Purpose of the legislation
- The Digital Services Act is designed to create stronger oversight of content moderation on user-to-user and search services, protect EU citizen’s rights online and to improve the mechanisms for removing illegal goods, services and content from the internet.
Duties on companies
- Tech companies, depending on size and the services they offer, will need to adhere to several obligations relating to:
- Transparency reporting for complaints, content moderation and how algorithms and other recommender systems that are used by the company.
- Greater cooperation with national and EU authorities regarding investigations of illegal content and compliance with regulation.
- Creating points of contact in Europe and where necessary, legal representation.
- Providing clear information to the users of a company’s services and any restrictions the company may impose.
- The creation of mechanisms for reporting criminal offences.
- Complaint and redress mechanisms and out of court dispute settlement.
- Special obligations for marketplaces and “very large online platforms”.
- Adherence to stricter rules on targeted advertising, banning the use of protected characteristics and making the parameters on how advertisements are chosen for specific users freely available.
- “Very large online platforms” must provide key data to researchers and authorities.
Who’s in scope?
The effect of the legislation will vary depending on the size of the company and the services they offer these companies are split into four categories:
- Intermediary services:
- Network Infrastructure providers
- Domain name registrars
- Hosting services
- Cloud and other webhosting services
- Online platforms
- Online marketplaces
- App stores
- Collaborative economy platforms
- Social media platforms
- Very large platforms
- Companies with at least 45 million users in the EU
- Described as posing particular risks in the dissemination of illegal content and societal harms.
- Micro and small companies will have obligations proportionate to their ability and size while ensuring they remain accountable.
- This legislation will only provide protections for EU citizens but companies that have a significant number of customers located in the EU will be obliged to follow this legislation.
What’s the risk?
- Noncompliant companies face fines of up to 6 percent of their annual turnover.
- Possible legal action from other violations discovered through investigations.
- This proposed legislation is designed to improve the enforcement of EU and national laws to very large online companies that are used by a significant amount of a member state’s population.
- If this legislation is passed, online companies, even those not based in the EU that have customers in its member states will have to follow this regulation.
- This legislation will apply to companies 15 months after the act is voted into law or from the 1st January 2024, whichever date is later.
Digital Services Act compliance with HolisticAI
- The DSA recognizes third-party audits of AI systems as a valid mitigation strategy for the prevention of online harms. Third-party audits will simplify the process of disclosing recommender systems to the EU.
- HolisticAI has developed various mitigation strategies for business using algorithms in this sector, having published widely on online safety.