The Digital Services Act: Purpose, Scope and Impact

The Need for Regulation

The Digital Services Act (DSA) emerged in response to the rapid expansion of digital platforms and the complex challenges they pose for transparency, accountability and user safety. As online services increasingly shape public discourse and commerce, the need for robust regulation to manage illegal content, misinformation and platform accountability became clear. However, developing the DSA involved navigating diverse perspectives from tech companies, policymakers and civil society, each with competing interests around free speech, privacy and corporate responsibility. Balancing innovation with user protection required careful deliberation, as regulators sought to create a framework that would address the risks of the digital space without stifling growth or restricting fundamental rights. The DSA represents a significant step toward defining responsibilities in a digitalised society.

Aims and Categories

The DSA aims to create a safer, more transparent online environment across the EU by setting clear responsibilities for digital service providers. Its primary goals are to combat illegal content, improve user protection and enhance platform accountability. It establishes a framework to regulate platforms based on their role, size and potential societal impact, with ‘online intermediary services,’ ‘hosting services,’ and ‘online platforms’ as key categories.

Online intermediary services include infrastructure providers like internet access and domain hosting, while hosting services refer to entities that store data for users, such as cloud providers. Online platforms, encompassing social media and marketplaces, interact directly with users and are therefore subject to more stringent regulations. Within these categories, the DSA introduces the concept of ‘very large online platforms’ (VLOPs) or ‘very large online search engines’ (VLOSEs)—platforms or search engines with over 45 million EU users—requiring them to take additional measures for risk management and transparency. By differentiating these categories, the DSA seeks to apply proportionate responsibilities, emphasising transparency, accountability and the safeguarding of users’ rights across digital services.

Scope, Coverage and Implementation

The scope of the Digital Services Act (DSA) applies to a wide array of digital services operating within the EU, regardless of where the service provider is based. This means that the DSA affects both EU-based and international companies providing services to EU users, extending its influence well beyond EU borders. Any online intermediary, hosting service or online platform that offers services to EU residents must comply, ensuring that digital service standards are consistently upheld for all users within the EU.

In terms of coverage, the DSA imposes additional requirements on VLOPs and VLOSEs with over 45 million active users in the EU. These platforms are subject to stricter obligations related to risk management, transparency and accountability due to their significant impact on public discourse and safety.

The DSA took effect in November 2022, with full obligations for general compliance starting on February 17, 2024, for most platforms. For VLOPs and VLOSEs, compliance deadlines were sooner, as these entities were required to meet core requirements starting in August 2023. This tiered rollout was intended to ensure that platforms of varying sizes and societal impacts could integrate the DSA’s rules responsibly and sustainably.

The DSA establishes rules that reshape how users, businesses and platforms operate within the EU digital ecosystem, aiming for greater transparency, accountability and safety.

For Users:

The DSA introduces stronger protections for users by granting them greater control over their online experience and improving transparency around platform operations. Users can now report illegal content, such as hate speech or counterfeit products, with clear mechanisms for timely responses from platforms. Additionally, the DSA requires platforms to disclose how algorithms prioritise or recommend content, empowering users to understand the factors shaping their online experiences. For example, a user on a social media platform may see options to adjust their feed preferences, minimising exposure to certain content or sources. The DSA also prohibits targeted advertising based on sensitive personal data (e.g., ethnicity, religion), enhancing user privacy.

For Businesses:

The DSA’s rules affect businesses that advertise or sell products on online platforms, aiming to reduce counterfeit and unsafe products. Businesses must provide proof of product authenticity, contact information and relevant certifications to platforms to list products or services. For example, Amazon sellers must comply with stricter verification processes, ensuring that products meet EU standards. This transparency helps build user trust but also increases operational responsibilities for businesses. Furthermore, advertising businesses are affected by transparency requirements that mandate platforms to label ads clearly, indicating who paid for them and why they were shown to specific users. This measure ensures that ads meet ethical standards and improves accountability in online marketing.

For Platforms:

Platforms bear the most substantial changes under the DSA. They must implement systems to handle illegal content effectively, respond to user reports, and maintain detailed transparency reports on moderation actions. VLOPs face additional obligations to assess and mitigate systemic risks, such as the spread of misinformation or harmful content. Platforms like Facebook must conduct regular risk assessments, adapt algorithms to prevent harmful content amplification, and provide detailed insights into their content moderation practices.

Another significant requirement for VLOPs is the establishment of independent audits to ensure compliance with DSA standards, which encourages ongoing self-regulation. Furthermore, platforms must offer users non-personalised content options, meaning a user could choose to view content in chronological order rather than algorithm-driven feeds. This shift allows platforms to cater to users seeking a less curated experience, potentially impacting user engagement but enhancing transparency.

Impacts and Challenges

The DSA has already influenced the EU’s digital landscape, enhancing transparency and accountability for platforms and protecting user rights. Platforms have implemented clearer reporting mechanisms, transparency around content moderation, and additional safety measures. However, initial implementation has revealed challenges. Smaller platforms have struggled with the financial and logistical burdens of compliance, particularly regarding content moderation and algorithm transparency. Additionally, there have been criticisms around the adequacy of enforcement resources, with some questioning whether EU authorities can fully monitor and enforce compliance across large, complex platforms.

Internationally, the DSA has prompted discussions about digital regulation, inspiring similar legislative efforts. The United Kingdom’s Online Safety Bill, for instance, reflects similar goals in promoting safer digital environments. In the United States, although a comprehensive act is yet to be realised, policymakers have referenced the DSA as a model for regulating tech giants, especially concerning user privacy and content management. Other jurisdictions, including Australia and Canada, are also considering regulatory frameworks influenced by the DSA’s emphasis on transparency and accountability. Thus, while implementation remains complex, the DSA has positioned the EU as a leader in digital regulation, encouraging global standards that prioritise user safety and platform accountability.