In a decision that will have significant implications for the digital marketplace, the Court of Justice of the European Union has ruled that Amazon must comply with the bloc’s Digital Services Act (DSA), including the requirement to publish an ads library.
The ads transparency provision, which has been in effect since late August 2023, requires Amazon to provide information about the ads running on its platform in a publicly accessible online archive. This is part of the DSA’s efforts to govern and hold accountable the algorithms used by online platforms.
Previously, Amazon had filed a legal challenge against its designation as a “very large online platform” (VLOP) under the DSA and was granted a temporary suspension on the ad library element. However, the CJEU has now reversed the September decision by the EU General Court to grant Amazon the partial suspension.
The CJEU cited the European Commission’s inability to comment on Amazon’s arguments during proceedings in the lower court as a violation of the principle of fair hearing. As a result, Amazon’s application for interim measures was dismissed.
Although the company’s concerns about the ad library requirement may be valid, the CJEU emphasized the importance of balancing these concerns against the intent of EU lawmakers in passing the DSA. The ruling is seen as a victory for platform transparency and accountability in the EU, as Amazon will now be forced to provide more information about the ads it displays and monetizes.
It is also worth noting that last year, Amazon failed to convince the lower court to suspend other DSA measures, such as the requirement for alternative product recommendations that do not rely on user tracking and profiling.
Despite this setback, Amazon’s legal challenge to its VLOP designation under the DSA is ongoing. However, the company will still be expected to comply with the full pan-EU rulebook in the meantime. Failure to do so may result in a non-compliance investigation and the possibility of hefty fines, up to 6% of its global annual turnover, if found to be in breach of the rules.
In a statement provided to TechCrunch, an Amazon spokesperson acknowledged the CJEU’s decision and stated, “We are committed to complying with the DSA and will continue to work with the European Commission to ensure our marketplace operates in a fair and transparent manner for all our customers.”
