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European Union Digital Services Act

  Apr 28, 2023

European Union Digital Services Act

Q What is the Digital Services Act , and to whom will it Apply?

  • As defined by the EU Commission, the Digital Services Act is “a set of common rules on intermediaries’ obligations and accountability across the single market”, and ensures higher protection to all EU users, irrespective of their country.
  • Objective: The Digital Services Act will tightly regulate the way intermediaries, especially large platforms such as Google, Facebook, and YouTube, function when it comes to moderating user content.
  • Self Regulation Era is Over: Instead of letting platforms decide how to deal with abusive or illegal content, the Digital Services Act will lay down specific rules and obligations for these companies to follow.
  • Applicability: According to the EU, Digital Services Act will apply to a “large category of online services, from simple websites to Internet infrastructure services and online platforms.”
    • The obligations for each of these will differ according to their size and role.
    • The legislation brings in its ambit platforms that provide Internet access, domain name registrars, hosting services such as cloud computing and web-hosting services.
    • However, more importantly, Very Large Online Platforms (VLOPs) and Very Large Online Search Engines (VLOSEs) will face “more stringent requirements.”
      • For example, any service with more than 45 million monthly active users in the EU will fall into this category.
      • Those with under 45 million monthly active users in the EU will be exempt from certain new obligations.
  • Implementation: Once the Digital Services Act becomes law, each EU Member State will have the primary role in enforcing these, along with a new “European Board for Digital Services.”
    • The EU Commission will carry out “enhanced supervision and enforcement” for the VLOPs and VLOSEs.
    • Penalties for breaching these rules could be huge — as high as 6% of the company’s global annual turnover.


Q What do the new Rules State?

  • New Procedures for Faster Removal: Online platforms and intermediaries such as Facebook, Google, YouTube, etc. will have to add “new procedures for faster removal” of content deemed illegal or harmful.
  • Impose a Duty of Care: Marketplaces such as Amazon will have to “impose a duty of care” on sellers who are using their platform to sell products online.
    • They will have to collect and display information on the products and services sold in order to ensure that consumers are properly informed.
  • Auditing Mechanism: The Digital Services Act adds “an obligation for very large digital platforms and services to analyze systemic risks they create and to carry out risk reduction analysis”.
    • This audit for platforms like Google and Facebook will need to take place every year.
  • Independent Researchers: The Act proposes allowing independent vetted researchers to have access to public data from these platforms to carry out studies to understand these risks better.
  • Ban Misleading Interfaces: The Digital Services Act proposes to ban ‘Dark Patterns’ or “misleading interfaces” that are designed to trick users into doing something that they would not agree to otherwise.
  • Crisis Mechanism: The Digital Services Act incorporates a new crisis mechanism clause — it refers to the Russia-Ukraine conflict — which will be “activated by the Commission on the recommendation of the board of national Digital Services Coordinators”.
    • However, these special measures will only be in place for three months.
  • Transparency Measures: It also proposes “transparency measures for online platforms on a variety of issues, including on the algorithms used for recommending content or products to users”.