Key Takeaways
- The Digital Services Act (DSA) and Digital Markets Act (DMA) are unique sets of rules applied across the EU.
- They aim to create a safer digital space protecting users’ fundamental rights and establish fair competition conditions to foster innovation and competitiveness.
- Digital services are a broad category, and the laws mainly address intermediaries and online platforms.
- The laws ensure the safety of online users, establish governance protecting fundamental rights, and maintain a fair and open online platform environment.
- The rules apply to all digital services providers, especially those with a systemic role in the internal market and that act as gatekeepers.
The Dawn of a New Digital Era
The European Union has always been at the forefront of drafting legislations that shape the global technological landscape. With the recent adoption of the Digital Services Act (DSA) and the Digital Markets Act (DMA), the Union aims to craft a safer digital space that protects the fundamental rights of all digital service users, while also fostering innovation, growth, and competitiveness in the European market and globally.
Understanding Digital Services
Digital services encompass a broad category of online services, ranging from simple websites to internet infrastructure services and online platforms. The DSA and DMA are primarily concerned with intermediaries and online platforms, including online marketplaces, social networks, content sharing platforms, app stores, and online travel and accommodation platforms.
The Digital Markets Act lays down rules for online gatekeeper platforms, which are digital platforms with a systemic role in the internal market, acting as bottlenecks between businesses and consumers for significant digital services. Some of these services are also covered by the Digital Services Act, but for different reasons and with different types of provisions.
The Need for DSA and DMA
Digital services have immensely influenced our daily lives, making it easier in numerous ways. We use them to communicate, shop, order food, find information, watch movies, listen to music, and for various other activities. Digital services have also made it easier for businesses to trade across borders and access new markets.
However, despite the numerous benefits of digital transformation, it comes with its own set of challenges. A major concern is the trade and exchange of illegal goods, services, and content online. Online services are also misused by manipulative algorithmic systems to amplify the spread of misinformation and for other harmful purposes. These challenges and how platforms address them significantly impact online fundamental rights.
Ensuring Fair and Open Online Platforms
As the 2020s dawned, despite a series of specific sectoral interventions at the EU level, there remained significant gaps and legal burdens to address. For instance, some large platforms control significant ecosystems in the digital economy. They have emerged as gatekeepers in the digital markets, with the power to act as private rule-makers. These rules sometimes result in unfair conditions for businesses using these platforms and lesser choices for consumers.
Thus, the European Union has adopted a modern legal framework that ensures the safety of online users, establishes governance with the protection of fundamental rights at its forefront, and maintains a fair and open online platform environment.
The Road Ahead
After the adoption of the digital services package in the first reading by the European Parliament in July 2022, both the Digital Services Act and the Digital Markets Act have been adopted by the Council of the European Union, signed by the presidents of both institutions, and published in the Official Journal.
In the case of online platforms, they need to publish their number of active users by no later than February 17, 2023. If a platform or a search engine has more than 45 million users (10% of the population in Europe), the Commission will designate the service as a very large online platform or a very large online search engine. These services will have four months to comply with the DSA obligations, which includes conducting and providing the Commission their first annual risk assessment. EU Member States will need to appoint digital service coordinators no later than February 17, 2024, when also platforms with fewer than 45 million active users will have to comply with all the Digital Services Act rules.
Conclusion
The Digital Services Act and Digital Markets Act stand as a testament to the European Union’s commitment to creating a safer and fairer digital environment. As these acts come into force, they promise to usher in a new era in digital services, paving the way for enhanced user protection, fairer competition, and sustained innovation in the digital sphere. The effects of these acts will undoubtedly resonate beyond the boundaries of the EU, influencing global digital services policy and providing a model for countries worldwide to emulate. The European Union, once again, leads the charge in shaping the digital future.
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