The EU Digital Service Act and Digital Market Act
By Lisa Zadrozny Stausholm
This Saturday February 17th 2024, the Digital Services Act (DSA) package will become fully applicable to all digital services entities spanning from basic websites to internet infrastructure and online platforms. Although the DSA and the Digital Market Act (DMA) were both adopted by the European Parliament in July 2022 and the package became effective on August 25, 2023, it applied solely to large platforms and search engines. One key aspect of the DSA is its differentiation between very large platforms and smaller intermediaries. This innovative legal framework marks a significant milestone in the regulation of online platforms, more so now that digital services have a massive economical, social and ideological societal impact and that a minimal digital presence is a necessity in order to navigate our society. Therefore, this regulation is essential to provide all European citizens with a harmonised and sustainable regulation that values a transparent and safe digital market and society that protects democratic values and their right to confidentiality all across Europes
Why should we regulate digital services ?
Digital services are at the center of day-to-day activities. To expose the risks and consequences of these services, let’s imagine a practical situation where you want to buy an item on Facebook Marketplace. To do so, you have to be a user of the platform and thus store your personal data and comply with Facebook’s terms and conditions, notably regarding privacy and confidentiality. These terms set by a private and for-profit corporation, aim to maintain a viable platform through targeted advertising and by showing you content that your specific profile is more likely to interact with. This is attained by the use of algorithms and artificial intelligence that are set to meet these criteria’s, forging a new’s feed and advertising made for you to interact with and as a result, determining the information visible to you. These technologies lead to unintentional biases, such as creating algorithmically generated echo-chamber where users find themselves, whether consciously or not, grouped together and consuming the same content without being offered an alternative or opposing opinion. In this way, consumers' knowledge becomes, often in spite of themselves, partial, which also reinforces the phenomenon of confirmation bias. This can lead to disastrous effects on society as a whole by polarising public opinion and even jeopardising public security, e.g. the shooting caused by the ''Pizza gate'' conspiracy theory spread online by the alt right in the US. As digital services are the main source of information for many people, it is vital to combat this phenomenon as well as misinformation, especially knowing a large amount of fake news are mass spread by bots, capable among other things to create a profile that appears to be popular, as highlighted by Niklewicz (2017) and Crosset (2021).
But the outcomes of storing your data aren’t the only risks you incur as a user. Let’s say you want to purchase an interesting item on Facebook Marketplace and you contact the seller. Up until now, it was your sole responsibility as a user to have the digital literacy to spot scammers, and your own responsibility to not purchase illegal goods that hadn’t been detected yet by the platform. But even being cautious, and especially as new scamming techniques appear everyday, you can get scammed. In that occurrence, it is very difficult to get justice by going to the police as they do not have all the tools necessary to track the scammer. So this situation already highlights different issues and risks users are exposed to and do not have a say in. Moreover, users are limited in their choices on how to navigate online as gatekeepers are dominating the market. As they are not keen on competition, buy growing startups presenting a threat, so it is very hard for new companies not only to enter but especially stay on the market. For example, if you want to get a product delivered at your home, you are more likely to turn to a specific corporation to do so. Another interesting point is also noted by Balkin (2019), who underlines that digital services have become a digital public sphere and, the public sphere in general being crucial to democracy, it needs to be functional through rules set by institutions. He highlights different public functions exercised by digital services, such as enabling and organising participation in public discourse while shaping public opinion through individualised news feeds, community standards and the reach and visibility given to information. He states healthy and functional digital public spheres should promote democratic culture and politics through these functions.
To sum up, digital services have various economical and social consequences as they play a major role in how information gets to the public by determine it’s visibility through search engines and platforms. They are owned by a small number of large, unelected corporations driven by a profit motive, who prevent and actively block innovation and operate with the help of biased algorithms that are also designed with profit in mind. As digital services have evolved over time, they have no become a new form of public sphere that needs to be regulated to protect and value democracy.
What is the Digital Services Act package ?
As digital services are cross-border by nature, the challenges faced by our society and digital market should be addressed on a pan-European level. This legal framework works toward a safer and more transparent digital environment by focusing on two goals. First, the DSA aims to create a secure digital environment safeguarding the fundamental rights of all users of digital services. Among others, this is attained by a focus on more transparency regarding the algorithms used by digital services for content, products and services recommendation to users. For example, by restricting specific data allowed to be used by algorithms for targeted advertising, users will no longer be advertised following their sexual orientation, ideology or ethnicity - with a specific ban to profile children. Moreover, the DSA implements a groundbreaking measure by requiring online platforms (social, commercial or intermediaries) to take accountability for the content and services they host and, as such, make it their responsibility to address disinformation, illegal and harmful content and activity. It will also makes it easier to trace online sellers to be able to track scammers. collaboration with relevant authorities. The legislation encourages a cooperative approach between platforms, users, regulators, and EU member states through content moderation mechanisms, transparency measures, and collaboration with relevant authorities. Moreover, to keep the pace with the ever-evolving risks these fast-paced technologies and digital environment face, this package allows researchers to have access to data. This is a focal point as it was a massive issue up until now, not permitting comprehensive studies and thus, incomplete conclusions. It also adds another actor - researchers thus, society - to the process of digital services staying compliant with these EU regulations, assuring a democratic process.
The second main goal is, by identifying and regulating six gatekeepers (dominant online platforms that act as gateways between businesses and consumers), the DMA establishes a fair digital market that promotes innovation, growth and competitiveness, both within the European Single Market and on a global scale. The introduction of a European Digital Services Coordinator by the DSA sets to improve market oversight by implementing additional supervision measures for VLOPs holding substantial market influence. For example, regulating the gatekeeper Google Play will no longer allow it to be a private rule-maker for the apps it allows on its platform to be downloaded by users.
All in all, this framework seeks to strike a balance between fostering innovation and protecting users' rights by regulating digital service providers and enforcing them to be proactive in addressing illegal content and activities as well as misinformation on their platforms. It seeks for users to regain control over their online experience to be able to make informed decisions and reinforce their privacy rights. We place good faith that this regulation grows as the digital landscape continues to evolve and we strive towards a more transparent, democratic and safe digital society.
Sources :
https://www.eu-digital-services-act.com/Digital_Services_Act_Preamble_1_to_10.html
https://ec.europa.eu/commission/presscorner/detail/en/ip_23_4328
https://sumsub.com/blog/the-eu-digital-services-act-and-digital-markets-act/#
Balkin, J. M. (2019). How to Regulate (and Not Regulate) Social Media. SSRN Electronic Journal. Published. https://doi.org/10.2139/ssrn.3484114
Crosset, Valentine, 9 novembre 2021. « Stratégies de visibilité du discours de l'Etat Islamique ». Conférence Zoom à l’Université de Montréal, Canada.
Niklewicz, K. (2017). Weeding Out Fake News: An Approach to Social Media Regulation. European View, 16(2), 335–335. https://doi.org/10.1007/s12290-017-0468-0
https://www.eu-digital-services-act.com/#:~:text=On 25 August 2023, the,entities on 17 February 2024