In recent months, both the Digital Services Act (DSA) and Digital Markets Act (DMA) have made a great deal of progress through the EU’s legislative procedure; with the expectation that final versions of each Regulation will now be adopted by the European Parliament and Council in the very near future.

The European Commission proposed significant reforms of the digital space, in the form of the DSA and DMA, back in December 2020 and the proposals have been working their way through the legislative procedure since that date. The adoption of those Regulations by the European Parliament and Council is therefore a significant milestone, as it will mark the final step in the legislative process, before the Regulations will come into force.

It is therefore worth quickly refreshing our memory as to what the two Regulations will seek to do. We do not yet have sight of the final text of the Regulations, but it is expected that they will introduce the following changes:

Digital Services Act

The DSA will regulate the obligations of digital services that act as intermediaries, connecting consumers with goods, services and content.

The DSA therefore has the potential to apply to a wide range of online intermediaries, including online travel and accommodation platforms.

The more notable obligations that the DSA will impose include:

  • Measures to counter illegal content (including goods and services) online.
  • Rules to ensure the traceability of sellers on online marketplaces.
  • Enhanced transparency for advertising online platforms, including where carried out by influencers.
  • Prohibitions on the use of misleading tricks on online platforms, that manipulate users into making choices they didn’t intend to make.

Digital Markets Act

On the other hand, the DMA focusses on so called “gatekeeper platforms”, being platforms that serve as a gateway between business users and end users, where the platform has a significant turnover or market value; has a significant number of active users; and enjoys an entrenched and durable position.

Where a company is identified as a “gatekeeper” it will be subject to a number of obligations including:

  • Requiring the gatekeeper to allow third-parties to inter-operate with the gatekeeper’s own services.
  • Requiring gatekeepers to allow business users to promote their offers and conclude contracts with their customers, outside the gatekeeper’s platform.
  • Requiring gatekeepers to provide business users with the data generated by their activities on the platform.
  • Preventing gatekeepers from ranking their own products or services more favourably than those of third-parties.

Next Steps

While neither the DSA nor DMA will form part of UK law, once they come into force, they will have the potential to apply to UK businesses that offer services in the EU.

Therefore, if you do operate the type of digital service or platform referenced above and offer services in the EU, you should take steps to understand the DMA and DSA and the impact that those Regulations may have on your business.