Out-Law News

'Very large online platforms' designated for Digital Services Act regulation

The European Commission has confirmed the first tranche of businesses designated as ‘very large online platforms’ (VLOPs) and ‘very large online search engines’ (VLOSEs) for the purposes of regulation under the EU Digital Services Act (DSA).

Services operated by technology companies including Google, Meta and Microsoft are among the 17 VLOPs and two VLOSEs that have been designated. Each of the services will have to be compliant with the full set of DSA obligations by 25 August 2023.

The European Commission’s designation was based on the user data the online platforms had to publish by 17 February 2023. Technology law experts Dr. Nils Rauer and Wouter Seinen of Pinsent Masons noted the list contains very little surprises and that the businesses on it will be well prepared to comply with the DSA. They added it is to be expected that other services could be designated as VLOPs or VLOSEs in future and that the list announced could therefore be described as a ‘first wave’ of services designated.

The DSA was finalised by EU law makers last year. It builds on existing provisions of EU law under the E-Commerce Directive, which governs what online intermediaries need to do currently when they become aware of the existence of illegal activity on their services.

When it begins to take effect, a new tiered system of regulation with apply, with obligations of varying stringency depending on the nature and size of the ‘intermediary services’ provided. The strictest requirements apply to VLOPs and VLOSEs and include an obligation to identify, and then address, systemic risks associated with their services.

Pinsent Masons has published a guide to help businesses understand the extent to which their services may be regulated under the DSA.

According to Rauer and Seinen, disputes over the scope and interpretation of the DSA are likely to emerge in future.

“Due to the ambiguities within the DSA and the areas where the new regulation is not overly precise, we may expect disputes and litigation arising from the actual application of the regulation,” Rauer said. All provisions of the DSA will fully apply from 16 February 2024, with certain obligations kicking in at an earlier date.

“As always with new law, it will be for the courts to fill the existing gaps and to clarify the interpretation of the respective legal provisions,” Seinen added. “That is natural and the greater the impact on the business, the sooner courts get involved.”

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