What Does the DSA Mean for Your Business?

On July 5th 2022, the European Parliament voted in favor of adopting the Digital Services Act, moving one step closer to this landmark regulation’s implementation. This regulation aims to create a safer digital environment where users, businesses, governments, and civil society can all flourish. 

Acknowledging the immense benefits the Internet has brought to humanity, the DSA builds on the central principles that what is illegal offline, should be illegal online, and that more should be done to tackle the spread of illegal and harmful content online, such as terrorist content and child sexual abuse material. 

Who does the DSA apply to? 

The DSA applies proportional rules for online intermediary services, depending on the size and type of services an organization offers. The DSA defines four categories of services:

  1. Providers of intermediary services – Examples include internet service providers, content distribution networks, DNS services, VOIP services, web-based messaging and e-mail services, etc.
  2. Providers of hosting services – Examples include webhosting or cloud services.
  3. Online platforms – Examples include social networks, online marketplaces, app stores, online travel and accommodation websites, content sharing websites, etc. 
  4. Very large online platforms (VLOPs) – Any online platform that has more than 45 million average monthly users in the EU. 

Obligations under the DSA

Additionally, micro and small enterprises* are exempt from obligations for online platforms and VLOPs. However, they will be required to communicate the average number of active monthly users of their service to the competent authorities.

Enforcement and Implementation

Under the DSA, all EU Member States will designate a Digital Services Coordinator (DSC) – to supervise the providers of online services and the enforcement of the regulation. The DSC will have the power to carry out inspections, penalize infringements, impose fines or periodic penalty payments, as well as request the temporary restriction of the service in case of a continued or serious offense. Finally, the Commission will be the exclusive enforcer of systematic obligations on VLOPsand has the power to intervene upon DSC requests. 

Failure to comply with obligations can result in fines of 6% of the annual worldwide turnover of the preceding fiscal year. Furthermore, failure to provide complete and correct information for an inspection can result in fines of 1% of the annual income or worldwide turnover for the provider. 

Implications for your business

The DSA imposes a number of new obligations for online service providers and introduces hefty fines to ensure compliance. To avoid these, providers of online services must implement a number of operational changes. Most immediately, providers need to declare a single point of contact and legal representative in the EU, who can be held liable for offenses. Hosting services, online platforms, and VLOPs also need to ensure they have well-designed and easy-to-use notice-and-action and complaint-handling mechanisms in place, and that they implement the appropriate tools to process law enforcement, trusted flaggers, and out-of-court dispute bodies’ requests

Additionally, online marketplaces will be subject to a specific set of rules that will impact the way they design their platform, show advertisements, and deal with traders and consumers. The protection of minors is also central to the regulation and providers will have to implement child protection measures such as age verification and other risk assessments. 

Concretely, providers of online services will have to adopt a streamlined set of processes that allow for continuous compliance, notably with obligations such as transparency reporting and independent audits

How can Tremau help you?

Tremau’s solution provides a single trust & safety content moderation platform that prioritizes compliance as a service and integrates workflow automation and other AI tools. The platform ensures that providers of online services can respect all DSA requirements while improving their key trust & safety performance metrics, protecting their brands, increasing handling capacity, as well as reducing their administrative and reporting burden.

To find out more about how the DSA will impact you, contact us at info@tremau.com

* Micro and small enterprises are those with a staff headcount of less than 50 and a turnover of less than €10 M. They are exempt from certain obligations falling upon online platforms.

Tremau Policy Research Team

Building a safe and compliant digital world

info@tremau.com

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