Digital Service Act & Digital Markets Act - European Union's new legislation to modernize regulation in digital services
By Beatriz Santos Mayo, 5 minutes
We must make sure that European laws change with the new situations. The European Union is a digital environment that protects users' fundamental rights and creates a level playing field that promotes innovation and progress. The core of digital innovations that impact our lives is the quick and widespread proliferation of digital services. Europe needs a cutting-edge legal system that protects users' privacy online, builds governance with the defense of fundamental rights, and upholds a transparent online platform.
One of the aims of the European Union regarding the digital environment is to protect the user's fundamental rights and create a level playing field that promotes innovation and progress.
“A Europe fit for the digital age” is a regulatory project where the Commission is committed to making this the "Decade of Digital" in Europe. With a strong focus on data, technology, and infrastructure, Europe aims to reinforce its digital sovereignty and define its norms rather than adopting those of others.
Inside “A Europe fit for the digital age” project, we have 15 different regulations and directives that manage the digital regulatory landscape. We can find the Digital Service Act and Digital Markets Act inside these legislative projects.
Digital Service Act - your information is valuable online
The Digital Service Act is going to protect consumers. The idea behind the new rules is that anything which is illegal offline should be illegal online too. This guarantees that internet service providers will be accountable for their content control practices. The DSA's laws apply to online intermediaries and platforms.
New rules are necessary to set transparent and fair standards for the platforms. The legislation contains, among others, the following:
Online platforms will be required to delete illicit content, including counterfeit and dangerous goods promptly.
Under the "know your business customer" principle, online marketplaces may be compelled to track their traders, and any murky patterns intended to influence users' online behavior will be severely forbidden.
The online platforms must agree with new regulations and apply them. The upcoming rules are designed to work harmoniously with current tech laws. This implies that prior attempts to comply with current cybersecurity requirements or data protection legislation will be worthwhile. Although new legislation adds more regulations and prohibitions, they still need to leave room for innovation. These new rules establish a safer and new market that offers consumers better and more innovative technologies.
Digital Markets Act - Gatekeepers in the spotlights
Online platforms that act as gatekeepers are governed by the Digital Markets Act. Gatekeepers are businesses on the internet that save your information in their databases. Only a small number of significant online media outlets that act as gatekeepers will be subject to the obligations of this Act. The DMA lays out a list of guidelines that businesses recognized as digital gatekeepers must follow. For instance, the new regulations prohibit big platforms from favorably ranking their own goods or services and tracking users' online activity for targeted advertising without their permission.
Under the DMA, gatekeepers are subject to several and significant requirements, including:
Use transparent, equitable, and non-discriminatory rating criteria when presenting goods and services to customers. Gatekeepers are now permitted to treat their products and services better than other businesses that engage with customers through the gatekeeper platform.
Gatekeepers must be transparent about the cost and effectiveness of advertising services.
Without the user's express consent, gatekeepers are not permitted to combine personal information about end users obtained through their core platform with data obtained from other services they offer or those of third parties.
The European Commission will enforce the DMA with assistance from the member states’ competition authorities. Under the DMA, the Commission will only have the power to bring legal action, decide which laws have been broken, and take further action. Businesses will benefit from greater equality, transparency, and a more fair and competitive market. Consumers,on the other hand, will benefit from a better variety of choices, better data protection, and the advantages of interoperability and data portability.
What is next?
The DSA will be directly applicable throughout the EU 15 months after it enters into force or starting January 1, 2024, whichever will come first. The DSA will take effect four months following its designation regarding the responsibilities for big online platforms and large online search engines.
The DMA was published in the Official Journal of the European Union on October 12, 2022. The DMA will take effect immediately if a given firm is named a gatekeeper, but this will only happen around August or September 2023. The fundamental dos and don'ts will be in effect only six months after designation. So, the DMA won't fully apply until approximately February or March 2024.
