Zalando files a complaint in EU general court, arguing the EC unfairly labelled the German online retailer as “very large”, in the DSA's first legal challenge
Javier Espinoza / Financial Times :
Context & Ripple Effects
Zalando's complaint at the EU General Court is the first legal challenge to the Digital Services Act itself, aimed squarely at the Commission's decision to designate the retailer as "very large" — a label that carries the DSA's heaviest compliance obligations and exposure to fines of up to 6% of global annual revenue. The designation also lands on a company already locked in a long-running fight with Amazon for Europe's $42B online shoe and apparel market, where Zalando has been investing heavily in logistics to hold its ground.
The move set a template: two weeks later Amazon filed its own petition challenging its "large platform" designation, becoming the first US company to do so. That precedent now cuts both ways for Zalando — the General Court has since dismissed Amazon's bid to shed its Very Large Online Platform status, an early signal of how the court views these threshold arguments.
First-order effects
- If the designation stands, Zalando must meet the full VLOP compliance regime — risk assessments, audits and oversight — while carrying exposure to penalties of up to 6% of global annual revenue; winning the case would lift it out of that tier entirely.
- The Commission's designation methodology is now under formal legal scrutiny for the first time, forcing it to defend how it counts users and draws the very-large line.
Second-order effects
- Amazon's follow-on petition turns Zalando's challenge into a coordinated test of the DSA's thresholds, and the court's dismissal of Amazon's request suggests designated platforms will more likely have to comply than litigate their way out.
- Enforcement is no longer theoretical: the €550M fine levied on Alibaba's AliExpress for illegal products shows what non-compliance costs once a platform stays in the designated tier, raising the stakes of Zalando's threshold argument.
Third-order effects
- If designation challenges keep failing, the DSA settles into a structure where the user-count threshold is effectively fixed law rather than negotiable classification — pushing large platforms toward compliance spending instead of legal resistance.
- For European e-commerce, the Zalando–Amazon rivalry now plays out on two boards at once: market share in fashion retail and the regulatory tier each rival is assigned, with the DSA adding a fixed cost layer that scales with size.
The trend: EU platform regulation is shifting from rulemaking to contested enforcement, with designation challenges like Zalando's testing whether the DSA's size thresholds are law or negotiating positions.