European Union Adopts the Digital Services Act

Following the political agreements reached earlier this year, the Council of the European Union has approved the Digital Services Act, which governs the digital space, the protection of the basic rights of users, and measures against the distribution of illegal content.

The Digital Services Act will apply to every provider of online services offered to recipients established or located in the European Union, from Internet access or storage service providers to very large online platforms and search engines. The requirements applicable to each platform provider have been adapted to the nature and size of the services they provide. The requirements for small platforms will consist of a duty of transparency and the establishment of terms of use. However, large platforms and search engines will be required to meet stricter requirements. Violations are punishable with a fine of up to 6% of the platform’s global financial turnover.

The new law imposes unique obligations on operators of online markets (such as eBay) to combat the online sales of illegal products and services. It also prohibits platforms from using targeted advertising based on the personal information of minors, restricts the use of sensitive personal information for targeted advertising, including race and religious belief, and prohibits the use of "dark patterns" (i.e., marketing tactics designed to mislead users).

The new law, formally called Regulation 2022/2065 on a Single Market For Digital Services and amending Directive 2000/31/EC, was signed into law on October 19 and formally published on October 27, 2022. It will enter into force in fifteen months, on January 27, 2024. However, large platforms and large search engines may be required to comply with the law at an earlier date, four months after the European Commission decides to name them and announce that they are subject to the new law.

Click here to read the full press release of the European Council.

Click here to read the new law, as formally published in the Official Journal of the European Union.