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Digital Services Act


The EU Digital Services Act (“DSA”) brings some of the most important changes to the regulatory framework for offering online content, services and products to consumers in the European Union. It will start applying from February 17, 2024 to a diverse range of intermediary services offered in the EU, including online marketplaces, web-hosting services, cloud services, search engines, and social media platforms.

What is new?

The DSA addresses a wide range of issues related to online platforms, including illegal content, hate speech, counterfeit products, and unfair competition. Its key points are:

  1. Enhanced Accountability: The DSA introduces new obligations for online platforms, making them more accountable for the content shared on their platforms. Platforms must provide predefined notice-and-action mechanisms for reporting alleged illegal content and follow up on such notices, including taking the necessary measures. Whether or not content qualifies as illegal is not determined by the DSA itself, but by the applicable law of the affected EU Member State.
  2. Transparency and Fairness: The DSA aims to promote transparency in online platforms’ policies and algorithms that influence the visibility and ranking of content. There will also be stricter rules for online advertising, for example a ban on targeted advertisements to minors on online platforms.
  3. Safeguarding User Rights: The DSA prioritizes user rights and empowerment. It requires online platforms to provide effective means for users to exercise their rights and introduces measures to tackle harassment and abusive behavior online.
  4. Strengthened Market Oversight: The DSA grants new powers to regulators to monitor and enforce compliance with the regulations. It establishes a single point of contact for cross-border issues, facilitates cooperation between EU member states, and enhances coordination with law enforcement authorities.

Who is affected?

The DSA applies to both B2B and B2C providers of digital intermediary services (intermediaries), who provide recipients with access to goods, services and content via the internet. This includes providers of:

  • mere conduit services (e.g. internet exchange points or wireless access points)
  • caching services (e.g. content delivery networks)
  • hosting services (e.g. cloud computing and web hosting)
  • online platforms (e.g. social networks and online marketplaces)
  • online search engines

The DSA applies to intermediary services that have a substantial connection to the EU, regardless whether the intermediary service in question has an establishment in the EU. Such substantial connection can exist where an intermediary service provides its services to a significant number of recipients or targets its activities towards one or more EU Member States.

It should be noted that providers of intermediary services that do not have an establishment in the EU but fall under the scope of the DSA must appoint a legal representative in one of the affected EU Member States, a principle familiar from the EU GDPR. The legal representative must have sufficient power of representation and resources, and has to act as a contact for authorities and service recipients, among other responsibilities.

Penalties for Non-Compliance

Organisations that fail to comply with the requirements of the DSA may face a fine of up to 6% of the worldwide annual turnover, or periodic penalties of up to 5% of the average daily worldwide turnover for each day of delay in complying with certain remedies, interim measures or commitments. As a last resort, the EU Commission can request the temporary suspension of the service.

For more information and assistance related to compliance with the Digital Services Act, please reach out to us at ERM.


The review was written by Rotem Perelman – Farhi, Partner and Heads of the firm’s Technology, IP & Data Department and Dr. Laura Jelinek, Associate in the the firm’s Technology, IP & Data Department.


* This newsletter is provided for informational purposes only, is general in nature, does not constitute a legal opinion or legal advice and should not be relied on as such. If you are seeking legal advice, it is essential to review the specific facts of each case in detail with a qualified lawyer.

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