DSA comes into force to change the rules of how digital markets and platforms are regulated
In light of the entry into force of the Digital Services Act (DSA), I joined a group of experts at the European Parliament in Brussels on Monday, October 24th, 2022, to discuss the details of the now approved legislative package and talk about regulatory responses to disinformation.
The DSA, along with the Digital Markets Act (DMA), will drastically change the rules of how digital markets and digital platforms as well as other services are regulated in the European Union by ensuring fair competition in the EU and increasing choice for European users.
The DSA will drastically change the rules of how digital markets and digital platforms are regulated in the European Union by ensuring fair competition
On the one hand, there is a paradigm shift. The legislation package, taken together, aims to generate the framework that will allow European tech companies to flourish and become more competitive in the worldwide digital arena. It seeks to break the dominance of American and Chinese big players by imposing more stringent rules to limit what they can do inside the EU single market and creating the conditions to give EU companies the competitive edge they need to grow.
On the other hand, the new regulations also represent a paradigm shift as it moves away from a mostly self-governance model to a model where EU national governments and the European Commission will play a central role as enforcers of stricter rules. At the same time, it still leaves space for public-private cooperation as platforms' internal governance will remain key even if now governmental oversight will be greater, particularly when it comes to the protection of fundamental rights online, transparency and accountability mechanisms, and ensuring that tech companies identify, anticipate, and minimize the harms they may cause.
The legislation package will allow European tech companies to flourish and become more competitive in the worldwide digital arena as it seeks to break the dominance of American and Chinese big players
The DSA also makes sure that the very large online platforms (or VLOPs) have a separate set of rules as they both have more resources to combat harms and a greater share of the responsibility in generating them. Having separate sets of rules for different company sizes is also there to ensure that smaller European digital services can remain competitive in the market and grow.
A "digital constitution for Europe"
During our sessions, the DSA was described by Parliament and European Council officials as a "digital constitution for Europe". Naturally, the protection of fundamental rights recognized in the acquis communautaire is a goal of the DSA, but in this case, "digital constitution" also refers to ordering how power is distributed online, providing for checks and balances, and generating structures of vigilance and accountability. It also refers to the fact that the Act serves as the foundation for horizontal legislation to impact all areas of digital services inside the EU. That means that the DSA is the basis for sectorial legislation in the digital space and that its impacts will be felt progressively for years to come, which certifies that this is perhaps the most ambitious effort to regulate online services that we have seen to date.
Concretely, the DSA focuses on four main areas:
- Content moderation rules that include mechanisms of redress
- Transparency obligations including algorithmic transparency
- Risk assessment obligations to ensure platforms protect fundamental rights such as freedom of expression
- Platform internal governance rules subject to governmental oversight either by national authorities, or in the case of VLOPs, the European Commission
I believe that the DSA can dramatically alter the digital regulatory landscape in the EU and that it also comes with a specific set of opportunities and challenges for EU tech companies. There is also a opportunity for growth and consolidation of small and middle-sized European tech companies and that only thoughtful leaders with the right leadership skills and technical knowledge, like the ones we educate at the UPF Barcelona School of Management, will be able to take advantage of.
A chance for European tech SMEs
To give these leaders what they need, scholars are the forefront of research and committed to the training of the next generation of business leaders is key, and that is just what we have at our School. Of course, lawyers, judges, auditors, and other legal experts with the required specialized knowledge in this new digital regulation will have a central role, and luckily, programs like our Master in Professional Legal Practice has an innovative curriculum that puts the UPF-BSM in a unique position to train these experts.
The DSA is perhaps the most ambitious effort to regulate online services that we have seen to date
During the sessions, we also had discussions about rules related to content moderation and platform accountability, and compared them to what is being done elsewhere. We also addressed the need of auditing and judicial experts which will play a key role in the implementation of the DSA. I think that it will be particularly interesting to see who individual countries choose in terms of the national authority that will oversee monitoring compliance with the DSA as they will also need different levels of expertise in the many aspects of digital platforms and digital markets that the legislation covers.
The meeting, where colleagues from the School of Communication and the School of Law at Complutense University of Madrid joined me as well, was organized by MEP Isabel Benjumea and the support of the European Popular Party (EPP) group at the European Parliament.