In 2022, the European Union (EU) approved the Digital Services Act (DSA), a new legal framework aimed at addressing illegal content, transparent advertising, and disinformation on online intermediaries. The DSA was introduced to harmonise different national laws in the EU that were passed to address illegal contents. The Act is expected to have a significant impact on large tech companies like Google, Twitter, and Meta, as it imposes stricter rules and obligations on them.
What is the Digital Services Act?
The Digital Services Act is a legislative proposal introduced by the EU to update the legal framework governing online intermediaries. The Act was created to address concerns related to illegal content, transparency in online advertising, and disinformation on social media platforms. The DSA aims to ensure that online intermediaries take responsibility for the content they host, and that they take proactive measures to prevent the spread of harmful content on their platforms.
Impact on Tech Giants
Under the Digital Services Act, large tech companies with more than 45 million users are categorised as Very Large Online Platforms (VLOPs). These companies are subject to strict rules and obligations under the law, such as risk management, external and independent auditing, and transparency obligations. The companies are mandated to share data with EU authorities and researchers and adopt a code of conduct, failing which they could face a fine.
The DSA also introduces new requirements for online platforms to remove illegal content promptly. The Act requires VLOPs to put in place measures to detect, report, and remove illegal content, including hate speech, terrorist content, and child sexual abuse material. Failure to remove such content within a specified timeframe could result in hefty fines.
The Act also mandates that VLOPs provide users with clear and transparent information about the nature and origin of online advertising. Online platforms must disclose to users the identity of the advertisers and the criteria used to display ads. They must also ensure that advertising is clearly marked as such, and that it is not presented in a way that could be confused with editorial content.
Impact on Smaller Online Platforms
The Digital Services Act also affects smaller online platforms. Platforms with less than 45 million users are not classified as VLOPs but are still required to comply with certain obligations. These platforms must put in place measures to detect and remove illegal content, including hate speech and child sexual abuse material. They are also required to have a transparent policy on advertising and disclose the identity of advertisers.
Benefits of the Digital Services Act
The Digital Services Act is a significant step towards creating a safer and more transparent online environment. The Act aims to ensure that online intermediaries take responsibility for the content they host, and that they take proactive measures to prevent the spread of harmful content on their platforms.
The DSA is expected to benefit consumers, who will have access to more transparent and reliable information about online advertising. The Act will also benefit businesses, who will be subject to fair competition rules and a more level playing field. The DSA is also expected to promote innovation and competition in the online market, as it creates a more predictable and stable regulatory environment.