- The regulation sets tiered obligations by type and size of intermediary, from hosting to the largest platforms.
- It bans deceptive design and advertising aimed at minors, and requires explanations of how content is moderated.
- It applies generally from February 2024; very large platforms earlier.
On 16 November 2022 Regulation (EU) 2022/2065 on a Single Market for Digital Services, known as the DSA, took effect; it was published in the Official Journal of the European Union on 27 October. It modernises the 2000 e-Commerce Directive and sets common rules for intermediary services: access providers, hosting, online platforms, online marketplaces and search engines.
As a regulation, it applies directly in all member states, with no need for transposition. Most of its obligations will be enforceable from 17 February 2024, but very large platforms and search engines, those with more than 45 million monthly users in the EU, must comply four months after the Commission designates them. It affects any company that sells, advertises or hosts content online.
Rules by size
The regulation arranges obligations in layers. All intermediaries must designate a contact point and explain in their terms how they moderate content. Hosting services must offer a notification mechanism for illegal content and give reasons for their decisions. Online platforms add further duties: internal complaint systems, cooperation with “trusted flaggers” and measures against abuse. Terms of use must be clear and intelligible, and the principle is kept that an intermediary is not liable for what it does not know, provided it acts diligently once it learns that something is illegal.
Micro and small enterprises are exempt from several of the additional platform obligations, so as not to burden them with disproportionate costs. Very large platforms and search engines bear the heaviest obligations: assessing and mitigating systemic risks, undergoing independent audits and giving researchers access to data. Supervision falls to the European Commission in that case and, otherwise, to national digital services coordinators.
Businesses and users
Online marketplaces will have to collect and check basic information about the traders operating on them, such as identity and contact details, to make it harder to sell illegal products. Users will be able to appeal content removals and, in a dispute, turn to out-of-court dispute settlement bodies. Professional sellers using these marketplaces will also have to provide their details and commit to comply with product safety rules.
On advertising, the regulation bans profile-based ads aimed at minors and ads targeted using sensitive data, and bans deceptive designs, the so-called dark patterns, that push users to decide against their own interest. Platforms must say why an ad is shown and who pays for it.
Penalties and what to review
Breaches may be penalised with fines of up to 6% of the provider’s worldwide annual turnover, and up to 1% for incorrect, incomplete or misleading information; each state sets the specific regime within those limits. Coordinated supervision aims to prevent the rules from being applied very differently from one country to another.
Companies with an e-commerce site, a forum, a hosting service or online advertising should identify whether they are intermediaries under the regulation, which obligations apply to them, and review their terms of use, their content takedown procedures and their data policy. Anyone selling on online marketplaces should be ready to prove their identity. It is advisable to designate who in the company handles relations with authorities and users, and to document how a takedown decision is made, so it can be explained if challenged. This is general information.
The internet stops being a space with few common rules and gets a European framework for those who operate in it.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
