Digital Services Act

The Digital Services Act (DSA) aims to create a safer and trusted online environment – preventing the spread of disinformation, as well as illegal and harmful activities online (such as racism or child pornography), ensuring the protection of fundamental rights and user safety, and creating an open and fair online platform environment.

Affected businesses

The DSA regulates online intermediaries and online platforms – e.g., online marketplaces, content-sharing platforms, app stores, cloud services, social networks, and online travel and accommodation platforms – by setting out a framework of layered responsibilities which are targeted at different types of services (i.e., intermediary services, hosting services and platform services).

Key impacts

The obligations to which an intermediary service provider will be subject will vary according to the size and nature of the service provider. The DSA sets out more extensive obligations for online platforms (such as social media platforms) and ‘Very Large Online Platforms’ (VLOPs) or ‘Very Large Online Search Engines’ (VLOSEs).

• The core obligations that all intermediary service providers are subject to include:
• Acting on orders against illegal content and orders to provide information.
• Establishing a single point of contact and making their information public.
• Designating a legal representative where the intermediary service provider does not have an establishment in the European Union.
• Including information on any restrictions the intermediary service provider imposes in relation to the use of their services in their terms and conditions – such as policies and tools used for content moderation (including algorithmic decision-making and human review), etc.

There are other specific cumulative obligations for the distinct categories of intermediary service providers:

• Providers of hosting services – e.g., implementing easily accessible and user-friendly mechanisms allowing any individual to notify the hosting service provider of information on their platform which they consider to be illegal.
• Online platforms – e.g., offering a complaint-handling procedure allowing users to challenge decisions taken by the online platform, along with enhanced transparency obligations related to advertising.
• VLOPs and VLOSEs – e.g., appointing one or more compliance officers responsible for monitoring the VLOPs’ compliance with the DSA, publication of reports, etc.

Enforcement

Depending on the nature of the infringement, fines can be imposed of up to 6% of the annual worldwide turnover of the provider of intermediary services in the preceding financial year. 

Key timings

The DSA entered into force on 16 November 2022, and starting from 17 February 2024, DSA rules are applicable to all intermediary service providers. However, some DSA rules entered into effect earlier for designated platforms with more than 45 million users in the EU.