Amended Digital Services Act adopted by European Parliament

How will the European Parliament’s proposed amendments to the Digital Services Act affect consumers?

The key takeaway

The European Parliament has agreed amendments to the proposal for a Digital Services Act (DSA). The DSA is a legislative proposal by the European Commission to modernise the e-Commerce Directive regarding illegal content, transparent advertising, and disinformation. The next stage is for the Parliament to enter informal trialogue negotiations with the Council now that it has agreed its negotiating position.

The background

As part of a package of measures to make Europe fit for the digital age, the European Commission proposed a new regulation on a Single Market for Digital Services in December 2020. The Commission’s legislative proposals aim to harmonise regulation of all digital services, including social media, online marketplaces and other online platforms across the EU. The proposals were two-fold:

• a Digital Services Regulation to implement a new framework of obligations applying to all digital services connecting consumers to goods, services or content and procedures for removal of illegal content, and
• a Digital Markets Regulation which intends to address negative consequences arising from certain behaviours by platforms acting as digital “gatekeepers” to the single market.

The development

The EU Parliament published its position report in January 2022 that generally outlined its support in general for the proposed DSA, but also added additional obligations designed to enhance consumer rights. There are five key changes that the EU Parliament has proposed for the DSA. These include:

• nudging and dark patterns – intermediary service providers are prohibited from using deceiving or nudging techniques to influence the behaviour of service users
• know your customer – online trading platforms must use best efforts to verify and check traceability information provided by traders selling to consumers. This is a change from the previous “reasonable efforts” standard
• transparency around targeted advertising – service users must be given more information about how their personal data will be used for advertising or will be monetised by online platforms and those users who refuse or withdraw consent must be given other reasonable options to access the platform
• targeting minors – there is a new prohibition on the use of targeting or amplification techniques that process, reveal or infer personal data of minors, and
• ranking parameters – users must be provided with the main parameters used by online platforms in their algorithm-based-decision-making-systems. Consumers will need to be made aware in both the platform’s terms and conditions and a dedicated online resource accessible from the interface wherever content is recommended to a consumer.

Why is this important?

There will be more obligations on online platforms to ensure content and data is managed appropriately and consumers are aware of what is happening with their data. The changes suggested by the Parliament show that the DSA will be a significant piece of legislation for digital services and will be far reaching for all online platforms operating in the EU.

Any practical tips?

Ahead of the DSA being finalised, businesses will need to consider the implications the DSA will have and in what ways current business practices would need to be adapted to comply with the suggested regulations.

Spring 2022