Fresh from the oven! : The Digital Service Act

On 15 December 2020, the European Commission announced two new laws as part of the European Digital Strategy: the Digital Service Act and the Digital Market Act.

These acts have two main goals: to protect citizens fundamental rights by creating a safer digital space, and to encourage a competitive digital market by establishing a level playing field to foster innovation, growth and competitiveness.

The European digital regulation hasn’t been updated for 20 years, the e-Commerce Directive was created in 2000. In the last two decades, advances in the tech industry have dramatically changed the panorama.  Many of the Big Tech companies didn’t exist by then or were just developing. Facebook, Amazon or Google have become too big to care.

  • The Digital Service Act:  a safer and more accountable environment

One of the main novelties is the platform’s obligation to tell users in plain language how the parameters used in algorithms that rank content work. Algorithms serve up content based on user’s past activities, these platforms must offer alternative options not based on profiling.

The act also significantly improves the mechanisms on the processes for controlling online content. A new legal framework is set for the rules of handling illegal or potentially harmful content online as hate speech, the liability of online providers for third party content, vetting obligations of third party suppliers and the protection of users’ fundamental rights online.

The Digital Services Act advocates for creating a more transparent digital environment. A better knowledge of how platforms work will establish a most trustful European digital market.

  • Tougher restrictions to Silicon Valley

The Digital Services Act includes rules for the different online players.  However, the companies will have obligations proportionate to their ability and size.

Online platforms with more than 45 millions users will be fined if they failed to comply with the rules. The Digital Service Act set fines that reach 6% of the company’s annual revenue, for example Facebook’s fine would amount to 4.2 billon dollars. “With size comes responsibility,” said Margrethe Vestager, the European Commissioner for competition last Tuesday.

Big Techs in Silicon Valley are one the most affected by this new regulation. They had a path free of legal restrictions to build empires for 20 years. Now, the European Union reminds them of their duty of care, a fair behavior with users and consumers is necessary.

Official responses of these enormous platforms are expected in the next few days. However, both the Digital Service Act and the Digital Market Act need to be submitted to consultation and then be approved by European lawmakers, a process which could take several years.

A propos de Clara ARINO GARCIA

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