Earlier this month, we reported on the European Commission’s proposed Digital Services Act (DSA). The DSA received political agreement on 22 April, and is now going to the legislators for formal write up before legislation takes effect in 2023.

The European Commission’s website states two main goals of the DSA and its partner legislation, the Digital Markets Act (which gained political approval in March 2022):

  • To create a safer digital space in which the fundamental rights of all users of digital services are protected, and
  • To establish a level playing field to foster innovation, growth, and competitiveness, both in the European Single Market and globally.

The Digital Services Act will “create horizontal rules to ensure accountability, transparency and public oversight around how online platforms shape the information space in which our societies thrive.”

The Act contains ground-breaking rules to govern online content, promote media diversity, curb disinformation and cyber violence, and limit the risks Big Tech poses to user’s mental health, among others. The DSA will force online platforms to share data on how their algorithms work, increase efforts to reduce disinformation, and have processes in place to quickly remove illegal goods and content.

And, under the DSA, the European Commission will have the power to impose fines of up to 6% of company revenue for failing in these, and other, harmful practices. Costs of enforcement will come from Very Large Platforms (with over 45 million users) being charged a levy of up to 0.5% of global revenue.

The rules outlined in the DSA are aimed at online marketplaces, social networks, content-sharing platforms, app stores, and online travel/accommodation platforms – essentially every social network, search engine and online marketplace that does business in the EU. More, it includes specific rules for ‘gatekeeper’ platforms (like search engines, hosting services, and domain registrars), and rules on algorithms, content moderation, and advertising.

More on the Digital Services Act can be found on the European Commission’s website, including specific information for SMEs.

The world will, no doubt, be watching to see if this landmark legislation proves effective.

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