In 2022 the European Union passed in one legislative package the Digital Services Act (DSA) and the Digital Markets Act (DMA), but they function as two distinct laws. Their aim is to prevent companies that have a dominant position in the digital world from abusing their monopoly position vis-à-vis competitors or customers, by forcing them to be more open and compatible. The DSA introduces new obligations for online platforms such as stricter content moderation and provision of more transparent information on how data is collected and used while the DMA directly centres on alleged anticompetitive behaviour of what it calls “gatekeeper platforms” such as Google, Amazon and Meta with its rules on digital advertising, app stores and online messaging. The common aim is that both laws call for Big Tech providers to be more accountable for what happens on their platforms.
The DMA’s noncompliance fines can be as much as 10% of a company’s yearly global revenue, or 20% for repeat offenses. The DSA has a maximum fine for an online platform or search engine of 6% of worldwide revenue.
DIGITAL SERVICES ACT (DSA)
The DSA is a breakthrough new set of EU rules which covers all digital services that connect consumers with goods, services, or content. It creates comprehensive new obligations for online platforms to reduce harm and combat risks in the online environment, introduces strong protections for users’ rights in the online environment and builds a unique new transparency and accountability framework for digital platforms. The new rules include new obligations:
to limit the spread of illegal content and products online;
to increase protection for minors which covers bans on targeted advertising on online platforms by profiling children or based on special categories of personal data such as ethnicity, political views or sexual orientation;
to randomly check by online market places against existing databases whether products or services on their sites are compliant;
a ban on using so-called ‘dark patterns’ on the interface of online platforms, referring to misleading tricks that manipulate users into choices they do not intend to make;
a new crisis response mechanism in cases of serious threat for public health and security crises, such as
a pandemic or a war and others.
In addition, very large online platforms and search engines will have to carry out a comprehensive risk assessment that could threaten fundamental rights, including freedom of expression, protection of personal data, freedom and plurality of the media in the online environment, as well as the rights of the child.
The Commission will have the power to directly supervise very large online platforms and very large search engines, i.e. platforms that have 10% of the EU population in their user base, which is around 45 million users, while other platforms will be under the supervision of Member States where they are established.
DIGITAL MARKETS ACT (DMA)
Theaimofthenewactistoputanend to unfair practices by companies that act as gatekeepers in the online platform economy. The DMA includes criteria for determining when a large online platform is considered as a “gatekeeper” and directly prohibits certain forms of their behaviour.
The Digital Markets Act applies to a company if it meets the following three main criteria:
a size that impacts the internal market: if a company achieves a certain annual Union turnover and provides a core platform service in at least three Member States;
control of an important gateway for business users towards final consumers: if the company provides essential platform services to more than 45 million monthly active end users established or located in the EU and to more than 10,000 yearly active business users established in the EU;
an established and durable position: those instances when the company has met the second criterion during the last three years.
The DMA focuses on competition and prohibits tech giants from
ranking their own products and services more favourably on their platforms than third-party products;
preventing consumers from linking up to businesses outside their platforms;
preventing users from un-installing any pre-installed software or app if they wish to;
processing users’ personal data for targeted advertising.