EU Digital Services Act: What’s the takeaway for rest of us?

The European Union has agreed on a landmark law to regulate Big Tech platforms and how they operate in the region. On April 23, the European Parliament and the council reached an agreement on the proposal to the Digital Services Act (DSA), which not only creates a new standard holding online platforms accountable on illegal and harmful content, it also seeks to give users new ways to oppose moderation decisions made by the platforms. 

Calling the agreement a “historic” one, EU Commission President Ursula von der Leyen said in a tweet, “It (DSA) will ensure that the online environment remains a safe space, safeguarding freedom of expression and opportunities for digital businesses. It gives practical effect to the principle that what is illegal offline, should be illegal online.” 

Reel back to December 2020, the European Commission presented a digital services package comprising the Digital Services Act (DSA) and a Digital Markets Act (DMA). Together, these acts define a framework suited to the challenges posed by the emergence of digital giants and the protection of their users, while maintaining a balance conducive to innovation in the digital economy. For example, the DSA will now ensure that tech giants such as Facebook and Google will be expected to moderate illegal content on their platforms. 

Executive Vice-President for A Europe Fit for the Digital Age, Margrethe Vestager, highlighted that the DSA will help to create a safe online environment. She tweeted that “platforms need to be transparent about content moderation decisions and avoid unsafe products being placed on marketplaces.”  

Some of the features of the DSA can serve as an eye-opener for the rest of the world, considering businesses across the globe and in every nation is facing abuse on online platforms and are striving to manage and moderate data and inappropriate content. Here are some key features: 

Managing risks more effectively  

The DSA introduces stricter rules for platforms with more than 45 million users in the EU due to their influence on our societies. Very large online platforms will be required to conduct regular assessments of systemic risks such as disinformation, deceptive content, and revenge porn, implementing appropriate mitigation measures subject to independent audits. Failing the audits would entail a breach of the regulation, which includes fines of up to 6% of worldwide turnover. 

A crisis response mechanism was added through the negotiations to respond to emergencies like the war in Ukraine. It would enable the European Commission to mandate very large online platforms to take specific actions in a crisis, such as taking down war propaganda. 

Greater moderation of online content  

According to the press release, as part of the act, EU-wide diligence rules will be applicable to all digital services that connect consumers to goods, services or contents. It further said that a new process for faster removal of illegal content and protection of fundamental rights of online users will be initiated. The DSA aims to counter illegal services or online content and new rules on finding business users in the online marketplace to help in identifying sellers of illegal goods. Furthermore, transparency measures for online platforms on issues like algorithms will be used for recommendations.  

Targeted advertising based on minors’ personal data and profiling based on sensitive data like political views and religious beliefs will be forbidden. 

All platforms will have to explain how it personalises content for their users via their recommender systems. Very large online platforms will also have to provide an alternative recommender system not based on profiling. It also offers suggestions on the responsibilities of Google, Meta and the likes for illegal content. 

Stricter rules for user protection  

The legislation states that platforms must ensure high levels of privacy and safety for minors without processing additional personal data to ascertain they are minors. The Commission will issue guidelines on how these provisions apply in practice. 

EU lawmakers pushed for stricter information and monitoring requirements for online marketplaces. Businesses will only be able to access their services after providing some basic information, and the platforms should do their best to verify them. The marketplaces will also have to randomly check products’ legality against official databases. 

Consumers will have the right to seek compensation for damages caused by a non-complying platform, for instance, because it did not make the best efforts to verify the trader’s identity. 

The agreement also includes a ban on dark patterns to ensure users can make a free and informed choice rather than being manipulated into doing something. 

Greater enforcement and an onus on big players  

While national authorities will supervise smaller platforms, the Commission will have exclusive competencies on very large online platforms. To finance that, the EU executive will charge the platforms a supervisory fee proportional to the size of the service and not exceeding 0.05% of its worldwide annual net income. 

While getting ready to enforce the Digital Services Act on very large online platforms, the EU executive has come back with a proposal to charge these big players a supervisory fee directly. Micro and small enterprises are exempted from a series of obligations, such as the traceability of traders, notification of criminal offences, transparency requirements, a system for handling complaints, and out-of-court dispute settlement. 

This exemption extends for one year to companies that have grown to become medium-sized. The Commission is due to assess the impact of the DSA on SMEs after three years and support them in their compliance efforts financially. 

The DSA apply 15 months after entry into force or on 1 January 2024, whichever is later. However, it will apply in four months for very large online platforms, the press release noted. 

As the Act makes it clear, Google, Facebook and other large online platforms will have to act to protect their users better; this can also serve as a lesson for countries like India others. While the big techs play an important role in our societies, their dominance and misuse when dealing with user data often raised questions on user privacy, transparency and ethics. From that point of view, Luca Gattoni, Data Scientist & Machine Learning Researcher emphasized in a tweet, “the DSA marks another milestone in extending users’ rights over business.”