Digital Services Act (or short: DSA) is the EU’s regulation, which outlines rules for intermediary platforms and services, operating within the territory of the European Union.
Scope of Action
Unlike the EU’s Digital Markets Act (DMA), the Digital Services Act establishes obligations for online intermediaries, like social media (“Very Large Online Platforms”), search engines (“Very Large Online Search Engines”), web hosting services, online marketplaces, app stores, collaborative platforms, Internet access providers, domain name registrars, etc., aimed at protecting End Users’ rights and preventing the spread of disinformation and inappropriate content.
Particularly, the DSA is also designed to ensure the highest level of protection of minors’ rights online by forcing digital platforms to offer the highest possible levels of privacy and security to users younger than 18 years of age (Article 28).
In this respect, Very Large Online Platforms, for instance, are obliged to conduct annual security checks and undergo the independent audit in order to ensure they adopt adequate measures to minimize potential risks for young people and children, who might be using their services (Article 34, Article 35), including the setup of parental controls, effective age verification mechanisms and practical tools helping to report inappropriate content easily.
The platforms also need to establish a working mechanism to act upon the flagged content fast enough to prevent the spread of illegal, harmful or otherwise abusive materials in the most efficient way.
Certainly, the platforms are prohibited from asking End Users to overshare their Personal Data and using the so-called “dark patterns” in their interface design, while children and young people are to be protected from the use of their individual information for profiling purposes. More importantly, Very Large Online Platforms are required to disclose detailed information about their advertising practices publicly on their digital properties in a comprehensive manner, with examples of who paid for which adverts, particularly if these target minors (Article 39).
Penalties & Fines
According to the regulation, the supervisory measures are to be taken by the specifically designated competent authorities and Digital Services Coordinators (Article 49), and in case of the DSA violations, the platform concerned is subject to the fine in the amount of 6% of its global turnover in the preceding fiscal year (Article 52).
Submission of misleading, incorrect or incomplete information and failure to submit to an independent audit or inspection is also subject to a fine, i.e. in the amount of 1% of the company’s annual income or global turnover in the preceding fiscal year, while the maximum volume of periodic penalty is set to 5% of the avg. daily global turnover in the preceding fiscal year.
Enforcement Time Frame
Even though the DSA came into effect back in November 2022, its final provisions for all online platforms and intermediary services came into force in February, 2024, hence the visible results are likely to come in the public eye closer to the beginning of 2025.