European Union: NKL Associates filed lawsuit against the European Commission alleging unlawful advertising transparency obligations

On 20 September 2024, NKL Associates s.r.o. filed an action before the General Court of the European Union against the European Commission. The application seeks partial annulment of Commission Decision C(2024) 4936 of 10 July 2024, which designated the adult-content platform XNXX as a very large online platform (VLOP) under Article 33(4) of the Digital Services Act (Regulation (EU) 2022/2065). The action challenges the obligations arising from Article 39(1) DSA, which require VLOPs displaying advertisements to provide a publicly accessible, searchable repository of all advertising presented on their interfaces, maintained for one year after each ad’s last display. NKL Associates argues that the obligation infringes fundamental rights protected by the Charter of Fundamental Rights of the European Union, including the rights to privacy and data protection (Articles 7 and 8), the freedom to conduct a business (Article 16), and the right to property (Article 17). The applicant contends that the rule imposes disproportionate burdens and jeopardises the confidentiality of commercial information belonging to both the platform and its advertisers. The company requests that the Court declare Article 39 DSA partially inapplicable insofar as it requires publication of the advertising repository and order the Commission to pay costs.