The EU General Court has upheld the European Commission’s decision to classify Stripchat as a very large online platform, establishing important limits on how technology companies can challenge the calculation of their European user numbers.

The European Union’s General Court has rejected a legal challenge to the European Commission’s classification of adult entertainment platform Stripchat under the Digital Services Act, strengthening Brussels’ authority to determine which online services must comply with the legislation’s most demanding obligations.

In its judgment delivered on 14th October, the Luxembourg-based court dismissed the action brought by Technius Ltd, the company operating Stripchat, against its designation as a very large online platform.

The dispute centred on how the Commission calculated the platform’s average monthly active users in the European Union, which determines whether additional regulatory obligations apply.

Under the Digital Services Act, platforms exceeding 45 million monthly active recipients in the EU are subject to enhanced supervision, including requirements concerning systemic risks, transparency, content moderation and independent auditing.

The judgment addresses a fundamental question for European digital regulation: whether companies can exclude particular categories of website visits when calculating the number of people using their services.

How Brussels challenged the platform’s figures

In February 2023, Technius reported that Stripchat had approximately 31.8 million average monthly active recipients in the EU, placing it below the threshold for very large online platforms.

The company relied on information provided by Similarweb, a commercial service measuring website traffic and user behaviour.

However, the Commission questioned the methodology used to reach that figure. Technius had discounted certain visits on the grounds that users entered the website but departed without engaging with its content.

Such visits are commonly described as bounced visits and frequently appear in commercial website analytics.

The Commission concluded that the company’s deductions had significantly underestimated its audience because the original Similarweb calculation of unique visitors already incorporated a filtering process excluding many bounced visits.

On that basis, Brussels calculated that Stripchat had more than 62 million monthly unique visitors in the EU, well above the statutory threshold.

The Commission consequently designated the platform as a very large online service on 20th December 2023. Technius challenged the decision, arguing that the figures were unreliable and that the absence of a prescribed calculation methodology undermined legal certainty.

The EU General Court rejected both arguments.

Court rejects challenge to calculation methodology

According to the court’s official explanation, the Commission had adequately explained its calculation and was entitled to rely on the data available when the designation decision was adopted.

The judges found that Technius had effectively applied deductions to figures from which relevant traffic had already been filtered, producing an artificially reduced estimate of active recipients.

The judgment also addressed a potentially significant complication.

After the Commission adopted its decision, Similarweb revised its methodology. Using the corrected method, Stripchat’s estimated monthly active audience for the relevant period was approximately 37.3 million.

That figure was below the threshold for classification as a very large online platform. Nevertheless, the court held that the subsequent correction did not invalidate the original designation.

The judges determined that the Commission’s decision had to be assessed according to the facts, applicable law and permissible evidence available when the decision was taken.

The ruling therefore does not establish that Stripchat currently exceeds 45 million monthly users. It confirms that the later recalculation was insufficient to annul the Commission’s December 2023 decision.

A significant precedent for digital regulation

The consequences extend beyond one adult entertainment website.

The Digital Services Act covers online intermediaries operating in the European market, including social networks, marketplaces, hosting services and other platforms.

Its obligations increase according to the size and nature of a company’s operations. Very large online platforms must assess systemic risks associated with their services, introduce appropriate mitigation measures and submit to independent audits.

The Commission is responsible for supervising their additional obligations and can impose substantial financial penalties for established infringements.

The distinction between the two categories can therefore have considerable financial and operational consequences.

Companies falling below the 45 million threshold remain subject to relevant DSA obligations but do not face the same additional requirements imposed on the largest platforms.

The General Court’s ruling confirms that companies cannot escape designation by applying an unreliable interpretation of website traffic data.

At the same time, the Commission’s published supervisory framework allows a designation to be revoked when a platform remains below the threshold for a full year.

European technology enforcement faces growing scrutiny

The judgment comes as the Commission faces multiple legal challenges to its enforcement of Europe’s digital legislation.

As EU Today previously reported, Washington has sought to intervene in proceedings concerning the Commission’s €120 million Digital Services Act fine against X, introducing an additional diplomatic dimension to European regulatory disputes.

The Commission is also pursuing separate investigations into whether major platforms comply with obligations concerning the protection of minors, advertising transparency and the management of illegal content.

In another case examined by EU Today, Brussels reached preliminary findings concerning TikTok’s default privacy settings for children, illustrating the practical consequences of the stricter duties imposed on very large online platforms.

The Stripchat judgment concerns designation rather than a finding that the company breached any substantive safety obligation. Its immediate consequence is to preserve the Commission’s original classification decision.

Technius may still appeal to the Court of Justice of the European Union on points of law within two months and ten days of notification of the judgment.

For European regulators, the decision provides judicial support for using established commercial analytics when assessing the reach of online platforms, provided that the methodology is adequately explained and the underlying evidence is reliable.

For technology companies, it confirms that the legal assessment of user numbers extends beyond the figures they choose to report to Brussels. The Commission can scrutinise those calculations and reject methods that fail to provide a reliable estimate of an online service’s European audience.

