Over the past few years, the importance of digitisation and digital progress has been increasing significantly. This trend has clearly also caught the attention of the European Commission. In the context of its Digital Strategy, the Commission launched two initiatives on 15 December 2020 to strengthen the legislative landscape governing digital services within the European Union. These are referred to together as the Digital Services Act package:
- Proposal for a Regulation of the European Parliament and of the Council on a Single Market For Digital Services and amending Directive 2000/31/EC (Digital Services Act or DSA); and
- Proposal for a Regulation of the European Parliament and of the Council on contestable and fair markets in the digital sector (Digital Markets Act or DMA).
Both the DSA and the DMA relate to the fast-growing sector of digital services and aim to create greater innovation, reliability, competitiveness and growth of digital services, while empowering (business) users of digital services and protecting consumers’ fundamental rights.
Towards a safer, responsible digital European market with the Digital Services Act
What?
The DSA, which will take the form of a regulation and will to a large extent amend the e‑Commerce Directive, proposes new obligations, rights and responsibilities for digital players and for consumers.
These include the implementation of mechanisms to remove illegal online content faster (e.g. the possibility to “flag” illegal content), increased protection of consumers’ rights (for example by implementing effective safeguards for users, by incorporating certain guarantees e.g. concerning freedom of the press and freedom of expression, or by introducing a transparency obligation regarding algorithms in the context of online advertising), due diligence obligations for large platforms, and clearer liability exemptions that online intermediaries and platforms may rely upon.
Who?
The DSA mainly relates to online intermediaries and platforms that offer goods, services or content to consumers, such as (i) intermediary services offering network infrastructure (e.g. internet access providers), (ii) hosting services (e.g. cloud hosting services), (iii) online platforms connecting sellers and consumers (e.g. social media platforms, app stores, online marketplaces), and (iv) very large online platforms reaching more than 10% of the 450 million consumers in the EU.
When?
The text of the DSA was recently approved by plenary vote in the EU Parliament on 20 January 2022. The text is now ready for the trilogue negotiations (between the European Parliament, the European Commission and the Council) and is expected to be final in the second quarter of 2022.
The proposal text provides that the DSA will apply three months after its entry into force.
Towards a fair and open digital European market with the Digital Markets Act
Together with the Digital Services Act, the Digital Markets Act forms one of the legislative cornerstones which the European Commission wishes to implement in order to develop a fair, safe, accountable and open digital European market. The DMA will introduce new rules for large online platforms acting as “gatekeepers”.
Who?
Whereas the DSA primarily affects online intermediaries and platforms and has a more horizontal and very broad approach, the DMA works more vertically and aims to regulate the so-called gatekeeper online platforms. These are large systemic online platforms which serve as an intermediary connecting businesses and consumers for certain digital services (e.g. big tech companies such as search engines, social networks, intermediation services, cloud computing and operating systems with a strong economic and durable position in the market).
What?
The DMA introduces:
- new rules mainly aimed at preventing these gatekeepers from imposing unfair conditions on businesses and consumers;
- new obligations and prohibitions, blacklists of certain practices (e.g. gatekeeper platforms are no longer allowed to prevent users from uninstalling any pre-installed software or app);
- new regulations on the interoperability of services and on targeted advertising; and
- possibilities for the European Commission to investigate and sanction non-compliance with the DMA.
When?
The trilogue negotiations on the final text of the DMA started on 11 January 2022 and are expected to conclude in the second quarter of 2022.
It is suggested in the proposal text that the DMA should be applicable six months after its entry into force, apart from some exceptions which would apply from a different date yet to be determined.
Authors: Anneleen Van de Meulebroucke, Counsel and Justine De Meersman, Attorney
