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The Digital Services Act (EU): What is it and how to comply with it?

August 3, 2022

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In July 2022, the European Parliament passed the Digital Services Act (DSA) requiring digital platforms to meet comprehensive benchmarks for online safety.

The DSA sets continent-wide safety standards for online businesses and services to ensure a safe user experience and provide effective ways to report illegal activity. The law goes into effect on January 1, 2024.  Any organization with an online presence in the European Union (EU) must be compliant by that point.

 


Who is affected by the DSA?

The Digital Services Act applies to all organizations who do business or provide services via the Internet in EU member states. The law refers to them with the catch-all term “digital services.”

  1. Intermediary services: These include internet service providers, DNS providers, VoIP apps, messaging apps, and email service providers.

  2. Hosting services: Examples of these include web hosting and cloud storage services.

  3. Online platforms: This refers to social networks, online marketplaces, app stores, booking sites for travel accommodations, and websites where people can share user-generated content.
     
  4. Very large online platforms (VLOPs): Any online platform with 45 million monthly users falls into the VLOPs category, which face additional requirements from the DSA. (More on that below!)

Simply put: If you want your website or app to load for users in Europe, you must comply with the DSA or face fines up to 6% of your annual company revenue.

 


What does the DSA require?

In a nutshell, the DSA mandates the following from online platforms:

  • Countermeasures against illegal activity: The DSA requires online platforms to implement new features for users to flag illegal content, and also mandates that communities work with prioritized “trusted flaggers” to identify and remove illegal content.
  • Increased scrutiny for very large online platforms (VLOPs): Online platforms with 45 million users or more are required to set up systems to combat disinformation, election interference, online harassment, and targeting of minors. Independent audits will regularly check these systems for effectiveness.

  • Methods to trace sellers: Online marketplaces will need to build solutions to trace sellers on their platform in order to combat scammers and those who traffick counterfeit items.

  • Limits on targeted advertising: Digital advertisers will no longer be able to target users based on protected categories of personal data like ethnicity, political views, or sexual orientation.  The DSA also sets uniform restrictions against advertising to children, and requires more transparency in all advertisers’ or influencers’ commercial communications.

  • New rights for users: The DSA establishes new rights for users, including the right to challenge online platforms when a user’s content is removed, seek out-of-court settlements for rule breaches, and file complaints in their own language to their respective national authorities.

  • More algorithm transparency: Along with clearer explanations about their terms and conditions, online platforms will need to provide more information about the algorithms they use for displaying and recommending content to users.

  • Data access to researchers: Academic researchers will be able to request data from the largest online platforms to study their communities and associated risks.  Companies will have to comply with data requests once they are approved by the EU country that hosts them.




What are the penalties for not complying with the DSA?

The Digital Services Act will become law on January 1, 2024.  Companies that haven’t complied by that time will be fined up to 6% of their annual global revenue.



How can organizations become DSA-compliant?

There is no “one size fits all” solution for Trust & Safety since online platforms vary widely in their intended purpose and target audience.

Fortunately, Spectrum Labs offers fully customizable options for tailoring content moderation to different behavioral thresholds and establishing an efficient workflow to comply with DSA requirements.

  • Make it easy to report illegal content: Spectrum Labs gives online platforms the infrastructure to create user-friendly ways for reporting illegal content, as well as systems to inform infringing users about their violations and the reason(s) for their content’s disabling or removal.

  • Prioritize trusted flaggers: Online platforms will need to create a system for appointing trusted flaggers and processing their notices immediately.  Spectrum Labs enables Trust & Safety teams to act quickly on illegal content that’s submitted by trusted flaggers, including the ability to set up configurable automation for more speed and efficiency.

  • Keep T&S systems auditable: Large platforms will be subject to audits of their Trust & Safety systems to ensure that they’re effective without overstepping basic freedoms of expression.  Spectrum Labs provides the ability to create comprehensive analytics and transparency reports to comply with independent auditors and facilitate clearer public-facing communications.

  • Keep scammers away: Spectrum Labs equips online marketplaces to design data collection systems to verify sellers’ identity, establish a means of “traceability,” and inform buyers when they’re found to have received counterfeit or illegal products and services.

  • The right to appeal: Online platforms must provide a way to challenge content moderation decisions. Spectrum Labs allows them to grant users access to a complaint management system for at least 6 months following any decision to remove a user’s content or suspend their account.

  • Localize T&S systems: The DSA requires online platforms to implement content moderation that accommodates the laws and languages of all 27 EU countries.  Spectrum Labs’ patented multilingual A.I. enables communities to immediately comply with localization requirements.


All in all, Spectrum Labs combines the most advanced Contextual A.I. detection with enterprise-scale solutions, all powered by the speed of an EU-based data center and backed by a performance guarantee from Munich Re.

Our team’s hands-on expertise in deploying Trust & Safety technology will ensure that your platform fulfills DSA requirements.

Download our Spectrum Labs solution guide: European Union DSA Compliance 



Related regulations to consider:

The DSA is intertwined with local laws and other regional laws across the EU.  It’s vital to check and make sure your organization complies with any other relevant regulations.

A few key examples include:

  • Digital Markets Act (DMA): The DMA is an anti-monopoly law governing the business practices of large online platforms with a market cap of €75 billion.  It’s often lumped together with the DSA, but has its own criteria for “gatekeepers” to follow in order to allow new competitors to enter the space.  Failure to comply will result in fines up to 10% of annual global revenue.
  • TCO or TERREG: The EU officially calls it Regulation 2021/784, but it’s easier known as “TERREG” or “TCO” since this law sets regulations for terrorist content online.  Platforms who fail to comply with its measures to detect and quickly remove terrorist content (Within 1 hour of receiving notice!) will face fines of up to 4% of their annual global revenue.
  • Hate Speech Laws: The EU defines illegal hate speech as “public incitement to violence or hatred on the basis of certain characteristics including race, religion, nationality, or ethnic origin.”  Since the DSA requires online platforms to comply with local laws, it’s crucial to stay up to date on any additional anti-hate laws enacted by individual countries.



Final thoughts (And a disclaimer!)

Legal regulations are a constantly changing landscape.  The Spectrum Labs team will periodically update this post with any new information about how Europe’s DSA may affect your business.

While we intend to be helpful, we do not intend to be the final word on legal matters – so please don’t take this post as definitive legal advice!  Be sure to review all relevant laws with your own legal counsel to determine how these regulations pertain to your company’s specific needs.