EU finance ministers have approved a compromise that would expand the European Securities and Markets Authority’s powers while exempting some major trading venues from centralised oversight. The agreement reflects continuing resistance to transferring financial supervision from national authorities to Brussels.

European Union finance ministers have reached an agreement to expand centralised supervision of financial markets, but Germany has secured provisions allowing important parts of Deutsche Börse to remain under national oversight, substantially narrowing the European Commission’s original reform proposals.

The compromise, agreed at a meeting in Luxembourg on 9 October, would transfer responsibility for supervising selected trading venues, clearing houses and securities settlement institutions to the European Securities and Markets Authority (ESMA).

However, the agreement introduces exemptions and thresholds that reduce the number of institutions automatically subject to direct European supervision.

The result is a significant political compromise between governments seeking deeper financial integration and those reluctant to surrender oversight of nationally important market operators.

Berlin secures its exemption

The most contentious element of the negotiations concerned Deutsche Börse, the German financial-market group that operates the Frankfurt stock exchange and provides trading, clearing and other financial infrastructure services.

Germany opposed arrangements that would place all major market operators under direct ESMA supervision, arguing that institutions with predominantly domestic activities should continue to be regulated nationally.

The agreed compromise refines the criteria for determining which trading venues qualify for centralised oversight.

These conditions allow certain Deutsche Börse operations to remain outside the new supervisory regime.

The exemption had already become a point of contention during negotiations among European governments.

As EU Today reported in June, Berlin had sought to protect Deutsche Börse from mandatory European supervision despite Germany’s broader support for integrating EU capital markets.

The October agreement formalises a narrower approach within the Council’s negotiating position, although the legislation remains subject to approval by the European Parliament.

Europe’s fragmented financial markets

The European Commission has repeatedly argued that fragmented national supervision weakens the EU’s ability to compete with financial markets in the United States.

Although the Union operates a single market, many financial institutions continue to face differing regulatory interpretations, procedures and supervisory relationships across member states.

These differences can increase operating costs and discourage financial businesses from expanding across borders.

The Market Integration and Supervision Package is intended to simplify those arrangements and strengthen common oversight of financial infrastructure with significant cross-border activity.

Under the Council’s position, ESMA would assume direct supervision of selected trading platforms and institutions involved in clearing and securities settlement.

Such institutions perform essential functions in financial markets, including managing transactions, transferring securities and controlling risks between counterparties.

Differences in supervisory arrangements can complicate the operation of financial services that increasingly function across national borders.

The Commission argues that greater consistency would allow European capital to move more efficiently between member states and provide businesses with improved access to investment.

Compromise reduces original ambitions

The Commission’s original approach envisaged broader centralisation of supervisory responsibilities.

The Council agreement of 9 October introduces more restrictive criteria governing the institutions that would fall under ESMA’s direct authority.

In addition to the treatment of trading venues, ministers agreed that direct supervision of crypto-asset service providers should initially concentrate on businesses with the most significant cross-border operations.

The Council also supported changes to ESMA’s governance arrangements, including the creation of a full-time executive board.

The proposed board would strengthen the authority’s ability to make supervisory decisions independently of individual national regulators, while preserving mechanisms for cooperation with those authorities.

The compromise also introduces arrangements allowing national supervisors collectively to challenge certain decisions.

These provisions reflect concerns about concentrating regulatory powers within an institution that must oversee financial businesses operating under different national legal systems.

Why capital markets matter for European investment

The supervision reforms form part of the EU’s broader Savings and Investments Union initiative.

European policymakers want to increase the availability of private capital for companies investing in technology, defence, infrastructure and industrial development.

The Union has substantial household savings, but much of that money remains in bank deposits or is invested outside the European economy.

Companies seeking capital for expansion may consequently face higher financing costs or more limited investment opportunities than comparable businesses operating in larger and more integrated markets.

The Commission’s Savings and Investments Union programme seeks to improve access to finance and make cross-border investment more attractive.

Financial-market supervision represents only one element of that programme.

Differences in taxation, insolvency law, national investment products and corporate governance requirements also influence where investors allocate their money.

Nevertheless, regulators regard consistent supervision as an important condition for reducing fragmentation.

Parliament faces a political decision

The agreement reached by finance ministers does not conclude the legislative process.

The European Parliament must adopt its position before negotiations can determine the final provisions.

Parliamentary discussions could revisit the exemptions secured by Germany and the criteria determining which institutions fall under direct ESMA supervision.

The debate will expose differences over whether European financial integration should proceed through incremental reforms or a more substantial transfer of regulatory authority.

Governments supporting national exemptions argue that supervision should reflect the actual geographic scope of a company’s activities.

Supporters of broader European oversight contend that major trading businesses can influence financial markets beyond their home jurisdictions even when individual operations appear predominantly domestic.

The Deutsche Börse exemption has become a prominent example of the conflict between those positions.

Europe’s largest economies broadly support the objective of deeper capital markets, but remain divided over the institutional powers needed to achieve it.

The final legislation will determine whether the expanded responsibilities granted to ESMA are sufficient to reduce fragmentation or leave important parts of Europe’s financial infrastructure operating under substantially different national supervisory systems.

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