On 23 April 2022, EU Parliament and Council reached a provisional political agreement on the Digital Services Act (DSA). Together with the Digital Markets Act, the DSA is to set standards for a safe and more open digital space for users as well as equal competitive conditions for enterprises.
Based on the DSA, Europe follows the principle that what is illegal offline should be illegal online. The goal is to prevent the spread of illegal content in the digital space and to protect users’ fundamental rights. The Act shall apply to all online intermediaries providing services in the EU.
The DSA will introduce stricter rules for large online platforms with more than 45 million users in the EU. Smaller enterprises below this threshold shall be exempted from certain obligations. Large online platforms will be required to conduct regular assessments of systemic risks such as disinformation or deceptive content, implementing appropriate mitigation measures subject to independent audits. Any infringement or failing of audits shall entail fines of up to 6 percent of the global turnover.
The DSA establishes stricter requirements for the removal of illegal content and establishes so-called “trusted flaggers” for doing so. This is a group of experts, which is nominated by national authorities and to whom platforms have to react immediately. The new provisions also provide for a number of transparency obligations for promoted content, which must be clearly labelled as such. Targeted advertising based on personal data of minors will be banned, as will profiling based on sensitive data such as political views or religious beliefs. AK rejects targeted advertising as a matter of principle and regards the DSA as a missed opportunity in this context. In future, platforms shall only be obliged to provide information as to how they use their recommender systems to personalise contents for users. Apart from that, very large online platforms shall have to provide an alternative recommender system not based on profiling.
In the context of Russia’s war of aggression against Ukraine and the particular impact on the manipulation of online information, a new article has been added to the text introducing a crisis response mechanism. It would enable the EU Commission to mandate very large online platforms to take specific measures in a crisis, such as the removal of disinformation.
In accordance with the provisional agreement, stricter information and monitoring requirements for online marketplaces shall be enforced. Traders shall only get access to their services after they provide basic information. Platforms shall be encouraged to do their best to verify such information. The DSA also provides for a ban on dark patterns to ensure that users can make a free and informed choice rather than being manipulated into doing something.
The EU Commission will have exclusive competencies when supervising very large platforms and search engines such as Google, Facebook or Amazon, whilst national authorities will supervise smaller platforms. Micro and small enterprises will be exempted from a number of obligations, such as traceability of traders, notification of criminal offences, transparency requirements, etc., for one year. After three years, the EU Commission will assess the DSA’s impact on SMEs and support them in their compliance efforts financially.
First assessments from consumers’ point of view
Overall, the DSA is good news for consumers, even if there is still room for improvement. From AK’s point of view, the DSA falls short of the expectation of more platform responsibility. Nevertheless, in future, online marketplaces will have to be more careful as to whom they let access their platform to keep away dubious third party providers. Some restrictions regarding the use of dark patterns and ad tracking should also make manipulating users’ behaviour more difficult. Ursula Pachl, Deputy Director General at the European Consumer Organisation (BEUC) argues in the same direction: she also criticises that legislators have once again missed the opportunity to establish liability obligations of online marketplaces. For Alexandra Geese of the Greens, the DSA is “the start of a digital spring and the first, decisive step towards democracy and freedom online.” The Federation of German Consumer Organisations too welcomes that personal data of minors may no longer be used for targeted advertising.