The Digital Services Act (DSA) modernizes the legal framework for digital services in the EU, focusing on content moderation, transparency, and consumer protection. It replaces the e-Commerce Directive's approach to intermediary liability while establishing stringent new obligations.

Tiered Obligations

The DSA applies a cumulative, tiered approach where obligations increase based on the service's size and role:

1. All Intermediary Services (e.g., ISPs, Domain Registrars)

  • Publish annual transparency reports.
  • Establish clear Terms & Conditions outlining content restrictions.
  • Cooperate with national authorities to act against illegal content.

2. Hosting Services (e.g., Cloud providers, Web hosts)

In addition to Tier 1:

  • Implement notice-and-action mechanisms allowing users to flag illegal content.
  • Provide statements of reasons to users when their content is removed or restricted.

3. Online Platforms (e.g., Social media, Marketplaces)

In addition to Tiers 1 & 2:

  • Establish internal complaint-handling systems and engage with out-of-court dispute settlement.
  • Suspend users who frequently provide illegal content.
  • Ban targeted advertising based on profiling using sensitive personal data (e.g., sexual orientation, religion) or directed at minors.
  • Ensure traceability of traders on marketplaces (KYBC - Know Your Business Customer).
  • Avoid "Dark Patterns" that manipulate user choices in interfaces.

4. Very Large Online Platforms (VLOPs) and Search Engines (VLOSEs)

Platforms reaching more than 45 million active users in the EU (10% of the population) face the strictest obligations:

  • Risk Assessments: Conduct annual systemic risk assessments regarding illegal content, fundamental rights, electoral processes, and public health.
  • Risk Mitigation: Implement measures to mitigate identified risks, such as altering recommender systems.
  • Algorithmic Transparency: Provide users with options to modify recommender systems that are not based on profiling.
  • Data Access: Grant access to platform data for vetted researchers.
  • Crisis Response: Comply with crisis response mechanisms during emergencies.

The End of the Liability Shield?

The DSA maintains the conditional immunity (safe harbor) for intermediaries who merely transmit or host data without knowledge of its illegality. However, platforms lose this immunity if they become aware of illegal content (e.g., via a notice) and fail to act expeditiously to remove it.

Enforcement and Fines

While national Digital Services Coordinators (DSCs) oversee smaller platforms, the European Commission directly supervises VLOPs and VLOSEs. Non-compliance can result in fines of up to 6% of the global annual turnover. Providing incorrect or misleading information carries fines of up to 1% of annual income.