A lot has happened since the Digital Services Act (DSA) became applicable for the very large online platforms (VLOPs), which the European Commission designated as such on 25 April 2023. Issues such as disinformation, terrorism and hate speech, particularly in the wake of the events of 07 October 2023, as well as the security and transparency of large app stores, are at the heart of measures taken by the European Commission in the meantime. Apart from that, the effective enforcement of the DSA with the aid of modern technology is also increasingly being prepared.
The European Commission's practice provides important insights, also for the future application of the DSA to smaller companies. The DSA will apply to many digital service providers in the European Union (EU) or with a substantial connection to the EU below the VLOP threshold (i.e. 45 million average monthly active users) as of 17 February 2024. This article provides an overview of the latest developments and what smaller companies can learn from them.
Content moderation and user protection: The challenges for large companies and the lessons to be learned for smaller ones
The European Commission has already set out its priorities for the application of the DSA at an early stage. This section provides an overview of the European Commission's current DSA processes and the challenges faced by VLOPs, in particular with regard to content moderation and user protection.
Proceedings over content moderation, misleading user interfaces and advertising transparency violations
The European Commission has opened formal proceedings against X. This is due to possible violations of content moderation, misleading user interfaces, transparency in advertising and access to data for researchers. In this context, the European Commission fears violations of Article 34(1) and (2), Article 35(1), Article 16(5) and (6), Article 25(1), Article 39 and Article 40(12) DSA. Another company has also been asked about how its platform can prevent the distribution of illegal content. However, this has not yet been subject to a European Commission investigation.
App store reviews
Some service providers have received enquiries from the European Commission about the security measures in their app stores. The European Commission is requesting information on the identification of systemic risks and compliance with transparency standards. The European Commission is thus investigating compliance with Articles 26, 27, 30 et seq. and 34 DSA.
Consumer protection on online trade market places
The European Commission is asking some major online trading platforms to provide details of their efforts to assess risks, protect consumers and prevent the sale of illegal products. In doing so, the European Commission is examining the compliance with Art. 27 and 30 et seq. DSA.
Protecting minors on social media
Several major service providers have been asked by the European Commission to provide information on the protection of minors. They must also disclose any risks to users' mental and physical health as well as risk assessment and mitigation measures. The European Commission is thus investigating compliance with Articles 28 and 34 DSA.
More information on ongoing cases:
A detailed list of current proceedings against VLOPs/VLOSEs can be found on the European Commission's website. This page provides an overview of the VLOPs and VLOSEs monitored by the European Commission and its main enforcement activities.
Findings for smaller service providers as of 17 February 2024
Smaller companies (below the VLOP/VLOSE threshold) should expect the national authorities to focus on the same issues as the European Commission. In particular, the topics "fight against illegal content", "fight against illegal products", "transparency of advertising", "transparency of recommender systems" and "protection of minors". In Germany, for example, there are plans to set up a central complaints office at the Federal Network Agency (BNetzA). And the Federal Criminal Police Office (BKA) is supposed to be given significant resources for the prosecution of illegal content.
Once the national enforcement structure for the DSA is implemented, actions against illegal products by associations and interest groups could also intensify. In addition to the authorities, privileged associations, so-called "trusted flaggers" (Article 22 DSA), could also come into play. Their complaints must be dealt with swiftly and with priority by the service providers. There is also the possibility that authorities from other EU Member States will issue orders to act against illegal content (Article 9 DSA), which must then have to be complied with.
Administrative measures and new transparency requirements
The enforcement of existing rules is particularly a challenge that even the European Commission cannot solve on its own. As provided for in the DSA, steps have therefore been taken to improve cooperation between the relevant authorities in the EU and to automate monitoring.
Creation of the DSA Transparency Database
The European Commission has launched the DSA Transparency Database [Article 24(5) DSA], a substantial innovation. VLOPs are now required to submit data on their content moderation decisions to this database. As of 17 February 2024, other online platforms will also be required to populate the database.
Digital services and database on general terms and conditions
The European Commission has also launched a database on general terms and conditions for digital services. This database collects the terms and conditions of online platforms and allows regulators and researchers to track changes in real-time. Online platforms below the VLOP threshold will also be included as of 17 February 2024.
Administrative cooperation
Administrative arrangements have been concluded with national authorities, such as the Dutch ACM (Authority for Consumers and Markets), to support the enforcement of the DSA. This cooperation aims to develop expertise and facilitate the exchange of information across borders.
Looking ahead
The introduction of the DSA has already brought forward profound changes for VLOPs and these developments also provide initial important insights for smaller service providers, who will also be affected by these regulatory requirements as of 17 February 2024. The transparency databases, which are already mandatory for VLOPs, could present a future challenge as well as opportunity for smaller service providers. These databases allow automated review of content moderation decisions as well as terms and conditions, which could facilitate private enforcement.
The active and rigorous enforcement practice of the European Commission in relation to VLOPs suggests that there is likely to be a more consistent application of the DSA's rules across the EU. This, together with administrative agreements between the European Commission and national authorities, signals an increasingly harmonised approach to digital market surveillance law. Smaller companies should therefore prepare for increased scrutiny and possible adjustments to their business practices.
Once national authorities and trusted flaggers can start enforcing the DSA as of 17 February 2024, there is likely to be further momentum. These developments underline the importance of proactively adapting to the changing of the regulatory requirements in the digital space.
