Digital Services Regulations April 2024 | Legal Flash 104

The Digital Services legislative package is active starting mid April!
 

The DSA (Digital Service Act) came into force on November 16, 2022, and is directly applicable across the EU as of February 17, 2024, whilst the DMA (Digital Markets Act) came into force on November 1, 2022, and is directly applicable across the EU as of March 2024.

The Digital Services legislative package form a single set of rules that apply across the whole EU which purpose is to regulate digital intermediary services and providers of such services, is adopted by the Council and the European Parliament in October 2022 and includes:

(a) the Digital Services Act (i.e. Regulation (EU) 2022/2065 or DSA) and

(b) the Digital Markets Act (i.e. Regulation (EU) 2022/1925 or DMA).

The scope

While DSA’s provisions regulate all online intermediary service providers, regardless of their place of establishment or residence, if they provide the goods/services in the EU or their services have a "substantial connection" with EU, DMA governs primarily the large online platforms which function as gatekeepers (meaning information flow controllers) on the digital market such as Google, Amazon, Meta.

As per DSA, intermediary service providers include online marketplaces (i.e. eBay, Amazon), social networks (i.e. Facebook, Twitter), content-sharing platforms, app stores, online travel and accommodation platforms (i.e. Booking), search engines (i.e. Google, Bing) as well as other access, caching and hosting providers.

Thus, both large tech companies as well as small providers are covered by the DSA.

Main obligations of the entities

Both DSA and DMA set up a series of obligations that cover:

(i) the combat of the online sale of illegal products and services;

(ii) the countering of illegal online content;

(iii) online protection of minors;

(iv) limitations on the presentation of advertising and on the use of sensitive personal data for targeted advertising.

There are obligations established for each type of digital intermediary:

(i) very large platforms and search engines (shortly named VLOPs and VLOSEs); - Very Large Online Platform, respectively Very Large Online Search Engines;

(ii) online platforms (such as online markets, app stores, social platforms);

(iii) storage - hosting services (such as cloud and web hosting, including online platforms);

(iv) all intermediary services (Internet access providers and domain name registry operators (including hosting services)).

Micro and small businesses have obligations to commensurate with their capacity and size and are generally exempt from most obligations but must take responsibility for the actions they undertake.

Competent authorities

As per Law no. 50/2024, ANCOM was designated as the coordinator of digital services and will contribute to the supervision, enforcement and monitoring of the DSA and DMA together with the Commission. They

will have the power to request access to data, order inspections and impose fines on providers of intermediary services in the event of an infringement.

Also, other institutions and public authorities that have powers regarding the supervision of a certain sector or field of activity or the judicial authorities have the possibility to issue orders towards service providers – either by requesting to act against illegal content in the online environment or to provide certain information.

Sanctions

Non-compliance with the obligations arising from the DSA will lead to fines starting from 5000 LEI (approximately 1000 Euro) up to 6% of the worldwide turnover. Moreover, ANCOM can also order confiscation of the goods intended, resulting or used in committing the respective contravention.

At the earliest, the sanctions can be applied starting from mid-April.

Also, as a novelty, ANCOM minutes regarding law breaches and relevant sanctions can be concluded in electronic format and communicated to the entity concerned through MyAncom electronical platform. Sanctioning minutes can be contested before the competent courts within 15 days of communication.

How can we help be prepared?

Our team of experienced lawyers can provide detailed legal analysis, interpret the new regulations, and apply them effectively to the client’s digital operations.

In respect of the Regulation, we can:

(i) determine if the business falls in the scope of the DSA. Even if the client is located outside of the European Union (EU), the DSA will still apply if a substantial connection to the EU exists.

(ii) determine what type of intermediary the client is (e.g. access provider, caching provider, hosting provider, online platform provider, B2C online marketplace provider, online search engine).

(iii) provide comprehensive DSA Legal Support to determine the types of obligations applicable.

(iv) plan DSA implementation by conducting gap analysis, risk assessment to prioritize actions based on red flag reports, implement necessary amendments on audit findings by implementing required adjustments. Update terms and conditions, enhance content moderation procedures, and bolster user protection measures to meet DSA standards.

(v) regularly monitor for delegated acts of the European Commission.

(vi) regularly check and update the measures taken.