On 15 December 2020, Commission announced two long-awaited legal acts aiming at regulating the online platform economy in the EU: Digital Services Act (DSA) and Digital Markets Act (DMA).
Please note that this article will be further updated as more information on the legislation is available.
Digital Services Act
The DSA aims to create uniform rules to make an online world a safe, reliable and secure space for users. During the press conference that accompanied the launch, Commissioner Vestager stressed that we should be able to trust in what we see and buy online. It has three main pillars:
1. Ensuring more safety for users by protecting them from illegal and harmful content while preserving the right to freedom of expression, obliging the platforms to swiftly remove illegal content but also to explain why this happened and given an option to complain about it and through a priori checks of customers who become users of platforms.
2. Transparency obligations for platforms which will now be obliged to provide more information about how they work.
3. Ensuring better enforcement at national and EU level through: opting for a regulation based on the Single Market legal basis (Article 114), setting up of the position of the Digital Services Coordinator, imposition of fines of up to 6% of the annual income or turnover of the provider concerned.
The threshold for operations to be caught by these obligations is at least 45 million users in the EU.
Digital Markets Act
While the DSA applies to all services, the DMA applies to gatekeepers and it is designed to complement the current competition rules. The gatekeepers are defined by their role in the marketplace, their size and their durability. These are typically large players, operating as gatekeepers, that is they are placed in between a large number of businesses and an even larger number of customers, and they have had this position over some time. This can give them unfair advantage and may often result in an unbalanced relationship.
If a gatekeeper falls within the scope of the DMA, it will have several obligations concerning:
- use of data and its sharing;
- interoperability of its services; and
- avoiding self-preferencing (own services treated more favourable than those of competitors).
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