The European Commission in December 2020 presented two legislative initiatives to update the rules governing digital services in the EU. These are the Digital Services Act (DSA) and the Digital Markets Act (DMA). The DMA was adopted in April 2021. The DSA with some amendments was approved by the European Parliament on 20 January 2022. The DSA and DMA create a single set of new rules to create a safer and more open digital space.
The DSA and DMA have two main objectives:
- to create a safer digital space where the fundamental rights of all users of digital services are protected,
- to establish a level playing field to promote innovation, growth and competitiveness, both in the European single market and globally.
The DSA contains provisions regulating gatekeeper online platforms. The DSA regulates all digital services that connect consumers to content, services and goods. These services are mainly provided by dominant players such as Facebook and Google. These platforms play key roles in the EU internal market, functioning as bottlenecks between traders and consumers for digital services. However, the rules set out in the DSA apply not only to such online intermediaries, but also to online shops, social networks, content sharing platforms, app shops or travel and accommodation search engines.
The DSA also regulates, among other things, the removal of illegal content such as spam, scam or hate speech. The Internet is full of advertisements from fraudsters who impersonate well-known, large companies in order to extort money. The removal of such content will now be properly regulated.
The new law will protect the interests of ordinary users when their content is wrongly removed by major online platforms. It will be easier to challenge such decisions.
Another very important element of the DSA is greater transparency of online services. This applies in particular to content recommendation algorithms and targeted advertising. The former have many advantages. Thanks to them, content recommended by YouTube or Facebook often matches our interests. Unfortunately, algorithms also have their dark side. They can shape our opinions, recommend material full of conspiracy theories and spread fake news. Children are particularly vulnerable to the influence of algorithms, and because of their age and inexperience they have not managed to develop suitable defence mechanisms.
Currently, users have little control over algorithms. The DSA partially changes this. The European Parliament adopted an amendment requiring large websites to make it easier for internet users to change the parameters of their recommender systems. However, an amendment to allow alternative choices for content recommendations was rejected. This was to allow users to decide for themselves which algorithm should recommend certain content to them. If the amendment had been adopted, we would have been able to choose an algorithm from a content provider that we trust and turn off those algorithms that we have concerns about. Unfortunately, this solution will not come into force, at least for now.
As with the GDPR, the main challenge will be to implement the new rules correctly. For platforms covering more than 10% of the EU population, the DSA will give EU institutions supervisory powers and the ability to impose severe penalties. Penalties can amount to up to 6% of annual turnover and even result in exclusion from the single market.
The new rules will not come into force immediately. Preparations are ongoing for negotiations between the Parliament and the Council, which includes EU ministers. This process will probably be completed in the first half of this year. Emmanuel Macron has announced that this will happen during the French presidency of the EU, which will last until the end of June.