The regulatory landscape continues to evolve for marketplaces. To protect consumers and promote competition, new European directives, including the DSA, will soon come into force and have a major impact on platforms.
In a continuing effort to regulate digital services that act as intermediaries by connecting consumers with goods and services, the European Parliament and Council have agreed on a new set of rules that will impact European platforms and marketplaces.
The Digital Services Act and the Digital Market Act aim to:
The Digital Services Act (DSA) will apply to all online intermediaries providing services in the EU, imposing new obligations and restrictions based on the nature of the services and products concerned and the number of users of the online platforms. As a consequence of this proportionate approach, very large online platforms (VLOPs) and very large online search engines (VLOSEs) will be subject to more requirements, after analysis of their activities, than smaller platforms.
Current rules are over 20 years old : the digital transformation has completely transformed and reshaped human activity and European citizens are exposed to increasing harm online. Due to the large volumes of information and commercial offers, platforms in particular carry immense weight and responsibility in the online ecosystem. Antiquated regulations need to be modernized and clarified to meet the current challenges related to user safety, public opinion and discourse, and of course online trade.
Furthermore, national responses to the spread of illegal content have not necessarily been successful thus far: a coordinated European action and harmonized rules are expected to better protect and empower European individuals and businesses.
Finally, implementing a single set of rules is expected to be a more cost-effective solution compared with complying with 27 different regulatory regimes in the single market.
Marketplaces will be under close surveillance. The European Council has nevertheless provided exemptions for micro and small enterprises with under 45 million monthly active users in the EU (i.e. 10% of the 450 million consumers in the EU) with the aim of safeguarding the development of start-ups and smaller enterprises in the internal market.
Here are the key actions that will impact marketplaces:
Trusted flaggers, i.e. entities with expertise, will be able to report illegal content. National laws will also give local authorities the mandate to order platforms operating within the EU, irrespective of where they are established, to remove illegal content. This means that even if a platform is based outside of the EU, if it does business within the single market, it will have to appoint a legal representative to apply or deal with the consequences of DSA.
When the final text is officially adopted by the Council in September, it will be published in the Official Journal of the EU and will enter into force 20 days after its publication.
The DSA shall then apply across the EU, fifteen months after entry into force or from 1 January 2024 (whichever comes later). With regards to the obligations for very large online platforms and very large online search engines, the DSA will apply earlier - four months after they have been designated as such by the Commission.
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