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The Digital Services Act (DSA): yet another set of obligations for businesses providing services in the EU?

Publications | Thomas Charon

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In 2020, the European Union introduced their strategy for Europe’s Digital Future. Since then, the Union has focused on making the transformation towards a more digital Europe ‘work for people and businesses, while helping to achieve its target of a climate-neutral Europe by 2050’. By doing so, the Commission proposed in relation to digital services a ground-breaking new legislative regulation: the Digital Services Act (DSA), introducing ‘a common set of rules on intermediaries' obligations and accountability across the single market’. Recently, on the 5th of July 2022, almost 18 months after the Proposal was first published, the European Parliament officially adopted the legislative act whereas earlier this month, on the 4th of October, the European Council followed the Parliament’s decision in its first Competitiveness Council meeting, almost settling the DSA as a ‘done deal’.

The realisation of such legislative act is no surprise. As the enormous expansion over the last decades of new technologies, such as digital platforms and other applications of data, has introduced new opportunities and innovations, law inevitably has to follow, resulting in yet another set of obligations laid down from the supranational level on businesses performing their services in the EU. The question at hand however, according to stakeholders, remains whether the new legislative act will not lead to overregulation, making it law-after-law more difficult to fulfil all requirements of the European regulatory framework.

According to the European Commission, the term ‘digital services’ encompasses a large number of services that contain an online element, diverging from ‘simple websites’ to ‘internet infrastructure services and online platforms. In short, a digital service contains two main elements, being the delivery via the internet or another electronic network to a receiver in an automated way and the need for no to little human intervention. Therefore, similar to the GDPR, the DSA will apply to a very broad spectrum of businesses, namely all online intermediaries/platforms that offer services within the Union, as long as the recipient is situated in the Union. As such, non-EU companies will have to appoint a legal representative in the Union to ensure a level playing field within the Single Market.

Due to its large scope of application, a lot of businesses will be forced to adapt to the new regulation, based on their place in the act’s provided taxonomy. Intermediary services, hosting services and (very large) online platforms will each have to comply with their own new set of asymmetrical designed obligations, with very large online platforms as the smallest group with the most extensive set of rules. SME’s on the other hand will face obligations proportionate to their size, impact, role and ability, while large enterprises will be subject to a stricter set of rules. Think of risk preventing measures, transparency increasing obligations on online advertisements or provisions against illegal content. Whether or not these rules apply will depend on the size of the company.

With the recent adoption of both the Parliament and the Council, the only question that remains is when this new set of rules will come into force. First, the act will need to be published in the EU Official Journal, entering into force the very earliest twenty days after publication, but more likely around Christmas. Since the legislator opted for a regulation, the DSA will be directly applicable across the EU, which results that in early 2024 we can expect the application of the rules for all relevant parties (except for very large online platforms who will have to conform with the obligations already one year earlier).

If you have any questions or want more information on your obligations under the Digital Services Act, please do not hesitate to contact Steven De Schrijver or Thomas Charon.