DMA & DSA: European Union passes landmark laws to rein in big tech

After months of negotiations and procedural hurdles, on 5 July 2022 the European Parliament held the final vote on the new Digital Services Act (DSA) and Digital Markets Act (DMA), following a deal reached between the European Parliament and the Council on 23 April and 24 March 2022 respectively. The two bills aim to address the societal and economic effects of the tech industry by setting clear standards for how they operate and provide services in the EU, in line with the EU’s fundamental rights and values.

The Digital Services Act (DSA) will set new obligations for digital service providers, such as social media or marketplaces, to tackle the spread of illegal content, online disinformation, and other societal risks. According to the lawmakers, these requirements would be proportionate to the size and risks platforms pose to society. Very large online platforms and search engines (with 45 million or more monthly users), which would present the highest risk, will in future have to comply with stricter obligations, enforced by the EU Commission. These include preventing systemic risks (such as the dissemination of illegal content, adverse effects on fundamental rights, on electoral processes and on gender-based violence or mental health) and being subject to independent audits. Such platforms will also have to provide users with the choice to not receive recommendations based on profiling. They will also have to facilitate access to their data and algorithms to authorities and vetted researchers.

The Digital Markets Act (DMA) sets obligations for large online platforms acting as “gatekeepers” (platforms whose dominant online position make them hard for consumers to avoid) on the digital market to ensure a fairer business environment and more services for consumers. To ensure that the new rules on the DMA are properly implemented and in line with the dynamic digital sector, the EU Commission will have the power to carry out market investigations. If a gatekeeper does not comply with the rules, the EU Commission can impose fines of up to 10% of its total worldwide turnover in the preceding financial year, or up to 20% in case of repeated non-compliance.

Once formally adopted by the Council in July 2022 (DMA) and September 2022 (DSA), both acts will be published in the EU Official Journal and enter into force twenty days after publication. The DSA will be directly applicable across the EU and will apply fifteen months or from 1 January 2024 (whichever comes later) after the entry into force. As regards the obligations for very large online platforms and very large online search engines, the DSA will apply earlier – four months after they have been designated as such by the Commission. The DMA will start to apply six months following its entry into force. The gatekeepers will have a maximum of six months after they have been designated to comply with the new obligations.

These are the upcoming dates for our Annual General Meetings:

Thursday, 21 March 2024
Thursday, 20 March 2025