• The EU institutions found an agreement on the Digital Services Act (DSA), a landmark law forcing tech platforms to police illegal content and disinformation.

• In the last mile, policymakers improved the law to limit the burdens for SMEs.

• “Digital SME innovators are our chance to challenge the dominant platforms and offer better online services. The DSA has to ensure that we do not limit digital SMEs but help them grow and innovate,” said Dr. Oliver Grün, President of the European DIGITAL SME Alliance.

The Digital Services Act (DSA) was agreed upon by the EU institutions last Saturday: After negotiations throughout the year, the European Parliament, the Council of the EU (Member States) and the European Commission agreed on its main principles. With this agreement, the DSA will likely enter into force at the beginning of 2024.

The DSA complements the framework set by the so-called e-Commerce Directive of 2000, which ensured that “intermediaries”, i.e., online marketplaces and other types of platforms, but also hosting providers, would not be held responsible for the content they hosted. This means that, e.g., YouTube is not held responsible for illegal content uploaded as a video, or Amazon cannot be blamed for unsafe products sold via their platform. The DSA now updates this rule: It aims to make digital service providers accountable for illegal products and content while maintaining the main principles of the e-Commerce Directive (limited liability, prohibition of general monitoring, country of origin principle).

SMEs excluded from bureaucratic obligations on the last miles

During the negotiations, the European Parliament had included stronger obligations also for micro and small enterprises. In particular, the European Parliament had included the obligation to apply for a waiver to be excluded from some of the provisions (Art. 16) and prove that they do not represent a “significant systemic risk”. “We are glad that the EU institutions have agreed on the original legal text proposed by the European Commission. It is important that small companies are excluded from some of the provisions by default, and do not have to go through bureaucratic procedures to apply for an exemption,” said Dr. Grün. Also, it seems like the institutions have agreed on additional SME exemptions, e.g., from some of the “traceability of traders” requirements formulated in a new section 3a of the text.

How will the DSA impact the digital world?

The European DIGITAL SME Alliance welcomes the Digital Services Act as an attempt to ensure that there are clear rules for what is illegal online. However, it is important to keep an eye on potential unintended consequences of the regulation and to strengthen the innovation potential of small and medium-sized digital players, including start-ups. Implementation is key, and the European Commission needs to be well equipped to ensure a successful implementation.

“Digital SME innovators are our chance to challenge the dominant platforms and offer better online services. The DSA has to ensure that we do not limit digital SMEs, but help them grow and innovate,” said Dr. Oliver Grün, President of the European DIGITAL SME Alliance.