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MANILA, Philippines – European Union lawmakers approved new rules as part of the Digital Services Act package – the Digital Services Act (DSA) and the Digital Markets Act (DMA) – in an attempt to make digital spaces safer and to protect an individual user’s fundamental rights, and to level the playing field for smaller businesses seeking to compete and innovate in their given field against larger companies..

Some of the fundamental rights include protections against online profiling for advertising – including profiling minors, consumer protections against fraud, and the access to resolution mechanisms in their own country for content moderation disputes, such as post or video takedowns.

Read on for an overview of the package, as well as what they might mean for users in other countries.

What is the Digital Services Act?

The DSA aims to better protect consumers and their rights by setting up a transparency and accountability framework for tech companies – from companies like internet service providers and hosting services to online platforms, such as social media platforms and online marketplaces or app stores.

The aim of the DSA for society at large is to provide better democratic controls, and oversight over systemic platforms, and to better mitigate existing systemic risks, such as disinformation and manipulation.

The EU’s DSA primer also mentions specific rules for “platforms reaching more than 10% of 450 million consumers in Europe,” with these larger platforms having stronger obligations, being  mandated to design their systems to tackle specific risks, such as disinformation or the viral spread of illegal and harmful content. 

As an example, a platform like Facebook will now have to ban targeted advertisements to children or to people within special interest groups, such as through the use of special categories of personal data, such as ethnicity, political views, or sexual orientation. 

It also bans the use of “dark patterns,” preventing platforms from operating in a way that deceives, manipulates, or impairs a user’s ability to make free and informed decisions regarding the use of a particular platform or service..

Large platforms, such as Facebook and Twitter, as well as very large online search engines like Google or Bing, are also obliged to prevent the misuse of their systems by taking risk-based action and allowing independent audits.

Under the DSA, researchers will also have access to some of the data of these larger platforms to better understand how they work.

The DSA will be directly applicable across the EU and will apply 15 months after entry into force or from 1 January 2024, whichever comes later.

What is the Digital Markets Act?

The DMA, meanwhile, is a set of rules applicable throughout the European Union created in such a way as to allow businesses to have a fairer environment online. The rules encourage innovation and competition by making it harder for existing platforms to limit their development, with fines and other measures doled out for noncompliance.

The DMA also acknowledges the existence of over 10,000 platforms in the EU, over 90% of which are small and medium sized enterprises. Digital services in the EU previously had to deal with 27 different sets of national rules and as such, only larger companies can reliably handle the costs of compliance.

As a result, having one set of rules for the entire EU should allow for cross-border digital services to prosper, potentially creating up to 2% more cross-border digital trade in the single market.

It is also hoped the rules will allow for more and better services for users and consumers to choose from or in cases of platform switching, to let consumers have an easier time switching from one technology provider to another through interoperability.

More information on the Digital Markets Act is available here.

Why this matters

The work on the DSA and DMA can be used as a springboard for other countries to follow suit in trying to better regulate online platforms and services, though the degree to which other countries may succeed will likely depend on implementation and a little bit of faith in respective governments. 

For instance, should the Philippines try to enact its own regulations for online platforms and services, the framework would have to be there for the implementation of such orders, and experts would need to be working on it to ensure everything is fair and legal.

Additionally, would such a taskforce for regulation be autonomous, or will such regulations require court orders to be pursued before action can be taken?

In the Philippines’ case, takedown orders for 28 sites, including those of news sites like Bulatlat and Pinoy Weekly, were done under the anti-terror law. While a local version of the DSA and DMA might help lessen such instances, a bad local implementation of the DSA and DMA may allow for further takedowns.

Meanwhile, think tank The Wilson Center noted that, as most of the companies seen as large online platforms are in the United States, there may also be an impact on relations between EU countries and the US. It may appear as if the EU is unfairly targeting US companies by enacting the DSA and DMA.

What limitations exist?

Enforcement of the new rules, critics say, could be hampered by limited resources and manpower. Specifically, the European Commission will be responsible for supervision, investigation, enforcement, and monitoring large online platforms. These include imposing the penalties. 

The European Commission has set up a taskforce, with about 80 officials expected to join up, which critics say is inadequate. Last month it put out a 12 million euro ($12.3 million) tender for experts to help in investigations and compliance enforcement over a four-year period.

Large tech companies also have deep pockets they can use to contest specific rulings or act on any found loopholes, such as contesting any issues with regard to potential government censorship in a given EU country.

As such, the EU taskforce may need more funding and people with the right expertise to make its operations work.European Consumer Organization (BEUC) deputy director general Ursula Pachl also said that, “if the Commission does not hire the experts it needs to monitor Big Tech’s practices in the market, the legislation could be hamstrung by ineffective enforcement.” – Rappler.com

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