On 15 December 2020 the European Commission published its long-awaited proposals on the Digital Services Act (DSA) and Digital Markets Act (DMA).

Both proposals take the form of a regulation meaning that once adopted they will be directly applicable in the member states' legal order without the need for transposition. The proposals will now need to be adopted by the Council of the EU and the European Parliament.

According to the Commission's press release the DSA and the DMA will:
set a high global benchmark for regulating digital services with clear obligations tailored to the importance of the online platforms.

The proposed DSA is aimed "to create a safer digital space in which the fundamental rights of all users of digital services are protected", while the DMA would establish "a level playing field to foster innovation, growth, and competitiveness, both in the European Single Market and globally".

In a nutshell, the DSA would set common but tailored obligations and accountability rules for providers of network infrastructure such as Internet access providers, hosting service providers, online platforms such as online marketplaces and social media platforms. A separate tier of obligations would apply to very large platforms, reaching more that 10% users in the EU. For the first time, full-fledged oversight and enforcement rules are contained in the proposal with the ability to set fines of up to 6% of the global annual turnover of platforms.

The proposed DMA would establish an ex ante framework for digital platforms designated as gatekeepers. Gatekeepers would be subject to a long list of ex ante obligations and prohibitions, many of which are inspired by past and pending antitrust investigations carried out by the Commission and national competition authorities. These include bans on using their users’ data and on self-preferencing their own services. Gatekeepers could be fined up to 10% of their total worldwide turnover for infringing their obligations, whereas systematic infringements of the DMA could lead to additional behavioural or, as a last resort, structural remedies.

As the proposals are extremely comprehensive, Cullen International has created a set of tools and reports, looking at them from regulatory and competition law angles, and making it easy to understand and track the proposals along the EU legislative process.

Contact us to get a personalised demo of our DSA/DMA coverage!