The Digital Services Act (DSA) came into force in late 2022. It categorises services as intermediary services, online platforms, search engines, very large online platforms and very large search engines, with cascading obligations focusing on content moderation, transparency and accountability – depending on the nature of the individual service. There are also new obligations for online marketplaces.

Categorisation of Platforms

As a first step, all online platforms will need to determine which obligations they are subject to. For example:

  • a retail platform which allows third parties to upload content and advertise items for sale is at least likely to fall into the category of being an online platform – with obligations applying whether users are B2B or B2C
  • further requirements are imposed on marketplaces (online platforms which allow consumers to conclude distance contracts with traders)
  • an assessment will also need to be made as to whether the online platform falls into the category of being a very large online platform (VLOP) – which triggers more substantial obligations.

Obligations for Online Market Places

Even where an online marketplace is not categorised as a VLOP, there are still significant new requirements, including new processes and a need for dedicated personnel and disclosures (both proactive and reactive). Online marketplaces are required to:

  • Update T&Cs. For example, to disclose parameters used in recommender systems and inform users about content moderation policies.
  • Publish annual reports on content moderation. To include, amongst other things, the number of orders/notices received and how they were actioned, and number of complaints received.
  • Develop complaint handling systems. Allowing users to appeal decisions on notice and takedown, account suspension or other restrictions.
  • Include prominent ad disclosures. Identifying the advertiser and main parameters of ad targeting.
  • Traceability requirements. To obtain, verify and publish information on all traders offering goods/services or promoting messages via the platform to EU consumers.
  • Design a compliant online interface. Allowing traders to provide all information required to comply with EU law
  • Carry out “random checks” to identify illegal products. Informing users where they have bought illegal products/services including trader identity and means of redress

Next steps

In terms of immediate steps, online marketplaces should:

  • by 17 February 2023 (and at least once every six months thereafter) publish EU user numbers i.e. the average monthly active recipients (MARS) of the service in the EU on the platform. This requirement applies to all online platforms. This is a challenging exercise made tricky by the broad definition of MARS, a lack of guidance regarding how to carry out the calculation and the technical feasibility in accurately counting MARS.
  • carry out a detailed analysis to:
    • determine how the platform is categorised and what obligations apply under the DSA; and
    • develop a strategy to ensure compliance.