Amazon will have to provide information about the ads running on its platform in a publicly accessible online archive after all, following a decision by the European Union’s highest court Wednesday.
The ads transparency requirement is contained in the bloc’s Digital Services Act (DSA), an online governance and algorithmic accountability rulebook, which has applied to Amazon’s marketplace since late August 2023.
Other tech giants designated under the DSA have complied with the ads transparency provision. But Amazon filed a legal challenge to its designation last year and was granted a temporary suspension on the ad library element last fall. However, on Wednesday, the Court of Justice of the EU (CJEU) reversed the September decision by the EU General Court to grant Amazon the partial suspension.
The CJEU found the European Commission, which oversees Amazon’s compliance with DSA rules for larger platforms, was denied the chance to comment on its arguments during proceedings in the lower court “in breach of the principle that the parties should be heard”, per the court’s press release.
In the judgement, the higher court went on to dismiss Amazon’s application for interim measures.
The CJEU said that while Amazon’s arguments about why it shouldn’t have to comply with publishing an ads library are expressing what may be serious concerns, they must be balanced against the interests of EU lawmakers’ and their intent in passing the law — including the risk of a delay of, potentially, several years to this element of Amazon’s compliance undermining the objectives of the DSA.
The decision is a win for the Commission and a blow to Amazon — reversing the partial stay it gained last year.
It is also a win for platform transparency as it will force Amazon to be more open about the ads it displays and monetizes.
Last year, the company failed to convince the lower court to suspend other DSA measures that apply to its recommender systems, such as a requirement that it must provide users with alternative product recommendations that are not based on tracking and profiling their web activity.
Amazon’s legal challenge to the EU’s designation of its marketplace as a so-called “very large online platform” (aka VLOP) under the DSA continues. But its compliance with the full pan-EU rulebook will be expected in the meanwhile. If it does not get with the bloc’s program it could face investigation for non-compliance and the risk of large fines, of up to 6% of global annual turnover, should the EU confirm a breach of the rules.
In a statement following the CJEU decision provided to TechCrunch, and attributed to an Amazon spokesperson, the company said:
We are disappointed with this decision, and maintain that Amazon doesn’t fit the description of a ‘Very Large Online Platform’ (VLOP) under the DSA, and should not be designated as such. Customer safety is a top priority for us at Amazon, and we continue to work closely with the EC with regard to our obligations under the DSA.