10/11/2023Regulation

The Digital Services Act: A Restraint on Internet Giants?

On November 16, 2022, the Digital Services Act (legislation on digital services) was adopted by the European Parliament. Its purpose is to establish a protective legislative framework for platform users. In practice, its obligations will (normally) come into effect only from February 17, 2024.

The DSA (Digital Services Act), or legislation on digital services, is a major legislative proposal by the European Union aimed at regulating digital services through varying obligations based on the actors involved.

This regulation targets all online intermediaries offering their services in the European market:

Internet service providers (ISPs): Orange, SFR, etc.
Data hosts (data centers, cloud services, for example: Amazon Web Services, Microsoft Azure...)
Marketplaces, application stores, social networks, content sharing platforms, online travel, and accommodation services: Amazon Store, Booking...
Very large online platforms and search engines.

To identify actors in this last category, the European Commission has set a criterion: at least 45 million active users per month.

It has thus published a list of 17 very large online platforms and 2 very large search engines meeting this criterion.

For example, Amazon Store, Apple AppStore, TikTok, and Google Search fall under this regulation. For these platforms, the regulation has been applicable since August 25, 2023.

What does this new regulation bring?

Fighting against illicit content by enabling users to better report such content.

X Twitter Form for Illicit Content — Example of a form to report illicit content on the social network X (formerly Twitter).

Online transparency, both in online complaint handling and in the functioning of algorithms.
Online protection for minors, including the prohibition of targeted advertising.
Implementation of more specific measures, allowing individuals to better understand advertising targeting them.

How will these companies be monitored? What sanctions do they face?

Concretely, the Commission foresees sanctions of up to 6% of the companies' annual turnover in case of non-compliance with these obligations... even a ban from operating in the European market.

To ensure compliance with these provisions by the relevant actors, the Commission plans to monitor them. To finance this monitoring, the companies concerned will have to pay an annual fee (which cannot exceed 0.5% of their annual turnover).

These platforms or providers will also have the duty to prevent systemic risks (such as the spread of hateful content by users) arising from the design or operation of their services. This will be achieved through the implementation of the relevant risk assessment measures and independent audits. These assessments, to be conducted once a year, will allow them to understand the factors amplifying these risks and how to mitigate them.

Key Points

The Digital Services Act (legislation on digital services) constitutes the European Commission's response to the growing concerns of the population regarding the regulation of the digital space and the responsibility of the actors. Ensuring respect for fundamental rights and freedoms on the internet promotes a more ethical and responsible digital sphere.

This is not the first time the Commission has tackled major platforms. This was notably the case with the Digital Market Act (regulation on digital markets), published in the same timeframe, which targets major actors in the European market.

However, the effectiveness of these regulations will largely depend on how they are implemented and the response provided by the Member States.