Who Are the Tech Giants Who Will Soon Face the EU’s New Digital Regulations?
Only one European company will be affected by the Digital Market and Services acts, which are slated to take effect in three months.
By Zsuzsa Detrekoi
In April 2023, the European Commission published the first list of 17 very large online platforms (VLOPs) and two very large online search engines (VLOSEs) that will have to comply with the new EU digital market and services rules. VLOPs and VLOSEs are defined as companies that reach at least 45 million monthly active users.
Surprisingly, the e-commerce platform eBay is not on the list as it did not reach the 45 million threshold, whereas its Chinese-owned rival Alibaba Aliexpress made it (although we do not know the exact number of its visitors). The sole European-originated company that made the cut is Zalando, a German online fashion retailer. The scarce presence of European platforms on the regulatory list explains, in the opinion of some experts, why such legislation was concocted in the first place.
The European Union adopted the Digital Markets Act (DMA) and the Digital Services Act (DSA) in July 2022 with the aim of countering the imbalance created by the dominant position acquired by the big digital platforms and creating a safer, more balanced, and transparent digital space.
The purpose of the DMA is to create a fairer level of competitiveness and market growth for all digital companies, regardless of their size. At the same time, the DSA’s objective is to address content-related issues (including targeted advertising and harmful and illegal content, among other things) and consumer protection. It aims to ensure that internet users have better information and more control over the online content they are exposed to.
The DSA is thus far the most important regulation in the world regarding the protection of digital users’ fundamental rights. The act aims to regulate social media, online marketplaces, VLOPs, and VLOSEs.
The regulations are adjusted to the size and influence of the digital players on the market. While smaller digital service providers are bound only by a few general obligations such as providing a point of contact or a legal representative, if necessary, and cooperation with national authorities, VLOPs and VLOSEs have to comply with much stricter obligations matching their role, size, and impact in the online ecosystem.
According to the DSA, for example, VLOPs and VLOSEs can be held accountable for their role in the dissemination of illegal and harmful content. According to the act, the large players have to comply with the full set of obligations within four months after the publication of the list. They include specific obligations such as the introduction of complaint and redress mechanisms, out-of-court dispute settlement systems, user-facing transparency of online advertising, code of conduct, and crisis response cooperation. By August 2023 at the latest, they all must be ready.
Zsuzsa Detrekoi is a technology and law expert with the Media and Journalism Research Center.
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