Digital Services Act an

The European Commission has recently published two highlyanticipated legislative proposals

The Digital Services Act (DSA) and the Digital Markets Act (DMA) are poised to considerably increase the European Commission’s regulatory competence over online platform companies.

Digital Services Act

The DSA enhances the provision of innovative services in the internal market and further updates the EU’s online trade laws. The Act shall apply to digital services that link consumers to goods, services or content.

Providers of intermediary services and particularly online platforms, shall be subject to stricter rules on responsibility towards their users, as well as rules on accountability for their activities. While the DSA maintains the liability rules for providers of intermediary services set out in the eCommerce Directive, the proposal launches innovative and comprehensive due-diligence obligations. Notable innovations include notice-and-action procedures for illegal content online and the option to challenge a platform’s content moderation decisions.

The DSA imposes higher standards for transparency and accountability by fashioning new obligations on how providers of such platforms moderate content on advertising and algorithmic processes. Online platforms are to create an internal complaint-handling system regarding decisions relating to illegal content or information which is incompatible with their terms and conditions. Platforms will have to publish reports on activities relating to the removal and the disabling of information with regards to such content.

Providers of hosting services will be obliged to implement mechanisms which allow third parties to notify the presence of alleged illegal content. If a provider decides to remove or disable access to specific information provided by a recipient of service, the recipient is entitled to receive a statement of reasons.

The DSA shall moreover benefit SMEs as there will be substantial cost-savings for those who deal with illegal content. Only “very large online platforms” are to incur significant costs, as they must adopt a risk-based approach to prevent abuse to their systems and protect the integrity of their services. Where risks are identified, these platforms must employ reasonable and effective mechanisms to mitigate them. The DSA also imposes transparency standards on those “very large online