The UK news is currently focussed on the opening of the economy after the easing of Covid-19 restrictions and the potential ramifications of recession on UK businesses. Amidst this, you may want to spare a thought for the Digital Services Act. You may think that the EU Digital Services Act (DSA) won’t affect you, but this article highlights how the DSA could affect your business and why it is important to engage in the EU consultation process.
We would ask that you visit this page regularly for updates on the EU Digital Services Act. It appears that the Interactive Advertising Bureau (IAB) Europe have sent an open letter opposing the EU’s Digital Services Act. The IAB are not prepared to ‘…endorse constrain online business models through bans and prohibitions of practices that are already comprehensively regulated by existing privacy and data protection laws… and perpetuate legal uncertainty, including by creating unprecedented complexity in compliance and enforcement.’ Read the full open letter here.
Why is the Digital Services Act relevant to my business?
If you don’t know about the proposed EU Digital Services Act then you’re not alone in your lack of knowledge about the planned EU legislation and how it could affect your business. Fortunately, you have the time to get up to speed on the planned Digital Services Act (DSA) and have your say on the proposed legislation as part of the consultation process to help shape policy and statute.
The EU plans to bring in the Digital Services Act to address:
- Digital safety
- Digital regulation
- Digital freedom of expression
- Digital liability
You don’t need to be a tech expert to realise that the Digital Services Act legislation is being brought in to regulate the likes of Facebook, Google, and Twitter because of the adverse publicity they’ve received. However, attempts to cure digital online platform issues could have wide sweeping consequences for entrepreneurs and start-up businesses because of potential additional digital bureaucracy and regulation involved.
What will the Digital Services Act cover?
The proposed EU legislation, The Digital Services Act, is intended to create an online digital regulatory framework, modernised for use across the EU. The intention is to ensure that there is not only online protection for both end line consumers and business users, but that all businesses operating online work on a level playing field and can compete for business, whatever the size and digital expertise of their rivals.
The Digital Services Act proposals include:
- Increased regulation of online platforms and information service providers.
- Additional regulations on the oversight of online platform content policies to help keep users safe online, and to manage responsibilities and liabilities for online platforms and other digital services (including online advertising and smart contracts).
- Rules to ensure that where there are large online platforms who are gatekeepers to entrepreneurs, innovators and start-ups, there is an ability for new business entrants to not be excluded from market.
Accordingly, the DSA is intended to help both personal and business digital consumers across the EU to bring the current old framework of rules and regulations into a modern legislation that is fit for purpose. At present, we are working with twenty-year-old rules that didn’t contemplate the size and power of the current online platforms or the extent of the digital protection required by both individual and business users.
What is the Digital Services Act consultation process?
The European Commission (EC) published the proposed DSA in December 2020. Those interested were able to provide feedback as users of online digital platforms as well as any concerns about how the proposed legislation could affect their business. The consultation period has now closed and it’s now for the European Parliament and European Council to amend and approve the EC’s proposal. Once this has been adopted, it will be applicable to all member states in the EU.
How will this affect my business?
It is understandable to assume that anything that involves the likes of the EU and Facebook won’t really affect your business either because of Brexit or the small scale of your operation. However, EU legislation will affect you if you are trading or plan to trade in the EU, and if you have a start-up business or you are an entrepreneur and you use the internet to trade from. Put into context, if you are a start-up and you host any user-generated content in say:
- Social media platforms
- Media sharing apps
- Search tools
This is why the consultation process was so important as many small businesses could end up with as much legal responsibility for online content as the massive online platform providers. Whilst it may be economic for the likes of Facebook to police their content twenty four hours a day it is unlikely to be an affordable option for you, thus, exposing you to liability under the DSA regulations for hosting third-party content in Europe. It is important that start-ups are protected by options such as:
- Compliance in the country where they are founded or based.
- Blanket-filtering of content that users upload is linked to the size of the company, so start-ups aren’t liable upfront for their third-party user content until they have received a content warning.
- The DSA legislation should also consider the size of the platforms that a business is regulating so that the imposition of sanctions is proportionate to the size and available resources of a start-up.
- Response times to digital content that is inappropriate or illegal in nature takes into account that start-ups can’t afford to monitor traffic to their websites and user content twenty-four hours a day.
Digital law needs
If talk of the proposed new EU online and digital regulation has made you realise that you are not up to speed on the current law and need guidance from our expert IT and commercial technology solicitors on the setting up or operation of your tech sector based business then our team of solicitors can help.