EU Stakeholders Agree On Digital Services Act

Late last week, the European Union’s (EU) government stakeholders agreed on a major part of the bloc’s push to remake how technology is regulated. This follows agreement on the other major section of the package late last month. There are still significant steps to be taken before either measure has legal force in the EU, but agreement between the Council of the EU and the EU Parliament is a major development. If passed as proposed, these laws would remake the digital world and place new responsibilities on “Big Tech” that advocates and critics have wanted for years. Given the ongoing political gridlock in the United States (U.S.), the EU’s legislation may set the global standard and act as a model for other nations in the same way the General Data Protection Regulation (GDPR) has with respect to data protection. Moreover, this may provide additional pressure in the U.S. Congress on those opposing legislation to change antitrust and competition law to address practices used by large technology companies many claim are abusive (see here and here for more detail and analysis.)

The Council of the EU and the European Parliament announced a “provisional political agreement reached on the Digital Services Act (DSA)” that “follows the principle that what is illegal offline must also be illegal online…[and] aims to protect the digital space against the spread of illegal content, and to ensure the protection of users’ fundamental rights” per the Council. However, the final text of the bill has not yet been released and likely will not be for a number of weeks if the DSA is on the same timeline as the other part of the larger package. The Parliament explained “[t]he text will need to be finalised at technical level and verified by lawyer-linguists, before both Parliament and Council give their formal approval.” The Council stated “[f]rom the Council’s side, the provisional political agreement is subject to approval by the Permanent Representatives Committee (Coreper), before going through the formal steps of the adoption procedure.” The Parliament added “[o]nce this process is completed, it will come into force 20 days after its publication in the EU Official Journal and the rules will start to apply 15 months later.” And so, given this timeline, it is possible, and perhaps even likely, the DSA would not take effect until into 2024.

In late March, the Council and the Parliament revealed they had “reached a provisional political agreement on the Digital Markets Act (DMA), which aims to make the digital sector fairer and more competitive.” They added that “[t]he DMA defines clear rules for large online platforms…[and] aims to ensure that no large online platform that acts as a ‘gatekeeper’ for a large number of users abuses its position to the detriment of companies wishing to access such users.” To date, despite numerous leaks and counter-leaks, the text of the DMA has not been issued. Consequently, it may well into May or even June before the text of the DSA is publicly available.

In December 2020, the European Commission (EC) proposed “an ambitious reform of the digital space, a comprehensive set of new rules for all digital services, including social media, online market places, and other online platforms that operate in the European Union: the Digital Services Act and the Digital Markets Act.” (see here for more detail and analysis.)