On November 25, 2021, the Council of the European Union reached an agreement on the draft Digital Services Act (“DSA”) (see here and here) and the Digital Markets Act (“DMA”) (see here) bringing them one step closer to adoption. The European Parliament will discuss the drafts on December 9 and plans to announce its first reading position in early 2022, after which the Council and the Parliament will enter into negotiations with the goal of reaching an agreement on a final text for both acts.

The acts lay down rules for intermediary service providers (e.g., Internet access providers, cloud providers, search engines, social networks, and online marketplaces) covering areas such as:

  • liability of mere conduit, caching and hosting services;
  • content moderation;
  • transparency of services and electronic communications;
  • transparency of online advertising;
  • openness and interoperability of the services to businesses and consumers; and
  • fair competition between service providers.

If you like to receive an overview of the draft DSA and DMA, as well as a short explanation of the sanctions regime in the event of a breach, please let us know.

Significantly, on November 18, the European Data Protection Board issued a related statement (see here). In that statement, the Board identified three main lingering concerns with respect to the DSA: (1) lack of protection of individuals’ fundamental rights and freedoms; (2) fragmented supervision by competent regulatory authorities; and (3) the risk of inconsistencies between the DSA and EU data protection law. The Council’s reactions to these recommendations have yet to be published.

We will continue to monitor and report on the legislative process of the DSA and DMA.