Digital Services Act

THE NEW DIGITAL SERVICES LEGISLATION: WHAT IT IS AND WHAT THE EUROPEAN REGULATION PROVIDES

OVERVIEW AND SCOPE

On July 5th of last year, the European Parliament approved the Digital Services Package, a set of two measures consisting of the Digital Markets Act and the Digital Services Act, which became effective from 2023. Specifically, the proposal of the Digital Services Act aims to integrate and partly replace the harmonization rules for digital services activity provided by the European single market in Directive 2000/31/EC on electronic commerce.

The package came into force on November 16th, 2022 and was described by European Commission President Ursula von der Leyen as a historic agreement that will shape digital regulations in terms of both speed and substance, with the aim of promoting the enforcement of existing rules, based on the principle: “what is illegal offline is also considered illegal online.”

According to the European Commission, it was necessary to update some specific rules of Directive 2000/31/EC, as intermediaries and online platforms are increasingly affected by illegal activities and violations of fundamental rights.

The Digital Services Act is designed to be applied to all online information services, with a future perspective of creating a safe and reliable digital environment that can maximize consumer rights while also fostering innovation and competitiveness among markets.

The main objective of the DSA is to rebalance the rights and responsibilities of users, intermediary platforms, and public authorities, by introducing binding obligations for all EU countries applicable to all digital services that connect consumers to services, content, or goods. Additionally, the new regulation will aim to speed up the removal of illegal content from online platforms, especially those reaching more than 10% of the European population (45 million monthly users).

HIGHLIGHTS OF THE NEW REGULATION

Obligations for platforms

With the entry into force of the DSA, new rules have also beenintroduced aimed at improving transparency, information obligations, and responsibilities arising from the platform-user relationship.
The obligations, however, are not the same for every type of platform, but are proportional based on the type of service and the number of users. In this regard, digital infrastructures have beendivided into four categories:

Digital Services Act

I. Intermediary services

II. Hosting
III. Online platform
IV. Very large platform

In particular, large online platforms, which reach at least 45 million users monthly, such as Twitter, will be subject to more stringent obligations, as they present higher risks within them.

These include:
• Sharing their key data and algorithms with authorities and authorized researchers to understand the evolution of online risks.
• Collaboration in emergency responses
• Obligation to undergo independent audits, verifying the correctness of financial data and adopted procedures
• Prevention of risks such as the spread of illegal content or content that is contrary to fundamental rights.

To begin adopting the measures provided by the Digital Services Act, online platforms have been required to declare their numberof users by February 17th, 2023, and large digital services will have four months to fully comply with the DSA obligations.

Digital Services Act

In case of regulatory irregularities, the sanctions provided by the DSA will be very strict: they could reach up to 6% of a platform’s annual turnover, and users of digital services will have the possibility of seeking compensation for damages sufferedfollowing platform violations. Punitive measures can also be implemented by a council made up of national coordinators of digital services, who will be responsible for supervising large platforms.

From the new obligations for platforms to the stronger sanctions, the Digital Services Act is a comprehensive regulation that aims to regulate digital services in the European Union and protect users’ rights in the digital environment.

Fundamental Rights

The proposal of the Digital Services Act introduces important guarantees for web users, strengthening the possibility of expressing oneself freely and exercising other fundamental rights such as the right to non-discrimination and the protection of one’s online privacy. The Regulation aims to limit the risk that the right to free expression is blocked illegitimately and will promote the freedom to express one’s opinion in the digital world, as well as strengthen recourse guarantees for users.

The DSA will continue to maintain the ban on imposing general surveillance obligations, as already provided for by the directiveon electronic commerce, as they could significantly limit the right to express oneself, interfering considerably with freedom of enterprise. The ban also limits incentives for digital surveillance and has positive implications for the protection of users’ sensitive data.

It is important to note that the proposal will also ensure that EU citizens will be protected even when using services notestablished in the EU but within the internal market

Protection of minors on the web

Thanks to the Digital Services Act, the European Union has reiterated its priority to protect the interests of minors, subordinating commercial and advertising purposes. In this regard, an article has been dedicated to impose transparency of online advertising, which has resulted in a ban on using “targeting or amplification techniques that process, disclose or infer personal data of vulnerable people for the purpose of displaying advertising“.

The European Commission has therefore decided to reaffirm once again the essentiality of protecting minors’ data, as already established by the EU Directive 2018/1808 on audiovisual services. This rigor in protecting those who have not yet reached the age of majority has been driven by a debate that has its roots starting from 2020, with the explosion of the pandemic and with it the digital platform TikTok.

In fact, the Chinese social network has been in the sights of European privacy authorities over the past few years: from the Italian and Irish Guarantors to the British one. In fact, the authorities have detected non-compliances for the emerging social network such as: lack of privacy information, public profile as a default setting, and inadequate protection of minors at the time of registration. So far, privacy guarantors have appealed to the General Data Protection Regulation, but thanks to the DSA, the laws protecting minors will be even more impactful.

Competent authorities and digital service coordinators

With the entry into force of the Digital Services Act, the designation of two new figures is also expected:

The Compliance Officer, an internal figure of very large online platforms, will be responsible for monitoring compliance with regulations by providers. This role must be filled by a figure with specific professional skills indicated by the DSA and will be subject to transparency and impartiality in judgment obligations.

The Digital Services Coordinator will be represented by one or more authorities designated by the Member States and will ensure the application and enforcement of the regulation. If a Member State appoints more than one authority to coordinate digital services, that State must ensure that specific tasks are assigned to each of the authorities so that they can effectively cooperate in carrying out their duties without interfering with each other. The Member State concerned will then be required to communicate the tasks of each of them to the Commission.

The coordinators of all Member States will form the European Committee for Digital Services, chaired by the European Commission, which supports inter-state coordination and oversight of large platforms. EU member states are required to elect their own coordinators within two months of the entry into force of this regulation and must make the names of the digital service coordinators and their contact information available to the public.

Expectations regarding the DSA

The approval of the Digital Services Act represents a further step forward in the protection of users on the web and their personal data.

This regulation offers a new legal framework that safeguards online life on multiple fronts and strengthens the digital single market within the broad context of Europe.

Together with the Digital Markets Act, the DSA has been highly appreciated, as in their absence, national strategies for the protection of users and platforms would have remained independent and over time would have increased legal fragmentation, hindering the development of Union enterprises and strengthening the power of big tech companies.

Therefore, the perspective that opens up thanks to the new regulation offers important guarantees aimed at protecting the fundamental rights and freedoms recognized by the European Union in a bilateral and transparent manner.