Context: 

The Digital Services Act (DSA), the EU’s landmark rulebook that aims to make the online environment safer, has come into effect for all online intermediaries in the European Union. 

EU’s Digital Services Act

• Digital Services Act officially came into effect on August 25 2023 but was applied to very large platforms (having more than 45 million active monthly users in the European Union) at that time.
• The European Commission has since engaged itself in investigating and probing the compliance of these digital giants.
• Small companies  defined as having less than 50 staff and a turnover of less than 10 million euros are relatively spared broader scrutiny by the law.

What Is the Digital Services Act?

• Digital Services Act is a comprehensive set of rules designed to enhance online safety and transparency for European Union (EU) users passed by the European Parliament in 2022.
• Its provision applies to Online platforms that offer goods, services, or content to EU citizens, such as social media, e-commerce, or cloud services.
• Aim: To regulate the online activities of tech players with a special focus on tech giants like Google, Facebook, Amazon, etc. and to create a safer and more transparent internet for everyone.

Rules of the Digital Services Act

• Compliance Requirements:

  • All platforms need to remove illegal content or make it inaccessible as soon as the issue is raised.
  • Inform authorities of suspected criminal behavior or offense posing a  threat to life and safety.
  • Accountability: Companies must publish an Action Taken report every year with details about the response time and actions taken on content moderation.

• Content Regulation: 

  • Content scrutiny: Online  platforms needs to actively prevent and remove illegal or harmful content, including hate speech, terrorism, and child abuse. 
  • Non compliant users: Platforms to suspend users who frequently share illegal content such as hate speech or fake ads.
  • User Verification: Online shopping sites must verify the identities of users and block repeat fraudsters.

• Targeted Advertising Restrictions:

  • Sensitive Information: Online platforms are prohibited from using a person’s characteristics like sexual orientation, religion, ethnicity, or political beliefs for targeted advertising. 
  • Children aged 17 and under cannot be targeted with advertisements.

• Algorithm Transparency: 

  • Platforms must disclose how their algorithms function and impact the content they display.

• Stricter Rules for Large Platforms: 

  • Large online platforms are defined as reaching over 10% of the EU population about (45 million users) per month.
  • The EU has named 22 “very large” platforms including Apple, Amazon, Facebook, Google, Instagram, Microsoft, Snapchat, TikTok and clothing retailer Zalando as well as three major adult websites.
  • Internal Risk Assessment: The platforms have to have an internal structure to assess the risks such as spread of illegal content and privacy infringements and to  mitigate them such as improved content moderation.
    • Establish  an independent internal supervisor to keep an eye on whether they are in line with the rules.
  • Data Accessibility: Periodic and regular access to data is required to be provided to the authorities, to see the rules compliance.
  • Third party Audit: The company Data  will also be shared with approved researchers and the firms will be audited once a year at their own expense.

• Grievance Redressal: 

  • Users can lodge a complaint claiming a platform is in violation of the DSA with their competent national authority.
  • Fixing Responsibilities: Online shopping sites may be held responsible for any damage from products bought by users that are non-compliant or dangerous.
  • Penalties: The company can be charged upto six percent of their global turnover, and in case of repeated non-compliance, they can also be banned.

• Authority: 

• • Smaller companies: The EU  member states have to assign a competent authority with the powers to investigate and sanction any violation. 
  • Coordination: These national authorities should collaborate with one another and the EU commission to enforce the regulation.
  • Very  large platforms: They will come under direct supervision of the European Union Commission with sanction powers

News Source: The Economic Times