EU states pass two important digital laws25. November 2021
EU states pass two important digital laws
Late but not too late, EU states today passed two important laws, adapting the e-comerce directive passed more than 20 years ago to the digital age. These are the Digital Markets Act (DMA) and the Digital Services Act (DSA). Unfortunately, some details still need to be worked out. Accordingly, they will probably not come into force until 2023.
The Digital Markets Act (DMA) aims at stricter rules for so-called “gatekeepers”, i.e. those companies that have a particularly strong market position. These include, for example, platforms such as search engines or social networks with at least 45 million active monthly users in the EU or 10,000 annual business customers. In terms of annual revenue, the threshold is 6.5 billion euros. In the future, they will have to follow certain rules. If they fail to do so, they face penalties in the billions.
According to industry association Bitkom, the “Digital Markets Act provides important new impetus for fair competition in the EU.” At the same time, however, Bitkom criticized the fact that the new regulations did not take sufficient account of the far-reaching effects on European platforms, startups and cybersecurity issues.
The Digital Services Act (DSA) is intended to ensure that online platforms have to do more to combat illegal content. This will improve consumer protection, Bitkom praised. Manipulative design practices intended to pressure consumers into making a purchase decision will also be banned in the future.
The EU states are demanding stricter rules for online marketplaces. A new article in the law is intended to prevent so-called “dark patterns” in the sale of goods and services online. These are design decisions that aim to mislead users and lead them to make a particular decision in favor of the service provider. This is to be explicitly prohibited by Article 24b. In addition, large platforms would have to give users more influence over what is displayed to them and provide more information about advertisements. Those who fail to comply can be fined up to six percent of their annual turnover.
Special requirements will apply to search engines. Text proposals will create separate rules for “operators of very large online search engines.” These must regularly subject their recommendation algorithms to independent inspections and – if these discriminate against “groups of people” – act in accordance with the requirements.
The Council does not envisage independent supervision in the form of an EU authority. Instead, the Commission’s powers are to be strengthened when it comes to very large online providers.