Introduction
DSA
DMA
Sanctions in case of non-compliance
On 5 July 2022, the European Parliament adopted the European Union's new digital rulebook, the new Digital Services Act (DSA) and the Digital Markets Act (DMA). The two bills aim to address the social and economic impact of the tech industry by setting clear standards for how they operate and provide services in the European Union, in line with the European Union's fundamental rights and values.
Previously, negotiators from the European Parliament and the EU member states agreed on the DMA on 24 March 2022 and on the DSA on 23 April 2022, respectively, and now Parliament has formally endorsed them. The permanent representatives of the EU countries in Brussels have also given their blessing to the laws, and now they are to be approved at ministerial level. This is considered a formality.
The DSA sets obligations for providers of digital services, such as social media or marketplaces, to combat the spread of illegal content, online disinformation and other social risks. Very large online platforms and search engines with 45 million or more monthly users, which pose the greatest risk, will have to comply with stricter requirements. These will be enforced by the European Commission.
The DMA sets obligations for large online platforms that act as gatekeepers in the digital marketplace to ensure a fairer business environment and more services for consumers. Gatekeepers are platforms that are difficult for consumers to bypass due to their dominant online position.
To prevent unfair business practices, platforms known as gatekeepers must:
- allow third parties to interoperate with their own services. This means that smaller platforms can require dominant messaging platforms to allow their users to exchange messages, voice messages or files via messaging apps. This will give users more choice and avoid the so-called "lock-in" effect where they are restricted to a particular app or platform; and
- allow business users to access the data they generate on the gatekeeper's platform to promote their own offers and contract with their customers outside the gatekeeper's platforms.
To the extent that a company is a gatekeeper within the meaning of the DMA, it may no longer:
- rate its own services or products on the platforms better (self-referencing) than other third parties;
- prevent users from easily uninstalling pre-installed software or apps or from using third party applications and app stores; or
- process users' personal data for targeted advertising, unless explicit consent has been given.
Sanctions in case of non-compliance
In the event of non-compliance with the new commandments and prohibitions of the DMA, the European Commission may conduct market investigations. If a gatekeeper fails to comply, the Commission can impose fines of up to 10% of its total worldwide turnover in the previous financial year, and up to 20% for repeated non-compliance.
For further information on this topic please contact Sebastian Jungermann at Arnecke Sibeth Dabelstein by telephone (+49 69 979885 465) or email ([email protected]). The Arnecke Sibeth Dabelstein website can be accessed at www.asd-law.com.