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The Digital Services Act: Who Will Supervise the Very Large Platforms?

· November 24, 2021

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Tomorrow, EU Ministers look set to adopt the Council of the EU’s position on the Digital Services Act (DSA). The DSA will define and attempt to rebalance how digital services operate in Europe, developing a single framework to hold digital service providers accountable for any contribution to or sharing of illicit content, product or activities. The debate inevitably centres around getting the law right; but while having strong and clear rules is crucial, without effective enforcement, the law only pays lip service to citizens and political concerns about illegal content online.

The Council of the EU (i.e. the 27 EU Member States) wants the European Commission to be the primary regulator for very large online platforms (VLOPs), with reinforced coordination and cooperation among member states; It’s an approach worth discussing. Pending some clarifications, keeping the “country of origin” principle and guaranteeing the primacy of the DSA over national rules, could make for a positive step forward. The DSA could provide clarity and a user-friendly regulatory framework for global businesses operating digital services throughout the EU.  

The Council’s approach commands attention for moving further towards centralised enforcement than the European Commission originally proposed. Though the Commission also aimed to set a clearer framework for enforcement by maintaining the “country of origin” principle, it recommended complementing the role of competent national authorities with layers of EU coordination whenever the issues presented are demonstrably cross-border (i.e. issues involving at least three Member States).

The Council might have been expected to push for national authorities to keep as leading a role as possible. However, the prevailing approach likely to be endorsed tomorrow evolved in response to some Member States’ concerns about the capacity of certain countries to act. It’s fair to say that the competent authorities in some national jurisdictions – Ireland, Luxembourg – might have particularly prominent roles within Europe, as they are host countries to a few very large online platforms. This makes the burden of enforcement on their national authorities particularly high, as they verify the digital services’ respect of the rules when it comes to all their operations across Europe and decide on penalties in the event of non-compliance. 

So centralised enforcement appeals for its simplicity and strength – but there are key ingredients to keep in the regulatory recipe and traps to avoid. Effective implementation and enforcement comes from clarity, which is also why the DSA would need to remain the only regulation of its kind to apply in the EU. The versions of the text we understand Ministers look set to endorse include recital language giving Member States the right to superimpose their own rules atop of the DSA. That could lead to an unnecessary compliance nightmare for companies.

Three clarifications are needed to ensure that the Council’s DSA enforcement approach has teeth. 

First, EU means EU. The DSA must have legal primacy over any national rules. Member States should support such full harmonization. It is essential to ensure legal clarity for businesses and citizens, as well as to avoid administrative complexity and overlapping rules. EU policymakers should clarify the DSA’s lex-primaris role and ensure strong and effective enforcement mechanisms. 

Second, the DSA must provide a clear delineation of powers for national authorities (digital services coordinators – DSCs) and the European Commission. This would ensure that competent authorities have a clear understanding of their role and responsibilities. EU policymakers should clarify which institution is in charge of what and create clear coordination schemes when needed. 

Third, the role of the EU Court of Justice in reviewing decisions should be clarified to ensure that the full spectrum of measures from the DSA is understood by all the players in the ecosystem. The DSA should introduce safeguards and transparency on how decisions from the Commission would be scrutinized

It will be necessary to clarify the DSA’s lex-primaris status with a clear enforcement mechanism setting comprehensive roles and responsibilities for EU and national authorities. Empowering the European Commission to be the primary regulator for very large online platforms (VLOPs), can be the way forward, but clarifications are still needed.

European Union

DisCo is dedicated to examining technology and policy at a global scale.  Developments in the European Union play a considerable role in shaping both European and global technology markets.  EU regulations related to copyright, competition, privacy, innovation, and trade all affect the international development of technology and tech markets.