Internal Market Committee endorses agreement on Digital Services Act

On Thursday, Parliament’s Internal Market Committee endorsed the provisionally reached agreement with EU governments on the Digital Services Act (DSA) with 36 votes in favour, 5 against and one abstention. The DSA, together with its sister proposal on Digital Markets Act (DMA), sets landmark standards for a safer and more open digital space for users and a level playing field for companies for years to come.

The new rules introduce new obligations for online platforms, proportionate to their size and to the societal risks they pose. Micro and small companies will have additional time to conform to the rules and will be subject to certain exemptions.

Penalties for non-compliance can reach up to 6% of platforms’ worldwide turnover.

Safer online marketplaces and transparent platforms

Under the new rules, online platforms – such as social media and marketplaces – will have to take measures to protect their users from illegal content, goods and services. Users will be empowered to report illegal content online and platforms will have to act quickly, while respecting fundamental rights, including the freedom of expression and data protection.

Online market places will have to strengthen checks on traders to ensure products and services are safe and make efforts to prevent the surfacing of illegal content, including through random checks.

Online platforms will be obliged to be more transparent and more accountable, for example by allowing users to be informed of how content is recommended to them. Very large online platforms will have to provide users with at least one option not based on profiling. Additional rules on online advertising are also introduced, including a ban on the use of sensitive data or targeting of minors. The so-called “dark patterns” and misleading practices aimed at manipulating users’ choices will also be prohibited.

Obligations for very large platforms and search engines

Very large online platforms and search engines (with 45 million users or more) will have to comply with stricter obligations to protect users from illegal content and goods. Every year, they will be subject to independent audits and will have to carry out risk assessments of their services including the dissemination of illegal content, the spreading of disinformation, adverse effects on fundamental rights, on electoral processes and on gender-based violence or mental health. They will have to address these risks, for example by adapting their design or algorithms.

The European Commission will have exclusive power to supervise and demand that very large online platforms comply. It can inspect a platform’s premises and get access to its databases and algorithms.

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The rapporteur Christel Schaldemose (DK, S&D) said: “We are now one step closer to making the internet safer, fairer and more transparent to the benefit of the citizens and businesses. This legislation will put an end to the digital Wild West. We will enhance consumer protection, give users better rights and regulate the core of the platforms’ business model. All in all, what is illegal offline will also be illegal online.”

Next steps

Both the Digital Services Act and Digital Markets Act are expected to be put for a final vote in Parliament in July before they are formally adopted by Council and published in the EU Official Journal. The DSA Regulation will enter into force 20 days after the publication and the provisions will start to apply fifteen months thereafter.