The European Union’s Digital Services Act (DSA) has been making waves in the tech industry. This landmark legislation demands that digital companies take responsibility for tackling illegal and problematic content. With the law already applying to very large platforms and set to expand its reach to all companies, it has become crucial for businesses to understand its key elements and implications.
Priorities for Platforms
One of the main obligations under the DSA is the quick removal or restriction of illegal content once platforms become aware of its presence. Platforms must also notify the relevant authorities promptly if they suspect a criminal offense that poses a threat to individuals’ lives or safety. Additionally, companies are required to publish annual reports detailing their actions taken for content moderation and the timeliness of their responses to notifications of illegal content. Dispute resolution decisions with users must also be reported.
The DSA introduces stricter measures for combating illegal content and promoting user safety. Platforms are now required to suspend users who frequently share illegal content, such as hate speech or fake advertisements. Online shopping sites must take steps to verify the identities of users and prevent repeat fraudsters from accessing their platforms.
Tougher Rules on Targeted Advertising
The DSA places greater regulations on targeted advertising, especially for children aged 17 and under. Platforms are banned from running targeted ads based on sensitive data, such as ethnicity, religion, or sexual orientation. This move aims to protect vulnerable groups and provide users with more control over the use of their personal data.
Small companies, defined as those with fewer than 50 employees and a turnover of less than 10 million euros, are exempt from the more onerous obligations of the DSA. This exemption acknowledges the potential challenges that smaller businesses may face in complying with the extensive requirements of the legislation. However, it is important for these companies to stay informed and adapt to future regulatory changes.
The EU has identified 22 “very large” platforms, including tech giants like Apple, Amazon, Facebook, Google, Instagram, Microsoft, Snapchat, TikTok, and clothing retailer Zalando. Three major adult websites are also included in this list. Notably, both Amazon and Zalando have launched legal challenges against their designations while Meta and TikTok are contesting the fee for enforcement. These platforms face additional measures such as assessing risks associated with illegal content and privacy breaches, implementing improved content moderation, and providing regulators with access to their data.
To ensure compliance with the DSA, platforms are subject to annual audits conducted by independent organizations at their own expense. Additionally, they must establish independent internal supervisors to monitor their adherence to the rules. Non-compliance can result in fines of up to six percent of a company’s global turnover. For repeated violations, the EU has the authority to ban offending platforms from operating in Europe. The DSA also facilitates users’ complaints by allowing them to lodge grievances with their competent national authorities if they believe a platform is violating the legislation.
Under the DSA, each of the EU’s 27 member states must designate a competent authority responsible for investigating and sanctioning smaller companies that violate the legislation. These authorities must collaborate with each other and the European Commission to enforce the regulation effectively. While the enforcement of the rules for digital platform providers is primarily the responsibility of their home country, very large platforms come under the direct supervision of the European Commission.
The Digital Services Act represents a significant development in legislation surrounding digital platforms and the responsibilities they hold. By addressing issues such as illegal content, privacy infringements, and targeted advertising, the EU aims to create a safer and more transparent online environment for users. While the DSA presents challenges for tech giants and online marketplaces alike, it also provides an opportunity for these platforms to demonstrate their commitment to user safety and responsible business practices.
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