2023 – digitisation, evolution, innovation.

These are just some of the labels that mark the start of a new age in the EU digital regulatory framework. Everything we do nowadays is centred around those three terms and we are all part of making these concepts tangible in the actual world, without actually realising it (pun intended). But how close are we to properly regulating that digital, yet increasingly real world?

This is the third and last part of our take on the DSA, where we cover an unusual, yet interesting addition brought by the DSA: the so-called “Good Samaritan” provision. We are also talking about the relationship of the DSA with other EU laws, as well as its enforcement and entry into force, before wrapping up and laying down our conclusions.

Don’t forget to check out the first part of this article, too, where we explained the purpose and impact of the DSA, broke down the entities who fall within the scope of the Regulation and outlined the rules on intermediary liability, as well as the second part, in which we delved deep into the bread and butter of the Regulation, namely the new and refined obligations, applicable to various types of online intermediary service providers.

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Rewarding Proactivity: the “Good Samaritan” Provision

Another novelty brought by the DSA is the so-called “Good Samaritan” clause. This idea, stemming from the US legal framework, has been previously contemplated by the Commission in its 2017 Communication on Tackling Illegal Content Online Towards an enhanced responsibility of online platforms[1], where it stated that: “This Communication (…) also aims to provide clarifications to platforms on their liability when they take proactive steps to detect, remove or disable access to illegal content (the so-called «Good Samaritan» actions)”.

Previously, under the E-Commerce Directive, intermediaries were not explicitly protected if they undertook good faith measures against illegal content. Instead, the Directive rather focused on knowledge of the illegal content.

With that being said, under the DSA, Article 7 goes a step further and now basically states that voluntary own-initiative measures, taken in good faith and in a diligent manner by intermediaries, should no longer automatically remove their immunity under the safe harbour principle. What’s more, Recital 26, when referring to measures taken to comply with the requirements of EU law, also points to those regarding “the implementation of their terms and conditions”. This might just alleviate things for intermediaries, since removing content based on their own terms and conditions is not only simpler, but also quicker (especially for providers of hosting services or online platforms), given that they can remove content that is not necessarily illegal per se, but also rather questionable.

Relationship with Other EU Laws

The DSA does not repeal the E-Commerce Directive. Instead, the DSA merely replaces the provisions regarding liability from the E-Commerce Directive, whilst the latter also remains in force. Thus, the country-of-origin principle, set by Article 3 of the E-Commerce Directive, shall continue to apply to online service providers, i.e., they are required to comply with the laws of the Members State they are legally established in when operating across the EU. Additionally, the imprint requirements, set by Article 5 of the Directive, which oblige online service providers to provide sufficient information about the company providing the respective services, also remain effective, as are the requirements concerning unsolicited commercial communications, provided by Article 7 of the Directive.

Whilst the DSA, alongside the E-Commerce Directive, will represent the main legal framework for providing digital services, other sectorial EU pieces of legislation shall often come into play, depending on the intricacies of each case. For example, the Audiovisual Media Services Directive[2], which has also been modified in recent times (see our take on it here), shall apply in the online environment, too, e.g., in case of providers of video-sharing platform services (such as YouTube or Daily Motion). Another example would be the Regulation on Addressing the Dissemination of Terrorist Content Online[3], whereby hosting service providers are required to remove terrorist content upon receiving a removal order from Member States’ authorities within one hour, as well as take measures when their platforms are exposed to terrorist content.

Enforcement

The DSA requires that each Member State designate one or more competent authorities, acting as Digital Services Coordinators (“DSCs”), to be responsible for the supervision of providers of intermediary services established in their territory and for the enforcement of the DSA obligations. For VLOPs and VLOSEs, the Commission shall be the sole competent authority to supervise and enforce the DSA’s rules.

The DSCs will cooperate with each other, as well as with the Commission and the European Board for Digital Services (the “Board”), which is an independent advisory group. The Board supports the Commission and helps coordinate the actions of DSCs, in order to achieve a consistent application of the DSA.

Each Member State shall law down its own rules on penalties for infringements of the DSA applicable to providers that fall under their jurisdiction. The sanctions may include hefty fines that refer to the annual global turnover or income in the previous financial year, similar to other sectors (e.g., competition, data protection and more recently, consumer protection). Nevertheless, the DSA provides for certain thresholds that need to be observed when applying fines:

▸ for a failure to observe an obligation under the DSA, the maximum amount of fines that may be imposed shall be 6% of the annual worldwide turnover of the offender in the preceding financial year;

▸ for supplying incorrect, incomplete or misleading information, as well as for failing to reply or to rectify such information, and for the failure to submit to an inspection, providers may be sanctioned with a fine up to 1% of the offender’s annual income or worldwide turnover in the preceding financial year;

▸ lastly, the maximum amount of a periodic penalty payment shall be 5% of the average daily worldwide turnover or income of the offender in the preceding financial year, calculated from the date specified in the decision concerned.

The Commission can impose similar fines only against VLOPs and VLOSEs.

Furthermore, the recipients of the service shall also have the right to seek compensation from providers of online intermediary services, for any damage or loss suffered due to an infringement.

Entry into force

The Digital Services Act was published on 27 October 2022 in the Official Journal of the European Union. The DSA will generally become applicable starting from 17 February 2024. Nonetheless, there are certain factors that may come into play much sooner.

For example, online platforms, regardless of size, need to report the number of active end users on their websites by 17 February 2023, and henceforward, at least once every six months. However, the precise methodology for performing such calculations is still unclear. The DSA specifies that all users who access the service are to be taken into account, not just registered users, therefore, online platforms may face some challenges in fully observing this particular requirement. It is expected that the Commission will publish more concrete guidelines in the near future.

Based on the numbers provided by the online platforms, the Commission will then assess whether a platform should be designated as a VLOP or VLOSE. After that, the respective entity shall have four months to comply with the requirements under the DSA, including, inter alia, carrying out and providing the first annual risk assessment.

Conclusions

By creating a safer digital world and fostering a more transparent online environment, the DSA seeks to protect digital consumers and their fundamental rights. At the same time, the DSA is also aiming to level the playing field and encourage growth and innovation not just in the EU, but also worldwide, given its far-flung effects span across online service providers globally, as long as they engage EU consumers.

Henceforth, it is paramount that European legislation harmoniously evolves alongside the frantic digital expansion and strives to not lag too much behind market realities.

Full article >> https://www.bpv-grigorescu.com/news/surfing-the-digital-sigle-market-part-3/