(CN) - Amazon's attempt to sidestep Europe's toughest digital rulebook has failed, with judges in Luxembourg ruling on Wednesday that the online retail giant counts as a "very large platform" under the EU's new Digital Services Act, putting the world's biggest marketplaces on the same hook as social media giants.

The General Court of the European Union agreed that Amazon's marketplace isn't just another online shop but a powerful platform that can shape what millions of people see and buy, even if it deals in sneakers and kitchenware rather than videos or politics. They said its sheer scale means it can amplify harm just like social networks do - from unsafe products to deceptive listings - and that such influence comes with extra responsibility. 

Amazon pushed back, saying the EU had blurred the line between online stores and social networks. It argued that such obligations make little sense for e-commerce platforms and that they erode its competitive edge. But the court found the consumer-protection rationale decisive, writing that "the importance of the objective of consumer protection may justify even substantial negative economic consequences for certain economic operators."

Amazon now falls under the EU's most demanding set of online rules, requiring the company to run annual risk checks, publish ad libraries, share data with researchers and undergo independent audits to keep its platform in check, a burden the court said was justified in the public interest.

Scale over sector

At the center of the dispute was whether tagging Amazon as a "very large online platform" went too far in curbing its right to do business.

Amazon countered that Brussels had misunderstood its model, saying the company isn't a social network pushing content or data but a retail site that connects buyers and sellers. They argued that "marketplaces do not constitute a 'system' and are therefore not liable to give rise to 'systemic' risks," accusing the commission of wrongly equating a shopping platform with a social media feed.

The judges saw it differently. They agreed the label brings extra responsibilities but said those rules are both lawful and proportionate, calling them a fair trade-off between corporate freedom and public good. "The freedom to conduct a business is not an absolute right," the court wrote, adding that the Digital Services Act's risk-based duties strike the right balance between business interests and social responsibility.

EU lawmakers were right, the judges said, to see Amazon's marketplace as more than just a traditional store. With its vast reach and hybrid model combining its own sales with those of third-party sellers, they said the platform holds real power over what millions of shoppers see and buy. That kind of reach, in the court's view, brings a level of responsibility smaller rivals simply don't face.

Systemic risk isn't just for social media

The court also made clear that the EU's concept of "systemic risk" extends well beyond social networks. Online marketplaces, it said, can cause harm in different ways, for instance by letting unsafe or illegal goods spread, and those risks fall squarely within what the law seeks to prevent.

By rejecting Amazon's claim that the rules were disproportionate, the judges also drew a clear line for future disputes. Brussels, they said, isn't required to tailor its digital rules for each company, and only measures that are clearly unreasonable or excessive would breach EU fundamental rights. Amazon, they concluded, hadn't met that threshold.

Irene Kamara, associate professor at Tilburg Law School, said the judgment reaffirms the Digital Services Act's core principles of accountability and proportionality. She noted that the court "found no violation of the freedom to conduct a business," since any interference was balanced against the EU's commitment to high consumer protection.

Kamara also pointed out that the decision clarifies the notion of systemic risk, explaining, "It focuses on who may be harmed rather than whether platforms form part of a 'system,'" meaning risks that can "affect society as a whole."

The ruling cements the act's core idea that what matters most is size, not sector. Any platform with more than 45 million users in the EU - roughly one in 10 people - lands in the "very large" category. That list already includes heavyweights like Meta, TikTok and Google, and now Amazon joins them, with a hybrid marketplace that blends its own retail shopfront with millions of third-party sellers.

By backing the commission's view, the court made one thing clear: What matters is exposure, not what kind of transaction takes place. Anyone who browses Amazon's site, the judges said, inevitably comes across listings from outside sellers, so they all count as "active recipients." In terms of the regulation, that means users who interact with or even just view content on a platform, not only those who click "buy."

