83 million average monthly active EU users. 

Zalando pushed back against this classification, arguing that its business model, primarily focusing on the sale of goods, did not fit the intended definition of a VLOP. Zalando estimated that only around 30 million of its users interacted with partner content (based on the gross value of sales generated under its partner programme) and thus only these users were users of the in-scope intermediary service and should be counted for the purpose of assessing whether Zalando qualifies as VLOP. 

Zalando also raised questions about the uniformity and transparency of the designation process, suggesting that the Commission’s methodology lacked clarity and consistency.

The General Court’s Ruling

The European General Court upheld Zalando’s designation as a VLOP. The Court recognised that the Zalando platform is an ‘online platform’ within the meaning of the DSA only insofar as third-party sellers market products on it, and it is not an online platform in relation to the direct sale of products by Zalando itself. However, as Zalando was unable to distinguish, among the more than 83 million people who used its platform, those who were actually exposed to the information provided by third-party partner sellers from those who were not, the European Commission was entitled to consider that they were all deemed to have been exposed to it. 

The Court also rejected Zalando's challenge that the classification of VLOPs violates the principles of legal certainty, equal treatment and proportionality. In its decision it emphasised that marketplaces can be used to facilitate the marketing of dangerous or illegal products to a significant part of the EU’s population.

Implications for the Digital Sector

The ruling confirms that the DSA will be applied robustly to a wide array of digital platforms, and not just to the most obvious targets, such as social networks or search engines. 

The implications are most acute for any services with hybrid offerings - capturing not only marketplace platforms like Zalando but also any other platforms with a mixed service offering, such as streaming platforms on which users can access user generated content alongside content offered directly by the platform provider (e.g., licensed music or the provider’s own editorial content). Many such providers have been waiting for this decision to bring greater certainty as to how they should calculate and report on their user numbers, and may now wish to revisit their methodology. 

Some uncertainty continues to linger as Zalando has indicated that it will appeal, and the Amazon Store has also challenged its designation as a VLOP on the basis that its platform does not pose a systemic risk. A decision on the Amazon Store’s challenge is expected from the General Court later this year. However, following the decision against Zalando, and especially given the Court’s emphasis on the risk that marketplaces can pose, it can be expected that succeeding in this challenge will be an uphill battle for Amazon.