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Will the Digital Services Act impact you?

Once adopted, the Digital Services Act (or DSA) will re-define the rules for offering content, services and products online in the EU. Find out which companies and other stakeholders are in scope of the DSA and will be affected by the new requirements.

On 15 December 2020, the European Commission published two pieces of legislation: the Digital Services Act (DSA) and the Digital Markets Act (DMA) that will profoundly change the way companies offer and use digital services in the EU. Both proposed acts are regulations, which means that they will be directly applicable in all EU member states. The new rules will regulate the responsibilities of digital service providers when acting as intermediaries in providing goods, services and content to consumers online.

The DSA intends to cover a very broad scope of service providers, both in the EU and beyond, and will indirectly affect an even larger group of entities, such as traders on platforms. Although the actual provisions of the DSA are likely to undergo many changes during the legislative process in the EU, we expect obligations proposed to regulate online platforms to stay in one form or another.

Geographical scope

The DSA will apply to providers of intermediary services regardless of their place of establishment or residence if they offer goods/services in the EU or their services have a “substantial connection” to the European Union.

When does such a substantial connection exist?

It is deemed to exist when the provider:

  • has an establishment in the EU; or
  • has a significant number of users in the EU; or
  • targets its activities towards one or more EU member states.

The last category is very broad, and the proposal clarifies that whether the activities are targeted towards the EU will be determined by all relevant circumstances. For example, the availability of an application in a national app store, the provision of local advertising or advertisement in the language used in a member state or the use of a language or a currency of that member state. However, the mere technical accessibility of a website from the EU cannot be considered on its own as establishing a substantial connection.

A layered approach to imposing obligations

The DSA introduces new duties for providers of intermediary services and new rights that may be exercised by users. It consists of a set of new obligations applicable to all providers with an extra layer of additional obligations for hosting service providers. Extensive obligations are introduced for a new category of intermediary services, online platforms and very large online platforms

The obligations set out in the DSA are cumulative. This means online platforms are required to comply with the obligations specifically applicable to online platforms but will also have to comply with the obligations set out for both hosting service providers and intermediary service providers.

Find out more about the layered approach

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Layer one: Providers of intermediary services

This covers a broad range of digital service providers in the EU including internet service providers, content distribution networks, web-based messaging services and wireless local area networks.

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Layer two: Providers of hosting services

Services that consist of the storage of information provided by, and at the request of, a recipient of the service (such as webhosting or cloud services).

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Layer three: Online platforms

Providers of intermediary services that consist of the storage and public dissemination of users’ information.

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Layer four: Very large online platforms

Online platforms that have over 45 million active monthly users in the EU.

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Will the Digital Services Act impact you?

Download the report to determine if and how the DSA will affect your company.

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