The case is one of the major tests of the EU's updated online-platform law since it took effect in February 2024. For Brussels, it's a crucial early win and a clear signal that the courts will back its push to hold massive digital players to account. For big companies, the verdict spells a warning that hybrid retail models won't shield them from regulation.

Other firms are already feeling the heat. Berlin-based Zalando lost a similar fight over its "very large platform" label, while Meta and TikTok scored partial wins in September when the same court annulled their 2023 oversight fee orders, faulting Brussels' calculation method but keeping the bills due while the system is fixed.

Together, these cases show the law's reach isn't confined to obvious tech giants. Whether it's social media, streaming or marketplaces blending retail and third-party sellers, scale alone now decides who faces the EU's toughest transparency and accountability rules.

A wider shift

The court's reasoning fits into a bigger shift in Europe's digital agenda. After years of using competition law to rein in tech power, the EU is now baking fairness and safety directly into market rules. The Digital Services Act, passed in 2022 alongside the Digital Markets Act, was meant to modernize how Europe governs the online economy, pushing platforms to be more open about their algorithms, ads and content moderation.

Under the rules, very large platforms must assess and address systemic risks each year, from unsafe products to misinformation, and show what steps they're taking to curb them. They also have to give users at least one recommendation feed not driven by profiling and maintain a public archive of every ad on their site. Companies that break the rules face fines of up to 6% of their global turnover.

Hosuk Lee-Makiyama, director of the European Centre for International Political Economy, said the ruling "confirms that EU rules prioritize convenience over a genuine risk assessment," noting that the court itself admitted case-by-case reviews would be "longer and costlier" and create "legal uncertainty."

He said the law's 45-million-user threshold "is treated as a proxy for systemic risk, even where the business model has little resemblance to the attention-based systems the DSA was designed for." That, he argued, leaves "national media and retail oligopolies untouched while penalizing those who use the single market to scale." Lee-Makiyama added that by steering clear of technical debates, the court has effectively insulated the EU's own measurement methods from challenge.

While some see the judgment as proof of Brussels favoring simplicity over nuance, others say it firmly shuts down claims of bias against U.S. tech giants.

Thomas Hppner, competition lawyer and partner at Geradin Partners, said the ruling also pushes back against claims that the act discriminates. "The General Court clearly rejects such a narrative," he said, "Treating platforms differently on the basis of their size is neither arbitrary nor inappropriate, because large platforms can generate systemic risks that typically do not arise on smaller platforms."

Hppner added that the judgment "provides a welcome reiteration of the outstanding responsibility borne by very large online platforms and gatekeepers," noting that the court reaffirmed lawmakers' broad discretion to weigh business freedoms against the goal of preventing systemic risks to society.

Brussels hails ruling, Amazon vows to fight on

A European Commission spokesperson said Brussels welcomed the ruling, noting that "the court confirmed that the DSA due diligence obligations also apply to large online marketplaces, including Amazon." The spokesperson said the judgment reinforces the law's focus on user choice and transparency by requiring non-profiling recommender options and public ad repositories.

Amazon said it was disappointed with the outcome and plans to appeal, adding that it shares the EU's goal of keeping customers safe online and "has been committed to protecting them from illegal products and content well before the DSA." 

The company maintained its stance that the "very large platform" label was meant for ad-based services that distribute information and opinions, not for marketplaces like Amazon that "only sell goods, and it doesn't disseminate or amplify information, views or opinions."

Unless the EU's top court overturns the decision, Amazon will stay bound by the bloc's highest level of oversight, joining Meta, Google and TikTok in meeting the toughest compliance checks. The company has two months and ten days to appeal on points of law to the Court of Justice of the European Union.

For Brussels, the ruling locks in legal momentum. It shows that judges are willing to give the commission wide discretion in interpreting new digital laws - a signal that future challenges from Big Tech may face an uphill climb as the DSA's enforcement framework settles into place.

Courthouse News reporter Eunseo Hong is based in the Netherlands.

Source: Courthouse News Service