European Union green light on the regulation of large platforms: Agreement on the Digital Services Act (DSA)

25 October 2022
Corinne Thiérache

On April 23, 2022, almost a month to the day after the adoption of the provisional political agreement on the Digital Markets Act (DMA) on March 24, 2022, an agreement was finally reached between the European Parliament and the Council of the European Union on the Digital Services Act (DSA) to modernize the rules applicable to digital services.

This legislation, which has yet to be formally and finally adopted, sets a new standard for the liability of online platforms for illegal and harmful content.

The European Union's intention is to put into practice the principle that what is illegal offline is also illegal online. Thus, the DSA aims to put in place a new liability framework for large digital platforms.

More broadly, the objective is to better protect the fundamental rights of users on the Internet by setting rules with which actors meeting the conditions set out in the DSA will have to comply, in a manner commensurate with their capacity and size, when providing their services to EU nationals.

The obligations of the various actors can be classified into three categories:

  • The fight against illegal content. In this perspective and as an example, marketplaces will have to better trace sellers and better inform consumers. In addition, although these online platforms retain the qualification of hosters limiting their liability for published content, they will have to offer a tool allowing users to report illegal content and products and to designate a "contact point" in each Member State that will serve as a privileged interlocutor with the judicial institutions.
  • Online transparency. In this respect, platforms will be obliged to explain the algorithms they use to recommend certain advertising content based on users' profiles and will have to make available to the public a register of advertisements containing various information.
  • Risk mitigation and crisis response. The very large platforms and the very large search engines, i.e., those used by more than 45 million Europeans per month, which will be listed by the European Commission, will have to carry out independent risk mitigation audits every year, under the control of the European Commission.

In terms of personal data, the DSA provides new guarantees for the protection of minors and limitations on the use of sensitive personal data for targeted advertising.

The substantial penalties, which can go up to 6% of global turnover or even a ban on activities in the European Union's single market in the event of serious and repeated violations, should encourage online platforms to comply and thus put an end to the opacity in which they have been operating until now.

Once finally adopted, the DSA will be directly applicable in all Member States and will be enforced fifteen months after its entry into force or from January 1, 2024, whichever is later. For very large online platforms and search engines, the DSA will apply earlier, i.e. four months after their designation.

The year 2022 marks the European Union's involvement in the digital economy and the development of digital technology. Indeed, in addition to the DSA, other important texts have been initiated within the European Union, such as the aforementioned Digital Market Act, but also the Data Governance Act and the Data Act, which aim to develop a single market for data.

European Union law is intended to be a complex law, in order to effectively protect the rights and interests of the various operators, whether companies or consumers, and also to ensure freedom of the press, with the recent adoption of the Media Freedom Act. These regulations are in particular a response to a strong political expectation of the French government, which wants to see the European Union promote its own model. Through these different texts establishing common rules for the Member States, the European Union reinforces its digital sovereignty and there is no doubt that these provisions will have a real impact in France, between prevention and repression. 

Corinne Thiérache, Partner