With the recent political agreements reached on the Digital Services Act (DSA) and the Digital Markets Act (DMA) between the Council and the European Parliament, the digital package proposed by the European Commission way back in 2020 will possibly soon see the light of day.
Whereas the scope of the DMA is to regulate online marketplaces to ensure that such platforms do not impose unfair conditions on businesses and end users and to secure an open digital environment, the DSA sets out a new standard for the accountability of intermediary services regarding illegal and harmful content.
Various online intermediary services, including hosting services, very large online search engines and online platforms fall within the scope of the DSA. The obligations imposed on them in terms of this act vary depending on their role, size and impact on the online sector.
On the other hand, the DMA applies to companies identified as gatekeepers for at least one of the so-called ‘core platform services’ such as online search engines, social networking services, app stores, certain messaging services, virtual assistants, web browsers, operating systems and online intermediation services.
The salient regulatory measures emanating from the DSA relate to measures intended to counter illegal goods, services or content online, as well as measures empowering users and civil society at large. Thus, by way of example, the DSA contemplates a mechanism for users to easily flag illegal content and for the platforms to cooperate with such flaggers. The said act also envisages new safeguards for the protection of minors and limits on the use of sensitive personal data for targeted advertising.
The proposed laws foresee the imposition of effective sanctions for non-compliance with the prohibitions and obligations found therein
On the other hand, the DMA establishes various obligations which gatekeepers will need to implement in their daily operations to ensure fair and open digital markets. It primarily imposes an obligation on gatekeepers to design their general access conditions in a fair, reasonable and non-discriminatory manner and to publish them.
Other salient obligations relate to the gatekeepers’ obligation to provide companies advertising on their platform with access to the performance measuring tools of the gatekeeper itself and the necessary information for advertisers and publishers to carry out their own independent verification of their advertisements hosted by the gatekeeper.
Such platforms will also be banned from using the data of business users when they themselves compete with such businesses on the platform. Similarly, ranking the gatekeeper’s own products or services in a more favourable manner compared to those of third parties is strictly forbidden.
The European Commission is empowered to enforce the rules laid down in this digital legislative package. The proposed laws foresee the imposition of effective sanctions for non-compliance with the prohibitions and obligations found therein.
The political agreement reached by the European Parliament and the Council is now subject to formal approval by these two co-legislators. Once adopted, the legislative measures which take the form of a regulation and hence, will be directly applicable in all member states. The said regulation will apply 15 months after its entry into force or from January 1, 2024, whichever comes later.
Besides enhancing legal certainty for the digital industry, the main message which this single EU legislative framework seeks to deliver is that whatever the size, might is not always right. Indeed, the greater the size, the greater will be the responsibilities for the market player.