Digital Services Act & Digital Markets Act In European Union New moderation Rules by 2024

European Union
March 1, 2024

On 5 July 2022, the European Parliament approves two legislations governing the digital world , the DSA ( Digital Services Act) and the DMA ( Digital Markets Act) which will become applicable by 2024. . This regulation is to limit the spread of illegal content online and to protect and establish a safe online environment for businesses. It is the fundamental rights of users for a safer digital space. It is also aimed at encouraging a space for innovative digital growth, competitiveness around Europe and in the global market.

Digital services include a large category of online services, from normal websites to internet infrastructure services and online intermediaries and platforms, like online marketplaces, social networks, content-sharing platforms, app stores, and online travel and accommodation platforms.

New sets of obligations are designed as “made to measure”: the DSA singles out Very Large Online Platforms (VLOPs) as well as Very Large Online Search Engines (VLOSEs), which are platforms with more than 45 million average monthly active users in the EU. This way, the law rightly recognises the platforms’ specific control over public discourse and the often-manipulative influence they have on people’s behaviour online.        

The Digital Markets Act includes rules that govern gatekeeper online platforms. Gatekeeper platforms are digital platforms with a systemic role in the internal market that function as bottlenecks between businesses and consumers for important digital services. Some of these services are also covered in the Digital Services Act, but for different reasons and with different types of provisions.

While there is a broad consensus on the benefits of this transformation, the problems arising have numerous consequences for our society and economy. A core concern is the trade and exchange of illegal goods, services and content online. Online services are also being misused by manipulative algorithmic systems to amplify the spread of disinformation, and for other harmful purposes. Despite a range of targeted, sector-specific interventions at EU-level, there are still significant gaps and legal burdens to address. These new challenges and the way platforms address them have a significant impact on fundamental rights online.

The European Parliament and EU Member States recently reached a political agreement on the Digital Services Act (DSA), legislation that sets standards for accountability across online platforms and better protects users online.

The DSA is expected to bring forward new consumer protection rules in the online environment and provide opportunities for digital businesses. Under the principle of "what is illegal offline should be illegal online", the new rules include a structure of accountability, ensuring that online service providers will be held responsible for their content moderation practices in the digital space.

New rules are crucial for setting clear and fair standards for all players. Online marketplaces can be required to trace their traders under the “know your business customer” principle and any dark patterns meant to manipulate users and their online behavior are strictly prohibited. These are just a few of the new obligations expected to affect businesses and their accountability within the online sphere.

The aim is not to strictly control new types of technologies but to adjust the digital ecosystem to better fit the expectations of European users. Despite changes that might affect the strategic direction of your business, the best way to be prepared is to stay flexible and analyse the next steps in accordance with the new initiatives. Adopt a multidisciplinary approach and collaborate with people with different skills and backgrounds. Legal, IT, operations, and other departments can work together and supply valuable and better represented insights.

It is important to note that the Digital Services Act is part of a comprehensive package put forward under “A Europe fit for the Digital Age” digital strategy. Legislation regulating digital technologies is expected to emerge gradually over the next decade with an impact on various digital sectors, such as artificial intelligence, cybersecurity, and digital finance. Be ready to experience the new look of our digital age!

The DSA brings significant outcomes that will safeguard fundamental rights online.

Legally binding transparency and algorithmic accountability: Enhanced transparency rules require online platforms to disclose the number of removal orders issued by national authorities and all notices about the presence of illegal content trusted flaggers submit or obtain by automated means. The DSA requires all online platforms to publicly report on how they use automated content moderation tools, the tools’ error rates, and information about training and assistance they provide to their content moderators.

Harmonised response to illegal content online: For the first time in EU history, the DSA sets forth unified criteria for so-called notice-and-action procedures, the system that determines when and if platforms should be held liable for dissemination of illegal content. The law maintains and enhances an important legal principle. The conditional model of intermediary liability defines how online platforms should act when they detect illegal content. The DSA brings more clarity and certainty regarding how to do this diligently and in good faith. Second, the DSA reinforces the prohibition of general content monitoring, which keeps a distinction between knowing about specific illegal content and trying to remove that on the one hand and scanning everything to fish for any and every piece of illegal content on the other.

No to “dark patterns” (deceptive design) —at least to some extent: In a win for people’s rights and online experience, the DSA has a measure addressing deceptive design. On paper, it should prevent all online platforms from designing and operating their interface design in a deceptive and manipulative way. While this is an important protection intended to ensure people can make “free and informed decisions”, the final wording does not add much to already existing standards in consumer protection and data protection rules.

Ban on targeting and amplification using special categories of sensitive data: Another landmark measure in the DSA is its strict regulation of online advertising. Together with our partners, we have been fighting against surveillance-based advertising that exploits people’s vulnerabilities and results in serious human rights abuse. The DSA goes beyond pure transparency requirements on targeting. It establishes a ban on advertising based on profiling and using special categories of sensitive data (e.g. sexual or political orientation). This is a real turning point that opens the pathway to effectively tackle surveillance-based advertisement in the future. It is important to acknowledge that this is only a partial victory because there are targeting techniques that are not based on sensitive data that remain highly intrusive.

More control over information flow to people: In the current online ecosystem, it is close to impossible for individuals to understand how and why content is being distributed to them. The DSA obliges all online platforms to disclose parameters of their content recommender systems to explain why people see some information more regularly than others. This information should be easily accessible via their terms of service. Importantly, people will have the right to modify content recommender systems and to have access to at least one option that is not based on profiling.

Special due diligence obligations for VLOPs: Probably the most novel and ground  breaking element of the DSA is the duty-of-care obligation for VLOPs that include (among others): mandatory risk assessment; deployment of mitigation of risk measures; and obligation to subject themselves to independent audits. The due diligence chapter of the DSA specifically recognises systemic risks for fundamental rights stemming from VLOPs’ systems and operations. However, the effectiveness of these measures will be determined by future delegated acts and guidelines that are yet to be drafted by the Commission.

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