Fifth article in the mini-series on the Digital Services Act: summary

Introduction

The Digital Services Act ("DSA"), adopted by the European Union in 2022, is a major step towards regulating the online environment. With growing concerns about digital threats, misinformation and invasive business practices, the DSA is designed to strengthen user protection and promote transparency and accountability of online platforms.

This article provides a comprehensive summary of the key aspects of the regulation.

Key principles of the DSA

The DSA is based on a number of fundamental principles that aim to enhance the security of the digital space and the protection of users:

1. Transparency: all intermediary service providers must provide clear and transparent information to their users about their policies, tools and procedures used for removal, its moderation and complaint handling procedures. Accordingly, entities subject to DSAs will generally be required to revise their contractual terms and conditions to provide their users with full and clear information regarding precisely these policies, tools and procedures.
2. Accountability: increasing transparency of algorithms and advertising systems so that users are clearly informed about how their data is used. The DSA places particular emphasis on the accountability of those online platforms that have a significant impact on public space and society (VLOP and VLOSE see previous articles). These platforms are obliged, among other things, to carry out regular risk assessments and undergo external audits.
3. User protection: ensuring safety of users within the online environment through effective tools for reporting and deleting illegal content, misinformation and malicious behaviour.
4. Prohibition of manipulative practices: the DSA prohibits the use of so-called "dark patterns" (manipulative practices), i.e. misleading and/or manipulative interfaces that prevent users from making informed and free decisions.

Obligations of digital service providers

The DSA sets out different obligations depending on the type and size (reach) of the digital service provider. The DSA distinguishes four basic types of digital service providers:

• Intermediary services (e.g. cloud platforms and internet providers)
• Hosting services (e.g. information storage services, web hosting, etc.)
• Online platforms (online marketplaces, sharing economy platforms, app stores, travel booking sites and generally sites and apps where people can share content created by other users)
• Very large online platforms (online platforms with at least 45 million monthly users)

Basic obligations under the DSA

As noted above, the DSA uses a tiered system in relation to the obligations imposed, depending on the size, type and reach of each type of digital service provider.

A detailed description of the individual duties and their division has been included in the previous article.

The basic obligations imposed by the DSA on digital service providers include:

• restrictions on targeted advertising;
• transparency of advertising;
• transparency of recommender systems;
• ban on "dark patterns";
• removing illegal content;
• putting in place mechanisms for reporting illegal content and taking appropriate action;
• providing transparent information to users; and
• notification obligation.

Sanctions under the DSA

In the event of a breach of the DSA, the following sanctions may be imposed on digital service providers:

• Financial penalties: can reach up to 6% of the provider's worldwide annual turnover.
• Periodic financial penalties: in the event of repeated breaches of the regulation.
• Prohibition: for extreme cases of serious or repeated violations.
• Temporary suspension of service: to protect users or the public interest.
• Public declaration of violation: To bring public attention to non-compliance.

 

The Digital Services Act "DSA" (EU) 2022/2065 brings significant changes and new obligations for businesses operating in the digital environment. At the same time, it introduces strict penalties for non-compliance.

Our office is ready to help you navigate the new European regulations and ensure your business is compliant with the latest implementation requirements. We will guide you through the requirements of this new legislation and, through comprehensive legal analysis, adaptation of internal processes and regular monitoring of new developments in the legislation, we will ensure not only compliance, but also time to grow and innovate your business.

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