The EU's new rules set unprecedented accountability requirements for online companies in an open and competitive digital market.
On Tuesday, July 5, 2022, the final vote on the new Digital Services Act (DSA) and the Digital Markets Act (DMA) took place in Parliament. Parliament and the Council agreed accordingly on March 24th and April 23rd. The two laws are intended to address the impact of the technology industry on society and the economy. The aim is to set clear standards for the business activities and services of technology companies that are consistent with the fundamental rights and values of the EU.
The Digital Services Act was approved by 539 votes to 54 with 30 abstentions. The Digital Markets Act was approved by 588 votes to 11 with 31 abstentions.
What is forbidden outside the Internet should also be forbidden on the Internet
The Digital Services Act (DSA) clearly obliges providers of digital services such as social media or marketplaces to take action against the spread of illegal content, disinformation and other threats to society. The requirements placed on the platforms are proportionate to their size and the risks they pose to society.
The new commitments include new measures to combat illegal online content and the commitment of platforms to respond quickly , while respecting fundamental rights, such as: E.g. the right to freedom of expression and data protection must be respected, more traceability and controls of traders on online marketplaces to ensure that products and services are safe, e.g. Greater transparency and accountability of platforms , e.g. by using spot checks to determine whether illegal content resurfaces. B. by providing clearer information about content moderation or the use of algorithms that recommend certain content, so-called recommendation systems, which allow users to challenge content moderation decisions, prohibiting misleading practices and certain types of targeted advertising , such as advertising to children and advertising based on sensitive data. The so-called dark patterns and misleading practices that fraudsters use to manipulate user decisions are also banned.
Very large online platforms and search engines, which are used by more than 45 million people a month and which pose the greatest risk, will from now on have to comply with stricter requirements, which the Commission is enforcing. You need to mitigate systemic risks . These include the spread of illegal content and adverse impacts on fundamental rights, electoral processes, gender-based violence or mental health. They must also be independently verified . The platforms must also ensure that users can reject recommendations that are based on the creation of profiles. They must also grant authorities and approved researchers access to their data and algorithms .
What gatekeepers are and are not allowed to do
The Digital Markets Act (DMA) sets obligations for large online platforms that act as so-called gatekeepers in the digital market. They are platforms that determine market access and are therefore difficult for consumers to avoid. The law is intended to create a fairer business environment and more services for consumers.
To prevent unfair business practices, platforms classified as gatekeepers must ensure the following:
Their services must be compatible with those of third parties . This means that smaller platforms can demand that dominant messaging platforms allow their users to exchange messages, voice messages or files via messaging apps. This gives users more choice. This also prevents provider lock-in, meaning that you can only use a specific app or platform.
Business users must be able to access their data on the gatekeeper's platform , promote their own offers and conclude contracts with their customers outside the gatekeeper's platform.
Gatekeepers are no longer able to
- to rate their own services or products on their platforms better than those of third parties and thus to favor their own company,
- Prevent users from easily uninstalling pre-installed software or apps or using third-party applications and app stores,
- to use users' personal data for targeted advertising unless they expressly agree to this.
Sanctions
The Commission can carry out market investigations to ensure that the new rules are properly implemented and keep pace with the dynamics of the digital sector. If a gatekeeper violates the rules, the Commission may in future impose fines of up to 10% of the total worldwide turnover in the previous financial year. For repeated violations, penalties can be up to 20% of sales.
Quotes
Andreas Schwab (EPP, Germany), rapporteur for the Digital Markets Act, said: “The Digital Markets Act (DMA) puts a stop to the business practices of large digital companies. The DMA enforces the principles of the social market economy online. In doing so, we ensure open markets and strengthen freedom of choice for consumers. With the DMA, the EU is ending the cat-and-mouse game in which the competition authorities have lagged behind the digital giants in lengthy proceedings. With the burden of proof reversing, companies will in future have to prove that they are adhering to the DMA rules and allowing fair competition on their platforms. With the legislative package, the European Parliament has ushered in a new era of tech regulation. The principle is: What is forbidden in the analogue world cannot be allowed in the digital world either.”
Christel Schaldemose (S&D, Denmark), rapporteur for the Digital Services Act, said: “For too long, the tech giants have benefited from a lack of regulation. In the digital world, Wild West methods have become widespread, with the biggest and strongest making the rules. But now the Digital Services Act is in place and the regulations and rights are being strengthened. We look behind the curtain of algorithms so that we can better examine the money machines behind social platforms.”
Next Steps
Once the Council formally adopts the two laws in July (DMA) and September (DSA), they will be published in the Official Journal of the EU and will come into force 20 days after publication.
The Digital Services Act is directly applicable in the EU and applies 15 months after its entry into force or from January 1, 2024 at the earliest. For very large online platforms and search engines, the Digital Services Act applies earlier - four months later they have been classified as gatekeepers by the Commission.
The Digital Markets Act applies six months after its entry into force. The gatekeepers have a maximum of six months after their classification to comply with the new obligations.
Source: European Parliament
Notes:
1) This content reflects the current state of affairs at the time of publication. The reproduction of individual images, screenshots, embeds or video sequences serves to discuss the topic. 2) Individual contributions were created through the use of machine assistance and were carefully checked by the Mimikama editorial team before publication. ( Reason )