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It’s the gold standard for internet regulation, even a new digital basic law: the creators of the Digital Services Act (DSA) are exaggerating by emphasizing the importance of the European set of rules for the internet. That has been struggling for months European parliamentthe Council of Ministers and the European Commission on how to put the major service providers in their place on the World Wide Web. The breakthrough came on April 23. After a final negotiation marathon, the relevant European institutions reported that they had agreed on a basic structure for the Digital Services Act.
In mid-December 2020, the European Commission presented a first draft for the DSA. 14 months later, Commission President Ursula von der Leyen said: “Today’s agreement on the Digital Services Act is historic, both in speed and content.” The basic rules for all online services in the EU would be improved. It will also ensure that the online environment remains a safe space that protects freedom of expression and opportunities for digital businesses. The rulebook puts into practice the principle that what is illegal offline must also be illegal online.
Photo: martinbertrand.fr – shutterstock.com
The Digital Services Act is intended to give the large online corporations more responsibility. “Platforms must be transparent about their content moderation decisions, prevent dangerous disinformation from spreading and prevent unsafe products from being offered on marketplaces,” announced Europe’s Digital Commissioner Margrethe Vestager. “With today’s agreement, we are ensuring that platforms are held accountable for the risks their services may pose to society and citizens.”
Competition Commissioner Thierry Breton added: “The set of rules gives the Commission oversight over very large platforms, including the ability to impose effective and dissuasive sanctions of up to 6% of global turnover or even a ban on activities in the internal market of the EU in the event of repeated serious violations.” The days of the Wild West are finally over. The DSA ended the days when the big online platforms acted like they were “too big to care”.
This is a clear message to Amazon, Facebook, Google and Co. For the first time, the DSA has a unified set of rules on the duties and responsibilities of online platforms, according to the report from Brussels. The bigger the platform, the more responsibility it has and the more tasks it has to fulfill. Specifically, it concerns the following points:
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Combating illegal content through a mandatory reporting system: Users must be able to identify and report such content. Platforms should allow collaboration with “trusted whistleblowers”.
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New rules for the traceability of business users on online marketplaces to facilitate the detection of sellers of illegal goods.
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Effective grievance mechanisms allow users to have platform operators review decisions, such as why content has been removed or not.
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More transparency of online platforms, especially with, for example, the algorithms that form the basis of the recommendation systems of the platforms.
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Obligations for very large platforms to analyze risks of misuse of their systems and take action. The risk management of the platforms is monitored by an independent party.
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Access for research to the core data of larger platforms to independently investigate how the algorithms work and what the risks are for society and democracy.
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Enforcement rules reflecting the complexity of the online space: Member States are the main players. They will be supported by a new European Digital Services Board. For very large platforms, the European Commission is responsible for monitoring and enforcement.
In principle, all companies that offer online services fall under the new rules. Think of social media providers such as TikTok, Twitter and Meta with Facebook and Instagram, but also messengers such as WhatsApp and Telegram, search engines such as Google, app store providers such as Apple and online marketplaces such as Amazon and Ebay. In addition, web hosts, internet access services and cloud providers must also comply with the new rules.
How sharply regulated at the end depends on the size of the platform. Large services that reach more than ten percent of the approximately 450 million consumers in the EU with their offers should be subject to stricter requirements than smaller providers with less than 45 million monthly active users. All providers offering online services in the EU must designate a contact person or legal representative. This should be able to slow down providers like Telegram. German authorities, in particular, have repeatedly had trouble contacting those responsible for Telegram in the pursuit of disinformation from corona deniers and conspiracy theorists.
The rules of the DSA still have a lot to say. The question of how deep the authorities’ insights into code and algorithms should be is likely to be a controversial topic. Right now, the online companies like to argue with trade secrets to protect their business. The desire to look at data to understand how online services approach their services is also likely to be met with little approval from the companies.
It will be interesting to see what Amazon, Facebook, Google and Co. say about the Digital Services Act. At the end of May, EU representatives plan to travel to the US and present the rules in detail to the major online companies. It remains to be seen whether the internet giants will succeed in relaxing regulations in one place or another.
The final text of the law is not yet final. The draft agreed by the EU bodies is currently 113 pages. This must then be officially approved by the EU Council of Ministers and the EU Parliament. That should happen in the late summer of 2022. The DSA is expected to come into effect on January 1, 2024. After a transition period of four months, all online service providers in the EU will have to comply with the new rules.
Given the ambiguity in the further proceeding, industry representatives are still reluctant to make an assessment of the DSA. As the first press releases of the three EU institutions involved – the Commission, the Council and the Parliament – differed in their respective axes, a final assessment of the agreement will only be possible once the final legal text is available, the Commission said. Federal Association of the Digital Economy (BVDW).
From the point of view of the industry representatives, a review of digital legislation and the adaptation of the European framework to the demands of the 21st century is over time. However, there is still a risk that the DSA could lead to huge restrictions for businesses in the digital economy and increased legal uncertainty.
Photo: BVDW
“If the compromise included many of the Parliament’s very restrictive provisions, it would cause massive damage to the digital economy,” said Thomas Duhr, vice-chairman of the BVDW, of the draft. “That would result in a legally uncertain merger of the DSA with the GDPR and the ePrivacy Regulation, which has yet to be finalized.”