An Overview of the Digital Market Act and Digital Services Act

The digital landscape has changed drastically over the past decade, with the emergence of new technologies and the rise of online platforms. The Digital Market Act and Digital Services Act are two pieces of legislation that have been introduced by the European Union to regulate the digital economy and ensure a level playing field for all market participants. These acts are designed to address the challenges posed by the digital market and promote fair competition, consumer protection, and data privacy.

What is the Digital Market Act?

The Digital Market Act is a proposed EU legislation that aims to regulate the behavior of large digital platforms, such as Google, Amazon, and Facebook, to ensure fair competition and protect consumers. The main objective of this act is to prevent the abuse of dominant positions by large platforms and promote innovation, choice, and quality for consumers. Some of the key provisions of the Digital Market Act include:

• The creation of a list of "gatekeeper" platforms, which are subject to specific obligations and restrictions to prevent abuse of dominance
• The prohibition of unfair practices, such as self-preferencing and restricting access to data.
• The requirement for large platforms to provide more transparency in their operations and algorithms.
• The establishment of a new regulatory body, the Digital Markets Authority, to monitor and enforce the provisions of the act.

What is the Digital Services Act?

The Digital Services Act is another proposed EU legislation that aims to modernize the legal framework for digital services and promote online safety, consumer protection, and freedom of expression. This act applies to a wider range of digital services, including online marketplaces, social media, and search engines. Some of the key provisions of the Digital Services Act include:

• The obligation for digital services to take proactive measures to prevent illegal content, such as hate speech and terrorism-related content, from being disseminated on their platforms.
• The requirement for digital services to provide more transparency in their content moderation practices and algorithms.
• The establishment of a new regulatory body, the Digital Services Coordinator, to oversee the implementation of the act.
• The extension of consumer protection rules to online marketplaces, such as product safety and liability.

What are the next steps with respect to the Digital Services Act?

As of 16th November 2022, the Digital Services Act will come into effect and all online platforms will have a grace period of three months to submit their active end-user numbers to the Commission, by 17th February 2023. The Commission has also requested that online platforms proactively report these figures. The Commission will evaluate the user data and determine if a platform or search engine is a very large online platform. Once the Commission makes this designation decision, the entity will have four months to comply with DSA obligations, including conducting the first annual risk assessment exercise and submitting it to the Commission. By the general DSA application date of 17th February 2024, EU Member States must authorize their Digital Services Coordinators, which is the date when the DSA will be applicable to all entities within its scope.

How do the Digital Market Act and Digital Services Act impact businesses and consumers?

The Digital Market Act and Digital Services Act have far-reaching implications for businesses and consumers in the digital world. For businesses, the acts will introduce new obligations and restrictions, especially for large platforms that are deemed as "gatekeepers". These platforms will be required to provide more transparency in their operations, algorithms, and data sharing practices. They will also be subject to additional scrutiny and enforcement measures to prevent abuse of dominance.

For consumers, the acts will introduce new rights and protections, such as the right to access and port their data, the right to receive transparent and non-discriminatory treatment from online platforms, and the right to receive redress for harm caused by illegal content. The acts will also promote online safety and protect vulnerable groups, such as children and victims of hate speech.

FAQs

Q: How will the Digital Market Act and Digital Services Act be enforced?

A: The acts will be enforced by two new regulatory bodies, the Digital Markets Authority and the Digital Services Coordinator. These bodies will have the power to investigate and sanction companies that violate the provisions of the acts.

Q: Will the Digital Market Act and Digital Services Act stifle innovation and entrepreneurship?

A: No, the acts are designed to promote innovation and competition in the digital market. By preventing abuse of dominance and promoting fair competition, the acts will create a level playing field for all market participants, including small and medium-sized businesses.

Q: Will the Digital Market Act and Digital Services Act apply to all digital services?

A: The Digital Market Act applies to large platforms that are deemed as "gatekeepers", while the Digital Services Act applies to a wider range of digital services, including online marketplaces, social media, and search engines.

Q: Will the Digital Market Act and Digital Services Act apply to non-EU companies?

A: Yes, the acts will apply to all companies that provide digital services to EU customers, regardless of their location.

Q: How will the Digital Market Act and Digital Services Act impact data privacy?

A: The acts include provisions that aim to protect data privacy and ensure that consumers have more control over their data. For example, the Digital Services Act requires digital services to provide clear information about their data processing practices and obtain explicit consent from users.

Conclusion:

The Digital Market Act and Digital Services Act are two important pieces of legislation that seek to regulate the digital economy and ensure fair competition, consumer protection, and data privacy. These acts will have far-reaching implications for businesses and consumers in the digital world and are expected to shape the future of the digital market. By introducing new rights and protections for consumers and promoting innovation and competition, the acts will create a more transparent, safe, and fair digital environment for everyone.