On 23 April 2022, the European Parliament and the Council of the European Union reached a political agreement on the Digital Services Act (DSA), as proposed by the European Commission in December 2020.
You can read about the background to the DSA in our blog here and about the practical implications of the proposal for various businesses here.
Scope of the DSA
The DSA will cover various online intermediaries and their respective obligations shall depend on their role, size and impact on the online ecosystem. The DSA’s coverage includes the following online intermediary services:
- intermediary services offering network infrastructure (including internet access service providers and domain name registrars);
- hosting services (including cloud computing and webhosting);
- very large online search engines that have more than 45 million consumers in the EU;
- online marketplaces, but also and more generally online platforms that link sellers and consumers, such as social media platforms and app stores; and
- very large online platforms with a reach of more than 10% of the EU’s 450 million consumers, which could pose greater societal risks, for instance, of disseminating illegal content.
Key compromises
The political agreement reached on the DSA follows various compromises, including:
- a compromise on the European Parliament’s proposal to permit all medium-sized businesses to operate online marketplaces without being obliged to monitor for illegal goods. The agreed text will provide such an exemption only for businesses that qualified as small or micro-sized businesses in the preceding 12 months;
- in relation to a proposed general ban on so called “dark patterns”, the DSA will only cover those practices that are not already covered by the Unfair Commercial Practices Directive or GDPR; and
- in relation to the enforcement of a proposed ban on targeted advertisements for minors, the platforms will only need to refrain from running targeted advertisements if they are aware that the user is a minor.
Other key takeaways
Other key takeaways from the political agreement on the DSA include:
- stricter protocols for platforms with more than 45 million consumers, including the requirement for such platforms to pay a supervisory fee to the European Commission totalling 0.1% of global annual revenues, the proceeds of which will be used to help enforce the DSA; and
- the possible imposition of fines totalling up to 6% of global turnover for certain violations.
Next steps
The political agreement reached on the DSA will now need to be approved by the European Parliament and the Council of the EU. Once adopted, the DSA as a regulation will be directly applicable throughout the EU and will apply 15 months after entry into force, or from 1 January 2024, whichever is later. However, with respect to very large online platforms and very large online search engines, the DSA could apply sooner, i.e. four months after their designation.
Read the European Commission's press release 'Digital Services Act: Commission welcomes political agreement on rules ensuring a safe and accountable online environment' and the updated Q&A.
