DIGITAL SERVICES ACT

A World’s First In The Field Of Digital Regulation.

     In order to ensure a safe online environment, the European Parliament and European Union (EU) Member States announced a political agreement on the Digital Services Act (DSA), a landmark legislation to force big Internet companies to act against disinformation and illegal and harmful content, and to “provide better protection for Internet users and their fundamental rights”. The Act, which is yet to become law, was proposed by the EU Commission (anti-trust) in December 2020. In terms of ambition, the nature of the actors regulated and the innovative aspect of the supervision involved, the DSA is a world’s first in the field of digital regulation.

    The DSA will apply to all online intermediaries providing services in the EU. The obligations introduced are proportionate to the nature of the services concerned and tailored to the number of users, meaning that very large online platforms (VLOPs) and very large online search engines (VLOSEs) will be subject to more stringent requirements. Services with more than 45 million monthly active users in the European Union will fall into the category of very large online platforms and very large search engines. To safeguard the development of start-ups and smaller enterprises in the internal market, micro and small enterprises with under 45 million monthly active users in the EU will be exempted from certain new obligations.

    The Digital Services Act (DSA) is the second part of the bloc's massive project to regulate tech companies. The key piece of legislation aims to hold large tech multinationals accountable for what is published on their platforms. It primarily targets those collectively known as GAFAM — Google, Apple, Facebook (now Meta), Amazon and Microsoft — although it would also likely impact a handful of other groups such as social network TikTok. It is expected to force platforms such as Twitter, Facebook and YouTube to moderate the content they host, either in the field of e-commerce or disinformation.

    India’s IT Rules announced last year make the social media intermediary and its executives liable if the company fails to carry out due diligence. Rule 4 (a) states that significant social media intermediaries — such as Facebook or Google — must appoint a chief compliance officer (CCO), who could be booked if a tweet or post that violates local laws is not removed within the stipulated period. India’s Rules also introduce the need to publish a monthly compliance report. They include a clause on the need to trace the originator of a message — this provision has been challenged by WhatsApp in Delhi High Court.

    In the context of the Russian aggression in Ukraine and the particular impact on the manipulation of online information, a new article has been added to the text introducing a crisis response mechanism. This mechanism will be activated by the Commission on the recommendation of the board of national Digital Services Coordinators. It will make it possible to analyse the impact of the activities of VLOPs and VLOSEs on the crisis in question and decide on proportionate and effective measures to be put in place for the respect of fundamental rights. Platforms accessible to minors will have to put in place special protection measures to ensure their safety online in particular when they are aware that a user is a minor. Platforms will be prohibited from presenting targeted advertising based on the use of minors’ personal data as defined in EU law.

    Beyond getting the law right we also need to ensure effective enforcement. The co-legislators have recently suggested charging VLOPs a “supervision fee” for the enforcement mechanism. This idea merits discussion. A more balanced and proportionate solution would be to base the supervision fee on the company’s EU-based net income. The Commission should also publish its annual supervisory costs for each fee period, so that the proportionality and cost-effectiveness of the fee can be scrutinised. After years of hard work, it is now time to agree on a well-functioning regulation that companies, both large and small, can comply with in practice. Ultimately, the DSA should ensure that Europeans can continue to enjoy all the economic and social benefits of digital services that have become so central for all of our lives.