Written by: Brad Morrison

We live in a digitalised society! A huge driving force behind this digitalisation has been the importance of digital services such as the online marketplaces, social networks, content sharing platforms and many others that now have a significant impact on our day-to-day lives. The use of these services have become the norm and many would agree that they make our lives a whole lot easier.

Although widely beneficial, the development of digitalisation is accelerating at an alarming rate, which leaves some cause for concern that must be controlled. Some of the problems arising from digital services include but are not limited to:

• Trade and exchange of illegal goods, services and content online.
• Harmful and manipulative, algorithmic systems spreading misinformation 
• A few large platforms now control important ecosystems in the digital economy and have the power to act as private rule-makers; often resulting in unfair conditions for businesses using these platforms, and giving less choice for consumers.

Control measures are very necessary, digitalisation is evolving and so EU legislation must evolve with it. Hence, early 2022, in the months of March and April, the Digital Markets Act and Digital Services Act were politically agreed, and they will be in effect from 2024.

So, what is the Digital Services Act? It introduces a set of new rules for digital services in relation to citizens, providers of digital services, business users of digital services, and for society. These rules aim to:

1. Better protect consumers and their fundamental rights online
2. Establish a powerful transparency and a clear accountability framework for online platforms 
3. Foster innovation, growth and competitiveness both in the EU single market and globally

The digital services act primarily targets online intermediary services: 

• (IS) – Intermediary services (network infrastructure e.g. internet access providers)
• (HS) – Hosting services (e.g. cloud and web hosting services) 
• (OP) – Online platforms (e.g. marketplaces, social media, app stores)
• (VLOP) – Very large online platforms (10% of 450 million EU consumers)

The new obligations of the Digital Services Act are proportionate to their role, size, and impact in the online ecosystem and include, but are not limited to, the following: 

• Transparency reporting. (IS, HS, OP, VLOP).
• Terms of service. (IS, HS, OP, VLOP).
• Reporting of criminal offences (HS, OP, VLOP)
• Notice, action and obligation to provide information to users (HS, OP, VLOP)
• Trusted flaggers (HS, VLOP)
• Special obligations for marketplaces e.g. vetting credentials of third parties ( HS, VLOP)
• Bans on targeted adverts to children and those based on special characteristics of users (HS, VLOP)
• Risk management obligations and crisis response (VLOP)
• External and independent auditing, internal compliance function and public accountability (VLOP)
• Data sharing with authorities and researchers (VLOP)

Impact of obligations for digital services/platforms, businesses and users include but are not limited to:

• Measures to counter illegal goods, services or content online
• Effective safeguards for users
• Transparency measures for online platforms
• VLOP no longer able to abuse their systems due to risk management an audit 
• Researchers now have access to data to assess and report how online intermediaries operate
• All digital services will have to comply with these new rules and obligations
• The EU Board for Digital Services will act as a supervisory authority, overseeing the complexity of the digital space, with particular focus on the monitoring of VLOP

For further information regarding the impact which the Digital Services Act will have on you in the near future, don’t hesitate to contact us via email through info@bivika.com.