Swift Political Agreement on the Digital Service Act by the European Union
On April 23rd 2022, the European Parliament and European Union member states reached an agreement on the Digital Service Act that the Commission had proposed in December 2020. The DSA brings in a new set of rules in regulation of the responsibilities held by digital services.
The Act is an intermediary within the EU to connect consumers with goods and services on online platforms such as social media platforms and marketplaces. It also monitors and gives accountability to the online platforms regarding transparent advertising, illegal and harmful content. The DSA creates a safer digital space by protecting consumers’ fundamental rights and enables a fairground to conduct businesses through innovation, growth, and competitiveness globally and in the European market.
The new framework in the DSA has a basis on European values, such as respect for human rights, freedom, democracy, equality and the rule of law. It will create a balance of rights and responsibilities for users, online intermediaries, online platforms, and public authorities. DSA contains EU-wide due diligence obligations that will apply to all digital services.
Providers covered by the Digital Service Act
The Digital Services Act obligations apply to different online critical players from their role, size and impact on the online ecosystem, as listed below.
They offer network infrastructure to internet access providers and domain name registrars.
They entail cloud and web hosting services.
They bring together sellers and consumers in online marketplaces, app stores, joint economic platforms and social media platforms.
Very large online platforms
These are platforms with a reach of more than 10% of 450 million consumers in Europe.
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New Measures in the Digital Service Act
The new measures and obligations are majorly to enhance innovation, growth, and competitiveness while uplifting small platforms, start-ups, and SMEs online. Let’s discuss them in detail below.
Mechanism to counter illegal online content
The DSA has put in place measures and obligations to deal with illegal goods, services or content. It will be through the use of trusted flaggers and experts nominated by national authorities, who will collaborate with the online platforms. The Act has put in place new strict requirements on removing illegal content, as the platforms moderate harmful but legal content by observing terms and conditions.
With the use of new tools, public authorities will remove unsafe products from the marketplace. Large online platforms will have audited risk assessments to analyze their vulnerability to illegal goods on their platforms and measures they have put in place to counter this. In the DSA, there is an obligation on traceability to protect business users in the online marketplaces. The new rules will ensure transparency in advertising online content and eliminate targeted advertising created by gathering personal data on minors and religious or political profiling.
Risk management and crisis response
DSA has stricter rules for running online platforms with a large following of over 45 million users as they have a significant impact on society. Large online platforms will go through regular risk assessments on issues like disinformation, deceptive content, and inappropriate graphics. If they score poorly in audits due to issues like breach of the regulation and failure to observe terms and conditions, they risk paying fines of up to 6% of their worldwide turnover.
Through the negotiations, emerging issues like the war in Ukraine resulted in crisis response mitigations put in place. Online platforms will be required to remove war propaganda content and only take orders mandated by the European Commission. Large online platforms like Google and Facebook with significant search engines must design their systems to tackle the risks of disinformation by use of Independent auditing on risk management for their algorithmic systems
The new DSA obligation is to create a safer and transparent digital space by protecting users’ fundamentals, create fair, competitive grounds for users to conduct businesses, and access quality digital services at reasonable prices. There may be a misuse of algorithms to profile users in platforms by optimizing information that captures users’ attention and generates revenue without their awareness. Manipulating systems is abuse of advertising systems that can lead to disinformation and the spread of illegal content.
The obligations include transparency on the rules for content moderation and meaningful information, a framework for precise information, and why content is recommended to users. Users’ will have a right to opt-out from content suggestions based on personal profiling. Authorities and researchers will access data on the platforms to assess the impact on society.
European Union member countries will have the primary role of supervising and carrying out enforcement on all large platforms. The new European Board will fully support the function of Digital Services. According to the proposal, national authorities will have oversight on smaller medium platforms, while for the large ones, the EU will have exclusive power according to the DSA.
If any large platform has persisting infringements, the Commission will initiate proceedings to deal with the arising matters. It can be through recommendation by the EU Oversight Board or invitation from the Digital Services Coordinator. It will ensure speedy intervention and resolutions to the EU-wide cases. EU executives will charge platforms a supervisory fee proportional to the size of the service and not exceeding 0.05% of its worldwide annual net income.
Some substantive obligations are only applicable to massive online platforms, which have a central role in enabling public opinion and economic transactions. Very small platforms will be exempt from the majority of obligations.
Implementation of the DSA
Upon the Act being adopted formally by the EU co-legislators, it will be published in the Official Journal of the European Union. A twenty days implementation period will begin. The DSA will apply in all EU member states for 15 months from January 1st 2024. DSA obligations on large online platforms with large online search engines will commence four months after the designation from the authorities is complete.