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Digital Services Package: EU establishes a thorough standard for regulating digital space

On 5th July 2022, the European Parliament adopted the Digital Services Act and the Digital Markets Act.

Digital Services Act

According to a press release of the European Parliament, the Digital Services Act (DSA) sets clear obligation for digital service providers to tackle the spread of illegal content, online disinformation, and other societal risks.

The newly implemented requirements include:

  • Measures to fight online illegal content,
  • Improved traceability and checks on traders in online marketplaces,
  • Improved transparency and accountability of online platforms,
  • Banning targeting children and ads based on sensitive data, and
  • Prohibition of “dark patterns” and misleading practices aimed at manipulation users’ choices.

The threshold is set even higher for very large online platforms and search engines (45 million or more monthly users). Also, they will be required

  • to prevent dissemination of illegal content and the adverse effects on fundamental rights, electoral processes, gender-based violence or mental health.
  • to provide users with the choice not no receive recommendations based on profiling and to facilitate access to their data and algorithms to authorities and vetted researchers.

Failure to comply with the newly implemented requirements can attract significant fines – up to 6% of the annual worldwide turnover of the provider of intermediary services concerned in the preceding financial year.

Digital Markets Act

On the other hand, the Digital Markets Act (DMA) follows a competition law-based approach, setting obligations for large online platforms, the so called “gatekeepers” (platforms whose dominant online position make them hard to avoid designated as such by the Commission).

Such obligations include:

  • Allowing third parties to inter-operate with their services to avoid the so-called “lock-in” effect,
  • Allowing business users to access the data they generate in order for them to promote their own offers and conclude contracts with customers outside the gatekeeper’s platforms,
  • Prohibition of ranking their own services or products more favourably,
  • Allowing users to easily un-install any pre-loaded software or apps,
  • Allow users to use third-party applications and app stores, and
  • Prohibition of processing personal data for targeted advertising without an expressly given consent.

Failure to comply with the requirements of the DMA may attract fines of up to 20% of the company’s total worldwide turnover in the preceding financial year.

Once formally adopted by the Council in July (DMA) and September (DSA), both acts will be published in the EU Official Journal and enter into force twenty days after publication. The DSA will be directly applicable across the EU and will apply 15 months or from 1 January 2024 (whichever comes later) after the entry into force.

As regards the obligations for very large online platforms and very large online search engines, the DSA will apply earlier – four months after they have been designated as such by the Commission. The DMA will start to apply six months following its entry into force. The gatekeepers will have a maximum of six months after they have been designated to comply with the new obligations.

For more details on the topic, please contact Cosmina Simion and Petruș Partene.

The Romanian version of this digest is available here.

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