- Since 17 February 2024, the Digital Services Act applies to all providers of online intermediary services in the Union.
- The obligations are tiered: more demanding the larger and more complex the service, with partial exemptions for micro and small enterprises.
- Fines can reach 6% of annual worldwide turnover, and each State was required to designate its digital services coordinator.
On 17 February 2024 Regulation (EU) 2022/2065, known as the Digital Services Act (DSA), became fully applicable. It is aimed at providers of intermediary services: internet access, hosting services, online platforms and online marketplaces. For very large online platforms and search engines, the obligations were already enforceable after their designation by the European Commission; they now reach everyone else.
The Regulation maintains the principle that an intermediary is not liable for third parties’ illegal content if it acts diligently, but adds duties of transparency and care: points of contact, clear terms and conditions, transparency reports, mechanisms to report illegal content and, where there is no establishment in the Union, a legal representative. Each Member State was required to designate its digital services coordinator, the authority that supervises compliance, by 17 February 2024 at the latest.
Obligations in tiers
All intermediaries must designate points of contact, include in their terms and conditions clear information on content restrictions and moderation systems, and publish transparency reports. Hosting services must offer notice and action mechanisms: anyone can flag content they consider illegal, with a reasoned explanation and its exact location. Online platforms add an internal complaint-handling system and other safeguards for users.
Online marketplaces that allow consumers to conclude distance contracts with traders must also ensure their traceability: name, address, contact details, identification document, payment account details and, where applicable, trade register details, plus a self-certification that they will only offer products compliant with Union law. For traders already operating on a platform on 17 February, providers must make best efforts to obtain that information within twelve months and suspend the service to those who do not provide it.
Who is exempt
Micro and small enterprises, as defined by the 2003 European recommendation, are excluded from the section regulating the additional obligations of online platforms, with some exceptions, and keep that exclusion for twelve months after losing the status. It does not apply to very large online platforms, even if they are small.
That does not mean being outside the Regulation. The basic obligations of all intermediaries, such as having clear terms and conditions or notice mechanisms if content is hosted, continue to apply. The category a company falls into depends on the service it provides and not only on its size. If in doubt, analyse it with your adviser before assuming an exemption applies.
What to review
If your company hosts third-party content, runs a forum, a shop with customer reviews or an online marketplace, it is advisable to analyse which category it falls into and which obligations apply. A first pass includes reviewing the terms and conditions, providing a reporting channel, documenting moderation decisions and, if not established in the Union, designating a legal representative.
The penalty regime matters: States must provide for fines of up to 6% of annual worldwide turnover for breaches of the obligations, and up to 1% for supplying incorrect information or failing to submit to an inspection. To assess your exposure, the prudent course is to consult a specialist adviser.
The liability of online intermediaries enters a phase of detailed obligations.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
