Smaller Platforms Now Subject to EU Digital Services Act

Smaller online platforms operating in the EU must comply with the Digital Services Act (DSA) starting Feb. 17, the European Commission said during a virtual briefing. Smaller platforms are defined as those with fewer than 45 million users per month. National digital services coordinators (DSCs) will oversee compliance. Consumers cheered the expansion of the measure but urged proper enforcement.

The DSA governs providers of intermediary services such as social media, online marketplaces and online platforms. Platforms with at least 45 million active monthly users in the EU and very large search engines are subject to the most stringent rules. As such, they must analyze systemic risks they create from dissemination of illegal content or harmful effects such content has on fundamental rights (see 2311100001). However, all platforms except small and micro ones now must protect users against illegal goods and content. The EU defines micro platforms as employing fewer than 10 people and having annual revenue of less than $2.2 million.

This means companies such as eBay must have a contact point in the European country where they operate and, if headquartered outside Europe, a legal representative, an EC official said. In addition, they must cooperate with "trusted flaggers," described as any entity with particular expertise in identifying illegal online content.

Among other things, these platforms must issue transparency reports, take steps to protect minors from illegal content and publish user numbers to inform future decisions on whether they have become very large online platforms. They will also have to send users statements when they remove content or perform other content moderation activities.

Platforms that are "mere conduits," such as ISPs and content service providers, are also now subject to the DSA. Platforms that aren't established in the EU and for which it's unclear whether they have a legal representative there could now come under DSC compliance actions. The EC doesn't know how many platforms will now fall under the DSA, the official said: It's up to DSCs to determine the situation in their respective jurisdictions.

Asked if the act applies to generative AI applications such as ChatGPT, the official said the EC has identified two different situations: If an AI tool is embedded in platforms already subject to the DSA, it is covered; if it isn't embedded, then there must be a determination of whether the site is a platform or a search engine. If the former, the DSA applies.

As to whether the DSA applies to gaming and online gambling platforms, the official said it applies to everything that's illegal online. If a gambling site is a platform and it allows users to upload content that's illegal in a particular country and disseminate it to the public, then DSA complaint mechanisms apply and DSCs can order removal of the content. However, most DSA rules don't apply to small and micro platforms, the official added.

Asked how consumers benefit from including smaller platforms under the DSA, the EC official said that while the public believes the measure covers only hate speech and disinformation, it also addresses product safety, intellectual property protection and other matters. For example, the official said, eBay must now have a reporting mechanism that allows product makers to flag rip-off items or enables someone to report a website selling guns illegally. Another key role for the DSA is enforcing the "know your business customer" rule to ensure that buyers understand they're purchasing from safe sellers. The European Consumer Organisation said it's now "crucial" that governments establish supervisory bodies that will enforce the act and give them the necessary resources and expertise.

With European Parliament elections in June, the EC said it plans to adopt guidelines next month on risk mitigation measures for electoral processes.