The Digital Markets Act and the Digital Services Act: The coming digital world

The Digital Markets Act and the Digital Services Act: The coming digital world

The digital world has been changing for a long time, and at an increasingly rapid pace. We saw it at the beginning of the century with the implementation of the internet and we are seeing it now with the huge technological developments that countries and companies are undertaking, from Artificial Intelligence (AI) to the metaverse, including 5G and augmented reality.

In this context, the European Union has not wanted to lag behind when it comes to regulating new (and not so new) actors and their fields of action. Starting with the entry into force in 2018 of the General Data Protection Regulation (GDPR), the EU’s regulatory development has not stopped, developing complementary regulations such as the ePrivacy Regulation, the Digital Markets Act (DMA) and the Digital Services Act (DSA).

What is the Digital Services Act?

The DSA is the set of rules on intermediaries’ obligations and accountability across the single market, so that the provision of digital services has new cross-border opportunities and offers users a high level of protection. The DSA is expected to apply to intermediary services, data hosting services, online platforms and very large online platforms (those reaching 10% of the 450 million Europeans).

What is the Digital Markets Act?

While the DSA mainly affects intermediaries, the DMA will mainly apply to so-called “gatekeepers” (companies that, because of their size and importance, enjoy a long-established and durable position – which have a significant impact on the internal market and serve as an important gateway for professional users to access their end-users. These “gatekeepers” are those offering, inter alia, online search engines, social networking services, application shops, certain messaging services and virtual assistants). To be part of this category, they must have:

1. a size that has an impact on the internal market;
2. control of a significant gateway between professional users and end-consumers; and
3. a long-established and durable position.

Main changes brought about by this type of regulation 

The main purpose of the DSA is to effectively protect the fundamental rights of consumers and users and, as mentioned above, it includes greater control and supervision of the different platforms operating in the market, especially those that reach more than 10% of the population of the European Union.

Specifically, with the enactment of the DSA, the main objectives to be pursued are the following:

• to fight against illicit goods, services or content online, so that reporting channels for users are facilitated and platforms cooperate with “reliable alerters”.
• improving the traceability of user companies in online marketplaces.
• more effective safeguards for users.
• banning certain types of targeted advertisements on online platforms, especially when they are aimed at minors or when they use specially protected categories of personal data.
• more transparency measures for online platforms.
• an obligation for very large online platforms and very large search engines to prevent abuse of their systems.
• access for investigators to key data from the largest platforms and search engines in order to understand how online risks evolve.
• a supervisory structure appropriate to the complexity of cyberspace.

On the other hand, the DMA will oblige “gatekeepers” to, among other things:

• allow end-users to easily uninstall pre-installed applications or change the default settings of operating systems, virtual assistants or web browsers.
• allow end-users to install third-party applications or app shops that use or interoperate with the gatekeeper’s operating system.
• unsubscribe from the gatekeeper’s core platform services as easily as they subscribe to them.
• allow third parties to interoperate with their own services.

Next steps

Of course, beyond the existing provisional texts, the next step must be to reach an agreement for its definitive approval and implementation.

The main difficulty encountered by the DSA has been, precisely, the rejection of its approval by the European Parliament when everything seemed to indicate that an agreement would be reached with the European Commission regarding the final text of the new regulation.

For their part, once both are approved, it will be necessary to take into account, firstly, the strength of their application and the scope of compliance by the obligated parties.

On the other hand, as is usually the case when there is a huge amount of regulatory development, albeit necessary, we will have to be attentive to the combination with other regulations that regulate the digital world and how they complement each other.

These two regulations, together with the General Data Protection Regulation and the ePrivacy Regulation, are destined to be the shapers of the digital world to come.