Case Summary and Outcome

The General Court of the Court of Justice of the European Union dismissed an action by Amazon EU Sàrl and upheld the European Commission’s decision designating the Amazon Store as a “very large online platform” under the Digital Services Act (DSA). The case arose from Amazon’s challenge that the DSA’s designation criteria and subsequent obligations violated its fundamental rights under the EU Charter. The Court found that while the DSA’s obligations interfered with Amazon’s freedom to conduct a business, this interference was justified, proportionate, and necessary to mitigate systemic risks posed by platforms with vast reach. It further held that the obligations did not infringe the rights to property, equal treatment, freedom of expression, or private life, as they were prescribed by law, respected the essence of those rights, and served the overriding public interest of consumer protection and a safe online environment.

Facts

The applicant, Amazon EU Sàrl, operates the online marketplace “Amazon Store” across multiple EU member state websites. On 17 February 2023, Amazon published data showing its average monthly active recipients in the EU exceeded 45 million. The European Commission, pursuant to Article 33(4) of the Digital Services Act (DSA), issued a preliminary finding on 22 February 2023 that the platform met the threshold for designation as a “very large online platform” (VLOP) under Article 33(1). After notifying Luxembourg, which raised no objections, and receiving observations from Amazon (which did not contest the threshold), the Commission adopted Decision C(2023) 2746 final on 25 April 2023, formally designating Amazon Store as a VLOP.

Amazon brought an action for annulment under Article 263 of the Treaty on the Functioning of the European Union (TFEU) before the General Court, seeking to annul the decision. It argued primarily that Article 33(1) of the DSA was unlawful because it imposed burdensome obligations (Articles 34–43) on designated platforms, infringing multiple rights under the Charter of Fundamental Rights of the European Union (the Charter). In the alternative, it sought partial annulment concerning specific obligations to provide a non-profiling based recommender system (Article 38) and to compile a public advertising repository (Article 39). The applicant was supported by the German e-commerce association BEVH. The defendant Commission was supported by the European Parliament, the Council of the European Union, and the European Consumer Organisation (BEUC).

Decision Overview

Judge S. Papasavvas (President) delivered the judgment for the General Court. The main issue before the Court was whether Article 33(1) of the DSA, which subjects online platforms with over 45 million monthly active users in the EU to stringent risk management obligations, was unlawful for infringing the Charter rights to freedom to conduct a business (Article 16), property (Article 17), equal treatment (Article 20), freedom of expression (Article 11), and respect for private life (Article 7).

The applicant argued that the obligations were disproportionate, not tailored to marketplaces (which it claimed do not create “systemic risks”), and imposed excessive costs. The defendant and interveners contended the obligations were necessary, proportionate, and justified to address societal risks posed by platforms of such scale.

The Court first established the admissibility of the plea of illegality against Article 33(1), finding a direct legal connection with the contested designation decision. It then examined each Charter claim, but its reasoning was anchored by a pivotal interpretation of the DSA’s core concept. The Court provided a crucial and expansive interpretation of “systemic risk,” which Amazon had argued did not apply to marketplaces. It explicitly rejected Amazon’s narrow, financial-sector-inspired view that systemic risk requires an interconnected “system” of entities, holding instead that under the DSA, systemic risks are those posed to society as a whole and are defined by the scale and societal impact of a platform’s reach.

The Court affirmed that such risks include the broad catalogue listed in Article 34(1) of the DSA, such as the dissemination of illegal content, negative effects on fundamental rights (including freedom of expression and consumer protection), and harms to civic discourse or public health, and found that marketplaces are fully capable of generating them. It concluded that the 45-million-user threshold triggers designation precisely because a platform of that scale may expose a significant part of the EU population to these societal harms, irrespective of its service type. As the Court stated, “the objective of that regulation is to mitigate systemic risks to society as a whole in so far as they could affect a significant part of the population of the European Union. It follows that the fact that marketplaces are independent of each other… does not make it possible to preclude those marketplaces from giving rise to some of the systemic risks.” [para. 70]

Regarding the freedom to conduct a business, the Court acknowledged the obligations imposed by the DSA (e.g., risk assessments, independent audits, non-profiling recommender options, advertising transparency, data access for researchers, supervisory fees) “may represent a significant cost, have a considerable impact on the organisation of [the provider’s] activities or require difficult and complex technical solutions” and thus constituted an interference with Article 16. [para. 53] However, it found the interference justified under Article 52(1) of the Charter as it is provided by law, does not affect the essence of the freedom, and is justified by the objectives pursued. The Court noted the legislature enjoys a wide margin of discretion in areas involving complex social and economic choices and held it did not commit a manifest error in finding that VLOPs like Amazon Store, due to their reach, can cause the systemic risks defined above. It rejected Amazon’s claim that less restrictive measures (e.g., excluding marketplaces or using qualitative criteria) would be as effective, noting such alternatives could delay implementation and reduce effectiveness. The Court also found the cost burden, while significant, did not render the measures manifestly disproportionate given the paramount objective of consumer protection.

As for the right to property, the Court found the DSA obligations imposed administrative burdens but did “not deprive those providers of the ownership of those platforms” and thus did not constitute an interference with the right to property. Even if they did, such interference would be justified by the EU legislature’s objective of preventing systemic risks. [paras. 126–128]

In relation to the principle of equal treatment, the Court rejected the claims of unequal treatment. It found that marketplaces, social networks, and search engines are in a comparable situation as all can give rise to the systemic risks previously defined. Differentiating between platforms based on the 45-million-user threshold was not arbitrary, as platforms exceeding it “may expose a significant part of the European Union to illegal content.” [para. 145] Treating retailers (who market only their own products) differently from online platforms (which host third-party content) was also justified, as platforms “may facilitate the dissemination of illegal content without their knowledge” and play a uniquely systemic societal role. [paras. 154–157]

Concerning freedom of expression, the Court accepted that Article 38 (requiring a non-profiling recommender option) interfered with the commercial expression of platform providers by restricting how products are presented when users choose that option. However, the interference was justified: it is prescribed by law, respects the essence of the right, and pursues the legitimate objective of consumer protection by allowing users choice over how their data is used for recommendations. The Court noted, “the legislature was entitled to take the view, without exceeding its broad discretion, that consumer protection required consumers to be able to have access … to an option which was not based on profiling.” [para. 174]

Finally, regarding the right to private life, the Court found that obligations to publish an advertising repository (Article 39) and provide data to researchers (Article 40) interfered with the right to respect for private life, as they may require disclosure of confidential business information. Nevertheless, the interferences were proportionate. The repository excludes personal data and the most commercially sensitive information (e.g., advertisement success metrics), and data access for researchers is subject to strict security and confidentiality safeguards. The Court emphasised “the importance of the objective of consumer protection” and the need to mitigate systemic risks justified the measures. [para 199]

Based on all the considerations made above, the Court rejected the first plea in its entirety. Consequently, the dependent second and third pleas (targeting Articles 38 and 39 specifically) were also rejected. The action was dismissed in full, and Amazon was ordered to pay the Commission’s costs.