Digital Services Act – An EU Revolution in the Online World?

The Digital Services Act (DSA) has been in force in the European Union since 17 February this year. It represents another step, this time at the EU level, aimed at regulating the provision of digital services by online platforms. However, it is essential to consider who the provisions of the DSA are truly aimed at, who they are intended to protect, and whether they will do so effectively.

What is the DSA?

Regulation (EU) 2022/2065 on a Single Market for Digital Services, also known as the Digital Services Act or DSA, is a set of EU-wide rules governing digital services that act as intermediaries for consumers and for goods, services, and content. In the context of the DSA, digital services refer to intermediary services such as:

– hosting services,

– online marketplaces,

– social media networks.

The EU legislator’s goal is to create a safer virtual world by mandating through this regulation that Member States adapt their national laws to equally protect all internet users within the European Union. According to representatives of the European Commission, this regulation ensures, among other things, transparency in advertising by banning certain types of targeted advertising, such as ads using sensitive data or data of minors.

Who is it aimed at?

The Digital Services Act applies to all intermediaries and online platforms operating within the European Union. The DSA differentiates the scope of obligations depending on the size of the entity. Micro and small enterprises are exempted from some regulations that could be overly burdensome for them. However, very large online platforms and search engines (VLOP and VLOSE) are subject to additional obligations. According to the regulation, very large platforms and search engines are those used by at least 10% of the EU population, equivalent to at least forty-five million users.

What platforms are classified as VLOP and VLOSE?

Examples of VLOP (Very Large Online Platforms) include:

– Facebook,

– Instagram,

– LinkedIn,

– TikTok,

– Wikipedia,

– YouTube.

Examples of VLOSE (Very Large Online Search Engines) include:

– Bing,

– Google Search.

The regulation applies to intermediary services offered to service recipients who are established or located in the European Union, regardless of the location of the providers of these intermediary services. The DSA does not apply to services that are not intermediary services, nor to requirements imposed on such services, regardless of whether such a service is provided through the use of an intermediary service.

How does the DSA counteract misinformation?

The Digital Services Act introduces several obligations to counteract the spread of misinformation, including:

– Requiring VLOP and VLOSE to conduct risk assessments regarding various aspects of their services. These assessments should cover risks arising from their design, operation, or use, such as coordinated disinformation campaigns. They should consider the methods used in VLOP and VLOSE services to introduce or amplify and legitimize misleading content. Based on these risk assessments, online platforms are required to implement measures to mitigate the threat of misinformation.

– VLOP and VLOSE must have a crisis response mechanism, which should include various measures to be taken in the event of the platform being used to spread false information.

– Besides the provisions limiting targeted ads, the DSA requires VLOP and VLOSE to maintain a public ad repository. This aims to create a sort of threat catalogue that can help in developing mechanisms to combat disinformation campaigns.

What about advertising?

The DSA stipulates that platform providers displaying advertisements on their interfaces must ensure that for each specific ad shown to individual users, the users can clearly, unambiguously, and in real-time recognize that the information presented is an advertisement. This includes visible and precisely worded labels and the ability to verify on whose behalf (whether a natural or legal person) the advertisement is presented. Additionally, users should be able to identify who paid for the advertisement and have easy access to relevant information directly from the ad about the main parameters used to determine the recipient to whom the advertisement is shown (and, where applicable, how to modify those parameters).

Platform providers are required to provide a function that allows users to declare whether the content they provide is commercial information or contains commercial information. When a user makes such a declaration, the platform provider must ensure that other users can transparently and in real-time (including through visible labels) determine that the content provided by the user constitutes or contains commercial information consistent with that declaration.

At first glance, it seems that the DSA defines advertising very broadly. It appears to cover information provided by any entity, regardless of whether it is commercial or not. Advertising, according to the DSA, means information intended to promote the message of a legal or natural person, regardless of whether for commercial or non-commercial purposes, and presented by an online platform on its online interface for remuneration, specifically for promoting that information. However, to qualify as advertising under the DSA, the information must meet several other conditions. Consequently, not every piece of information shared on an online platform is considered an advertisement; only those presented for a fee (the fee pertains to sharing that specific information).

The situation is different for internet creators (so-called influencers), who primarily earn through paid collaborations. These generally involve posting content on platforms like TikTok or Instagram, promoting various products such as cosmetics or clothing. In such cases, the influencer typically receives the payment directly, not the platform hosting the content. Under this practice, such activity does not fall under the DSA’s definition of advertising, meaning the regulation does not apply to influencer activities per se. However, this issue requires a separate article dedicated to it.

How is the implementation process progressing?

As part of implementing the DSA into national law, the Ministry of Digital Affairs has initiated work on a draft amendment to the Act on the Provision of Electronic Services, which is currently under review. According to the justification for this amendment, national legislation must introduce provisions to ensure effective application of the DSA’s regulations without duplicating them or causing conflicts.

National regulations particularly require:

– Institutional provisions concerning the appointment of a Digital Services Coordinator (President of the Office of Electronic Communications) and relevant authorities (President of the Office of Electronic Communications, President of the Office of Competition and Consumer Protection), along with defining their competencies,

– Procedures before and cooperation between authorities, such as conducting inquiries, inspections, and proceedings before the relevant authorities.

Summary

Considering the various dynamic online activities over the past few years, it is undeniable that the aim of the Digital Services Act is entirely justified. In the era of widespread internet access, most of us use various online platforms for information, shopping, commerce, and more. Many have encountered misleading content or even scams aiming to defraud money or personal data. This underscores the necessity of regulations establishing various control mechanisms. However, it is too early to assess their practical effectiveness – this issue remains open for now.

For those interested in the DSA, we encourage you to contact our experts.