It’s been a long-time coming, but in July the European Union finally adopted two legislative initiatives that create a single set of new online rules applicable across the bloc. The Digital Services Act (DSA) and the Digital Markets Act (DMA) are intended to create safer online spaces and bring more competition and transparency to digital markets.
“The DSA is largely focused on protecting individuals from the harms which are generally acknowledged to be proliferating in online environments,” Will Richmond-Coggan, a data and information law specialist at Freeths LLP explains, “while the DMA is primarily aimed at protecting smaller businesses from what are considered to be the market-distorting effects of certain companies referred to as ‘Gatekeepers’ having a broad grip on the fundamental ecosystems of the internet.”
Gatekeepers are defined as, among other things, having an “entrenched and durable position in the market” and those that “link a large user base to a large number of businesses,” – so, Apple, Google, Amazon, Meta et al.
The Act places a set of legally binding ‘dos and don’ts’ upon Gatekeeper companies to build more fairness and transparency into the opaque world of online algorithms, advertising, and ranking.
Dr Oles Andriychuk, a reader in law and director of Strathclyde Centre for Internet Law & Policy at the University of Strathclyde, says the DMA could help end the omnipotence of Big Tech.
Under the Act, which will be applied in 2023, Gatekeepers are not allowed to treat services and products offered by themselves or affiliated companies more favourably in search rankings than similar services or products sold by third parties.
“The discretion the Gatekeeper currently has to downgrade or upgrade a seller’s position currently depends on factors not necessarily known,” explains Andriychuk. “The vertical mission of the DMA is not to get rid of these practices outright – this is fairly impossible – but to at least bring some order and transparency.”
Gatekeepers will also be required to provide greater transparency about algorithms, such as those for recommended content – the ‘people who liked this also bought this’ feature, for example.
Additionally, under the DSA, public-interest researchers can apply for access to platform data as another layer of independent scrutiny.
It also bans online platforms from using minors’ and sensitive data to serve users with targeted ads, as well as the controversial practice of political microtargeting in Europe. Human rights group Global Witness has criticised the DSA for not applying the limits on ad targeting to Google’s display advertising or news websites, however, and only covering online platforms that share user content, such as Facebook, Instagram, or YouTube.
Other features of the DMA include allowing business users to access the data they generate in their use of the gatekeeper’s platform, including that of advertising performance. Users can also promote their products and services and conclude contracts with their customers outside the platform.