Digital Services Act: New Standards for Online Businesses
The European Union’s Digital Services Act (DSA) came into force on February 17, 2024. It is set to impose a comprehensive set of obligations on digital platforms and e-commerce businesses and aims to create a safer and more transparent online environment by enforcing rules against illegal content and products, with a strong emphasis on the protection of minors.
Platforms are now required to ensure a high level of privacy, safety, and security for children, including a ban on using their data for targeted advertising. The DSA represents a significant step in the EU’s efforts to regulate the digital space, with penalties for non-compliance reaching up to 6% of a company’s global annual turnover.
The scope of the DSA is broad, targeting not only large tech companies but also smaller platforms and digital services providers. While “micro” and “small” enterprises, defined as those employing fewer than 50 staff and with an annual turnover below €10 million, are exempt from most provisions, they are still obligated to adhere to specific requirements such as setting clear terms and conditions and providing a contact point for authorities. This inclusive approach ensures that all players in the digital market are accountable, promoting a fairer and more competitive ecosystem.
As the DSA comes into full effect, major technology platforms face the strictest level of regulation. These platforms, including those designated as very large online platforms (VLOPs) and very large online search engines (VLOSEs), have already encountered a set of compliance deadlines focused on algorithmic transparency and risk mitigation. With the general obligations now expanding, these entities must adapt to additional demands, such as content moderation transparency, cooperation with trusted flaggers, and adherence to business traceability requirements. The EU’s proactive stance on digital governance is clear, as it seeks to collect extensive data on content moderation practices to refine its oversight capabilities further.
The enforcement of the DSA is decentralized, with Digital Services Coordinators (DSCs) at the Member State level playing a crucial role in monitoring compliance. This new layer of oversight introduces additional complexity for platforms operating within the EU, as they navigate both the DSA and other relevant laws such as the General Data Protection Regulation and the upcoming AI Act. The DSA’s full application signals a significant shift in the digital regulatory landscape, underscoring the EU’s commitment to establishing a safer, more accountable online world. As platforms adjust to these changes, the legal and operational challenges ahead will undoubtedly shape the future of digital commerce and services in Europe.
