The Digital Services Act: Recent enforcement actions and what they mean for retail

The European Union’s Digital Services Act (DSA) which came into force on 17 February 2024, is already reshaping the regulatory landscape for online retail platforms. 

Recent enforcement actions by the European Commission (the Commission) demonstrate that the retail sector – from fashion marketplaces to social commerce platforms – faces unprecedented scrutiny on how they manage illegal content, protect consumers, and maintain transparency. These recent decisions illustrate the Commission’s robust approach to DSA enforcement. In this article, we set out what retail platforms must prioritise to remain compliant.

Temu: Preliminary findings on inadequate risk assessment  

On 28 July 2025, the Commission made a preliminary finding that Temu had breached its DSA obligations under Article 23 to properly assess the risks of illegal and unsafe products being sold on its marketplace.

A Commission mystery shopping exercise found that consumers were very likely to encounter non-compliant products, including baby toys and small electronics – categories where safety standards are particularly critical for consumer protection.

According to the Commission, Temu’s risk assessment of October 2024 was inaccurate and relied on general industry information rather than on specifics of its own marketplace. This approach may have led to the roll out of inadequate mitigation measures against illegal products.

If the Commission’s preliminary views are confirmed, the Commission are likely to adopt a non-compliance decision finding that Temu is in breach of Article 34 of the DSA, potentially resulting in a fine of up to 6% of Temu’s total worldwide annual turnover and an order to take measures to address the breach. 

Shein: Commission requests information on transparency and risk management

In February 2025, the Commission sent a request for information (RFI) to online fast-fashion retailer Shein. They requested Shein to provide internal documents and more detailed information on risks linked to the presence of illegal goods and content on its marketplace, transparency of its recommendation systems, data access for qualified researchers, and initiatives to safeguard consumer rights, public health and user wellbeing.

Shein responded to the RFI and indicated that they share the Commission’s goal of ensuring EU consumers can shop online with confidence.

However, as recently as 6 November 2025, the French Prime Minister called on the Commission to investigate Shein, accusing the company of allowing third-party sellers on its marketplace to trade in illegal products. This controversy emerged shortly after Shein opened their first physical store in BHV, a luxury Department Store in Paris. Following the shop’s opening, the French government escalated its concerns by calling for the suspension of Shein’s online platform until the company complies with French legislation. 

Zalando v Commission: Defining VLOP status for retail marketplaces

The General Court’s October 2025 judgment in Zalando v Commission (Case T-348/23) established important precedents for classifying retail platforms under the DSA’s tiered regulatory framework. The “very large online platform” (VLOP) designation pursuant to Article 33 of the DSA, subjects the platform to additional obligations, particularly to protect consumers and combat the publication of illegal content.

Zalando challenged the Commission’s April 2023 designation of its fashion and beauty marketplace as a VLOP – a classification that triggers enhanced regulatory obligations. The Commission determined that the average monthly number of active recipients (AMAR) of the Zalando platform in the EU exceeded 83 million, well above the threshold of 45 million (or 10% of the EU population). Zalando argued that only 30 million users engaged with the third-party sellers through its Partner Programme, and therefore these users shouldn’t count towards the 45 million threshold. The Commission, however, determined that over 83 million monthly active users should be counted.

The General Court sided decisively with the Commission, establishing the following principles:

1. Dual nature of platforms: The Court recognised that Zalando operates as an 'online platform' under the DSA only insofar as third party sellers’ market products through its Partner Programme, but not for Zalando’s direct retail operations. This distinction matters for understanding which activities trigger platform obligations. 
2. Calculating exposure: The Court held that when a platform cannot distinguish between users exposed to third-party sellers’ content, and those who are not, the Commission is entitled to deem all users as having been exposed.
3. Risk: The Court emphasised that the fact marketplaces can facilitate the marketing of dangerous or illegal products to significant portions of the EU population, this alone justifies enhanced obligations imposed on VLOPs.

Overall impact on the retail sector

The impact that the DSA and the Commission’s findings have on the retail industry are significant. Retail platforms operating marketplace models alongside direct sales must expect VLOP designation if their total user base exceeds the threshold, regardless of what proportion actually engages with third-party content. 

Failure to adhere to the rules has resulted in significant fines. Mystery shopping exercises demonstrate the Commission’s willingness to conduct practical testing of platform compliance. Most recently the French government’s call for the suspension of Shein’s online platform until it complies with national legislation shows how seriously member states are taking DSA enforcement and their readiness to pursue action against non-compliant platforms

It is clear that as social commerce and hybrid retail platforms expand, they must ensure users can easily report illegal products and sellers and effectively appeal content moderation decisions with supporting evidence.