What is it about?

More safety and accountability online – this is what the Digital Services Act (DSA)/Law on Digital Services aims to achieve. The DSA establishes harmonised rules for providing online intermediary services within the internal market. The aim is to take more effective action against illegal content such as hate speech, trademark and product piracy, or unsafe products. It aims to enforce rights on online platforms more consistently. Furthermore, it ensures greater transparency about content moderation and presentation. The DSA came into effect on 16 November 2022 in the form of a regulation. As of 17 February 2024, the rules must be mandatorily implemented across all member states.

Who is affected?

The DSA affects all online intermediary services offering their services within the internal market, regardless of whether they are established within the European Union or outside. These include online marketplaces, social networks, internet service providers, or operators of cloud and messaging services.

What does the law stipulate?

Intermediary services are being held more accountable to efficiently combat illegal goods, services, or content. Liability rules for online intermediary services are more clearly defined. Various due diligence obligations are being introduced, scaled according to company size.

Reporting and remedy procedures are harmonised, allowing platforms to respond more swiftly and consistently to reports of illegal content. By establishing the KYBC principle ("Know Your Business Customer"), business data such as name, address, banking details, and commercial register entries must be obtained before platform services can be used. Additionally, new transparency and reporting obligations will be introduced.

Example: Distribution of unsafe or counterfeit products

With the growing importance of online trade, dealers, manufacturers, or brand owners are increasingly affected by unfair practices in the digital economy – such as the steep rise in trademark and product piracy or the distribution of unsafe products. For instance, large online retailers may sell mini-lathes from foreign suppliers that do not meet European standards.

Moreover, counterfeit products are easily found on major online retailer platforms, particularly consumer electronics such as televisions and audio systems, which are poorly manufactured and sold at high prices. Such illegal offerings are harmful to German manufacturers and other rights holders as they go beyond safety risks to also constitute unfair competition.

What is important for businesses now?

An efficient fight against illegal online content should be ensured. At the same time, overregulation, especially of SMEs, must be avoided to prevent hindering the growth and innovation of digital services within Europe.