Europe gives final sign off to rebooted ecommerce rules • TechCrunch


European Union lawmakers have given final approval to an online safety-focused overhaul of the bloc’s ecommerce rules — the first major update to the legal framework for digital services since the year 2000.

The Council sign-off means the Digital Services Act (DSA) has cleared the last hoop — and been formally adopted.

The European Parliament already gave its blessing to the package in July.

The DSA lays out content moderation and marketplace rules that aim to streamline the removal of illegal content, services or products and drive accountability around such decisions.

The regulation also takes aim at the scourge of ‘dark pattern design’ — aka deceptive interfaces that try to trick consumers into making online choices that are not in their interests.

Commenting on the DSA’s adoption in a statement, Jozef Síkela, the Czech minister for industry and trade, said:

“The Digital Services Act is one of the EU’s most ground-breaking horizontal regulations and I am convinced it has the potential to become the ‘gold standard’ for other regulators in the world. By setting new standards for a safer and more accountable online environment, the DSA marks the beginning of a new relationship between online platforms and users and regulators in the European Union and beyond.”

The regulation will be published in the EU’s Official Journal on October 13, with the bulk of the measures starting to apply 15 months after the DSA’s entry into force — so in 2024 — to give digital platforms and services time to comply with tighter rules around governance and safety.

The EU has avoided a one-sized fits all approach by targeting a subset of DSA rules at so-called Very Large Online Platforms (VLOPs) and Very Large Online Search Engines (VLOSEs) — aka platforms with 45M+ users in the EU — which will have more stringent requirements and centralized supervision by the Commission itself.

The latter is intended to prevent Big Tech using regulatory forum shopping at a Member Statelevel to evade the new European rules.

In a major change, VLOPs/VLOSEs will also face transparency measures and scrutiny of how their algorithms work — as well as being required to conduct systemic risk analysis and reduction to drive accountability about the society impacts of their products.

Additionally, the DSA includes some limits on tracking-based advertising.

While VLOPs/VLOSEs must also offer users a system for content recommendation that’s not based on profiling.

Defenders of European fundamental rights had wanted the DSA to go even further but the package that’s been adopted is, in certain areas, a beefed up version of the Commission’s original proposal — so consumer protection advocates have reasons to be cheerful.

A crisis mechanism was one extra late addition to the package — added in response to Russian aggression in Ukraine to address risks around the manipulation of online information that’s a trademark of Kremlin propaganda.

It empowers regulators to analyse the impact of activities of VLOPs/VLOSEs on the crisis in question and “rapidly decide on proportionate and effective measures to ensure the respect of fundamental rights”, as the Council puts it.

For more on what EU co-legislators agreed read our round-up from April — when the provisional political accord was reached.

In parallel co-legislating, the EU also recently (in July) adopted a major reform of digital competition policy that will see a set of up-front requirements applied to the most powerful intermediary platforms (so-called Internet “gatekeepers”) — under the Digital Markets Act, the DSA’s sister regulation.

That regime is due to start operating early next year, although there will likely be a multi-month (at least) ‘quiet period’ as gatekeepers’ core services get designated as in-scope — so before any operational ‘dos and don’ts’ actually kick in. But by 2024 the regime will need to be showing its working.

The next few years will thus see a major shift in how the EU regulates digital services and platform power — with attention (certainly on paper) to both the economic and democratic impacts of Big Tech, plus a long-awaited safety-focused ecommerce update that the bloc’s lawmakers trumpet as a boon to the digital single market and innovators by fostering consumer trust.

Time will tell how many wrinkles will need ironing out. And enforcement is of course the next huge challenge. But — for now — the bloc gets to feel smug that it’s showing most of the rest of the world what functional digital policymaking looks like.