What is it called?

The proposed Digital Services Act (DSA) is a package of EU legislation aimed at modernising the EU’s framework for digital services, including the e-Commerce Directive. The DSA will cover rules for online products and services, and competition law issues in respect of the existing market for online platforms.

The Commission plans to adopt a legislative proposal for these measures in early December 2020.

What is being proposed?

The DSA is a response to the rise of online platforms, which have significantly changed the EU market for online products and services. The European Commission acknowledges the benefits of this development for consumers and the internal market, but also identifies that it has brought new risks. In particular, the Commission is concerned that online platforms facilitate the sale of illegal goods and content online. It plans to modernise the current framework by addressing two main areas:

  1. Establishing a common set of regulatory responsibilities for online platforms like social networks or marketplaces, who provide services in the EU from anywhere in the world, to:
    • keep users safe from illegal goods, content or services;
    • protect consumers’ fundamental rights online; and
    • ensure transparency and greater regulatory oversight over online platforms.
  2. Proposing rules for large online platforms which act as “gatekeepers”, to ensure that markets impacted by them remain fair and competitive and to promote innovation, growth and competitiveness, particularly of European digital innovators, scale-ups, SMEs and new entrants to the market.

Who and what will it apply to?

The draft text of the proposal has not been published yet, but it’s anticipated that the DSA will focus on online platforms and be relevant to a broad range of businesses who provide products and services online.

For example, the Commission has suggested that the DSA could enhance online platforms’ obligations to take action in respect of illegal content or goods and introduce a requirement to maintain a ‘notice-and-action’ system covering all types of illegal goods, content and services. Such changes would affect stakeholders across the whole supply chain. 

Why does it matter?

If adopted, the DSA will represent an important modernisation of the European rules relating to digital services. These changes are likely to be felt widely, with the European Parliament calling for the EU to set the standards for regulating platforms, and ensure foreign service providers adhere to the rules.

Europe’s e-Commerce Directive dates from 2000, and over the past 20 years there have been significant advances in the way in which products are sold online. Innovative technology and business models have pushed the existing legal framework, and the Commission no longer feels it is fit to address the challenges posed by these operators.

The proposal will be designed to regulate the sale of products and services online for the next two decades. So, this represents an important turning point.

Where can I find it?

Further information on the initiative can be found here. We will update you as soon as a legislative proposal is published – which we expect to be in the next two weeks.

Posted by Edward Turtle