Digital Services Act: business management online platforms

In the series on the European Data Strategy, here is the second installment on the Digital Services Act (DSA).

In the first part, we discussed the background of the DSA, the conditions for exemption from liability of online platforms and enforcement. This second part we look at how online platforms need to adapt their operations to the requirements of the DSA, since the DSA came into force for all brokering service providers on 17 February 2024. The adjustments are linked to how online platforms (mere conduit, caching and hosting) may or may not obtain an exemption from liability, which was the subject of the first part of the series. What obligations (other than those resulting from authorities’ orders and complaints) do service providers have?

Reachability to authorities

First, they must designate a contact point for authorities, article 11 DSA, and a contact point for users, article 12 DSA.

Furthermore, as with the AVG, for providers based outside the Union but who do provide their services to the EU, a legal representative must be designated, Article 13 DSA.

General terms and conditions clear and transparent

In their general terms and conditions, brokering service providers shall include information on any restrictions they impose on the use of their service in relation to information provided by recipients of the service, Article 14 DSA. Such information shall include details of any policies, procedures, measures and tools used for content moderation, including algorithmic decision making and human review, as well as the procedural requirements of their internal complaint handling system. The information shall be described in clear, simple, understandable, user-friendly and unambiguous language and shall be publicly available in an easily accessible and machine-readable format.

Transparency obligations

Providers must comply with transparency obligations. Larger platforms are also required to issue annual reports on how they have engaged in content moderation and suspensions that past year and the number of disputes before an out-of-court dispute resolution body.

Providers of online platforms shall not design, organise or manage their online interfaces in such a way as to mislead or manipulate the recipients of their service or otherwise materially interfere with or undermine their ability to make free and informed decisions.

Advertising

Providers of online platforms that display advertising on their online interfaces shall ensure that, for each specific advertisement displayed to each individual recipient, the recipients of the service are able to identify, in a clear, concise and unambiguous manner and in real time, the following that the information is advertising, including through conspicuous markings.

Minors

Providers of online platforms accessible to minors shall take appropriate and proportionate measures to ensure a high level of privacy, security and protection of minors within their service.

Online platform providers shall not display advertising on their interface based on profiling using personal data of the service recipient when they are aware with reasonable certainty that the service recipient is a minor.

Merchant information

Providers of platforms where online trading takes place shall ensure that they receive information about traders and must verify this information. Otherwise, the provider should not allow the trader to post promotional messages about, or for offering products or services, on their platform, to people in the EU. It includes:

• name, address, phone number and email address;
• a copy of ID;
• payment details;
• address of registration of the merchant;
• a self-certification by the merchant that it only offers services or products in accordance with applicable laws.

If the merchant does not provide this information within 12 months or the information is not verifiable, the provider will have to suspend access to the platform. The trader may in turn complain about this, and if necessary go to an out-of-court dispute resolution body.

Some of this information must also be shared by providers on their platform for users. The provider must delete this information after 6 months from the date of termination.

Report button

Hosting service providers must put a report button on their website that notifies them of the presence on their service of specific information that this reporter considers illegal content. Such mechanisms should be easily accessible and user-friendly. An acknowledgement of receipt and notification on how the report will be handled should also be there.

Motivated action against service recipients

Hosting service providers shall provide all affected service recipients with a clear and specific justification for each of the following restrictions imposed on the basis that information provided by the service recipient contains illegal content or is incompatible with their terms and conditions:

1. restrictions on the visibility of specific information provided by the service recipient, including removal of content, blocking of access to content or downgrading thereof;
2. suspension, termination or other restrictions on monetary payments;
3. whole or partial suspension or termination of the provision of the service;
4. suspension or termination of the accounts of the recipient of the service.

Complaint handling system

Online platform providers should have a functioning internal complaint-handling system, whereby those who have submitted a complaint can track its handling and, if necessary, appeal against it to the out-of-court dispute resolution body. That appeal is also open to the recipient of the service covered by the online platform provider’s decision.

Providers of online platforms shall suspend, for a reasonable period and after a prior warning, the provision of their services to service recipients who frequently provide manifestly illegal content. This suspension must comply with the conditions mentioned above.

Distance contracts with traders

Providers of online platforms which allow consumers to conclude distance contracts with traders shall ensure that their online interface is designed and organised in a way which allows traders to comply with their obligations regarding pre-contractual information, compliance and product safety information under applicable Union law. This obligation of compliance by design therefore requires a good knowledge of the kind of obligations that service recipients have under Union law.

Where a provider of an online platform that allows consumers to conclude distance contracts with traders. regardless of the means used, becomes aware that an illegal product or service is being offered through its services by a trader to Union consumers. Then that provider shall inform the consumers who have purchased the illegal product or service through its services, insofar as it has their contact details, of the following:

(a ) the fact that the product or service is illegal;

(b ) the identity of the trader;

(c ) any relevant means of redress.

The obligation set out above applies only to the purchase of illegal products or services made in the six months preceding the time when the provider became aware of the illegality.

Conclusion:

The DSA places far more obligations on brokering service providers to safeguard the rights of customers and users in their operations. Providers of brokering services would do well to take up its implementation as best they can. As the obligations are clearly defined and due to the transparency obligations are also easy to follow.

Any questions?

Do you have any questions? Then contact one of our lawyers by e-mail, telephone or fill in the contact form for an initial discussion without any obligation. We will be happy to think along with you.