Digital Services Act (DSA)

The Digital Services Act Package is a new regulation for all EU member states. This legal act was created to prevent illegal and harmful activities on the Internet and the spread of misinformation. It ensures user safety, protects fundamental rights and creates a fair and open online platform environment.
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Overview of the DSA

The Digital Services Act (DSA), an EU statute, attempts to increase internet safety. It lays down standards for online platforms, such as moderation of material, transparency, and user rights. The DSA regulates online intermediaries and platforms such as marketplaces, social networks, content-sharing platforms, app stores, and online travel and accommodation platforms. Platforms must make their policies more clear, remove illegal content quickly, and disclose their algorithmic and data-driven practices.

Purpose and Scope of the DSA

In order to ensure a safer and more transparent digital environment, the Digital Services Act aims to regulate online platforms. By setting clear guidelines on user rights, platform transparency and content moderation, it intends to improve the accountability of digital services. The DSA service covers all online platforms operating within the EU. It requires the fast removal of illegal content, enhanced user rights, including the ability to appeal content decisions, and openness in algorithmic processes. In addition, the DSA strengthens regulatory control to ensure compliance and effective management of systemic risks.

Key Provisions of the DSA

The Digital Services Act contains a number of important provisions aimed at regulating online platforms:
  • Content moderation – it is essential that platforms take down illegal content quickly and prevent it from reappearing. They must also put in place easy-to-understand content moderation guidelines.
  • Transparency – platforms must be open about how their algorithms target advertising and suggest content. They must also be open and honest about their data practices.
  • User rights – by ensuring that users are aware of platform policies and procedures, and by providing channels for appealing content removal decisions, The DSA online business service enhances user rights.
  • Large platforms – additional needs for very large platforms include risk assessment and systemic risk mitigation for public safety and discourse.
  • Regulatory control – the Act creates strong regulatory control, empowering national authorities and ensuring that the requirements of the DSA are uniformly enforced across EU Member States.
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Impact on Digital Platforms

Under the DSA service, online providers must comply with additional general requirements. Importantly, regulators may impose specific individual requirements on particular entities. These requirements relate to both the business conduct and the regulatory framework of the relevant providers.

Rights for Users

The DSA protects consumers and their fundamental rights online by setting out clear and proportionate rules. The DSA user safety was introduced by a set of rules to protect fundamental user rights online. These rights include freedom of expression, freedom of opinion, freedom of information and freedom from manipulation.

Requirements for Specific Services

The DSA online business service involves specific requirements for VLOPs and VLOSEs services. They are also required to share data with researchers to address systemic risks and to disclose how their algorithms affect the visibility of content. Advertising standards require clear labeling and user consent for targeted advertising. Platforms must also cooperate with national authorities on requests for content and data, while ensuring that users’ rights are protected through clear contractual terms.

Requirements for Social Media Platforms

Media platforms are part of the online platforms category. These are social networks such as Facebook and Twitter, messaging applications such as WhatsApp and Signal, and other platforms that allow users to share content and interact with others online. The DSA online business service requires platforms to have easy-to-use mechanisms for flagging illegal content. Platforms must act on reports of illegal content on time and inform both the user who reported the illegal content and the user who posted the content of their decision and any follow-up action.

Obligations for Online Marketplaces

Online marketplaces also are part of the online platforms category. The DSA online business service requires them to have a point of contact for users, such as email addresses, instant messaging or chatbots. Online platforms should also ensure that the contact is quick and direct and cannot rely solely on automated tools, so that users have easier access to the platforms when they want to make a complaint. Second, online platforms should ensure that complaints are handled by qualified staff and that the matter is dealt with in a timely and non-discriminatory manner. Online platforms should also provide clear and specific reasons for their moderation decisions. Third, if a user decides to review a decision, this should be done free of charge through the platform’s internal complaints system.

Special Regulations for Very Large Online Platforms

VLOPs/VLOSEs should carry out (systematic) risk assessments, including an assessment of wider societal risks. Based on such assessments, VLOPs/VLOSEs should put in place mechanisms to mitigate the identified risks. In the event of a crisis (e.g. natural disaster/terrorism), the Commission may also require VLOPs/VLOSEs to take certain actions, such as adapting algorithms and promoting reliable information. In addition, VLOPs/VLOSEs will be subject to additional rules on advertising, may be required to provide access to certain data to public authorities and trusted researchers, and will have to carry out an independent audit at least once a year.

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DSA Compliance Strategies

The DSA compliance requirements were introduced to protect consumers and their fundamental rights online by setting clear and proportionate rules. It promotes innovation, growth and competitiveness and facilitates the expansion of small platforms, SMEs and start-ups. It rebalances the roles of users, platforms and public authorities in line with European values, putting citizens at the centre.

Fintech Harbor Consulting | Digital Services Act (DSA)
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