The Digital Services Act and Digital Markets Act set a high global benchmark for regulating digital services with clear obligations tailored to the importance of the online platforms. Page contentsPage contents Clear gatekeeper obligations across the EU Today the way in which gatekeepers conduct their businesses is either largely unregulated or based on sets of rules many of which pre-date the digital economy. This is the case across the EU. Gatekeeper-related problems are currently not effectively addressed by Member States or the EU in existing regulation. Legal certainty for platforms Today, national legislative initiatives in EU Member States may partially address the problems identified but also lead to increased regulatory fragmentation in the EU. This can create increased compliance costs for platforms operating cross-border. What the new Digital Markets Act changes:Gatekeepers know beforehand the obligations they have to respect.Other platforms will not be subject to these rules but will be able to benefit from fairer behaviours when doing businesses with gatekeepers.Reduced compliance costs for gatekeepers and their business users.What the new Digital Services Act changes:One set of rules applicable throughout the EUThe new rules set up mechanisms for the Commission and Member States to coordinate their actions and ensure a proper implementation of the framework across the EU. Tailored asymmetric obligations Today, users are exposed to illegal goods, content or services, and all decisions are mostly at the discretion of the platforms. The biggest impact comes from those platforms which have become quasi-public spaces for communication and trading. What the new Digital Services Act changes: Measures to counter illegal goods, services or content online, such as a mechanism for users to flag such content and for platforms to cooperate with “trusted flaggers”. New obligations on traceability of business users in online market places, to help identify sellers of illegal goods. Effective safeguards for users, including the possibility to challenge platforms’ content moderation decisions Transparency measures for online platforms that are wide-ranging, including on the algorithms used for recommendation Obligations for very large platforms that reach more than 10% of the EU’s population to prevent abuse of their systems by taking risk-based action and through independent audits of their risk management systems. Researchers will have access to data of key platforms, in order to scrutinise how platforms work. Codes of conduct and technical standards will assist platforms and other players in their compliance with the new rules. Other codes will enhance measures taken to ensure accessibility of platforms for people with disabilities, or support further measures on advertising. All online intermediaries offering their services in the single market, whether they are established in the EU or outside, will have to comply with the new rules. Oversight structure to match the complexity of the online space: Member States will have the primary role, supported by a new European Board for Digital Services; for very large platforms, supervision and enforcement by the Commission. Intermediary services (cumulative obligations) Hosting services (cumulative obligations) Online platforms (cumulative obligations) Very large platforms (cumulative obligations) Transparency reporting ● ● ● ● Requirements on terms of service due account of fundamental rights ● ● ● ● Cooperation with national authorities following orders ● ● ● ● Points of contact and, where necessary, legal representative ● ● ● ● Notice and action and obligation to provide information to users ● ● ● Reporting criminal offences ● ● ● Complaint and redress mechanism and out of court dispute settlement ● ● Trusted flaggers ● ● Measures against abusive notices and counter-notices ● ● Special obligations for marketplaces, e.g. vetting credentials of third party suppliers ("KYBC"), compliance by design, random checks ● ● Bans on targeted adverts to children and those based on special characteristics of users ● ● Transparency of recommender systems ● ● User-facing transparency of online advertising ● ● Risk management obligations and crisis response ● External and independent auditing, internal compliance function and public accountability ● User choice not to have recommendations based on profiling ● Data sharing with authorities and researchers ● Codes of conduct ● Crisis response cooperation ● Clarified liability and efficient compliance mechanism The liability exemption for online intermediaries is a cornerstone of internet regulation, ensuring that it is possible to tackle illegal content, goods or services swiftly, but also that platforms are not incentivised to remove legitimate content and are not obliged to monitor their users. Today, some of the rules led to fragmentation across the single market, and there are uncertainties for diligent platforms who want to take measures and protect their users from illegal content. What the new Digital Services Act changes: Reinforce and further clarify the conditions for liability exemptions: Platforms and other intermediaries are not liable for users’ unlawful behaviour unless they are aware of illegal acts and fail to remove them. Rules for the liability exception will now be harmonised and uniform across the EU thanks to a directly applicable Regulation. New clarifications on how these conditions apply for consumer protection liability. Solving the paradox of voluntary measures taken by small platforms: diligent platforms are not liable for illegal content they detect themselves. More legal certainty on interaction with authorities: platforms will have to cooperate with authorities that issue legal orders that have minimum common criteria. Small online platform scaling-up in the EU There are more than 10,000 platforms in the EU, over 90% of which are small and medium sized enterprises, according to Commission estimates. Digital services in the EU currently have to deal with 27 different sets of national rules. Only the largest companies can deal with the resulting compliance costs. What the new Digital Services Act changes: Ensure that small online platforms are not disproportionately affected but they remain accountable. Small and micro-enterprises are exempted from the most costly obligations, but are free to apply the best practices, for their competitive advantage. A single set of rules for the entire EU will create the right conditions for cross-border digital services to prosper. This can create up to 2% more cross-border digital trade in the single market. Small players will have legal certainty to develop services and protect users from illegal activities as they will be supported by standards and guidelines.
