The DSA and its impact on digital business models. Also on yours?
Although the DSA (Digital Services Act) is an EU law, it also has a direct impact on Swiss companies that operate online platforms or offer digital services to users in the EU. Indirectly, however, it may also affect all other Swiss providers of digital services.
What is the purpose of the DSA? With the aim of protecting the fundamental rights of all users of digital services and curbing the spread of illegal content, the EU brought the Digital Services Act (DSA) into force at the end of 2022. Regulation 2022/2065 on a single market for digital services updated existing rules for digital services, in particular for online platforms, and extended their responsibilities and obligations.
Who does the DSA affect specifically?
The DSA affects all online companies that offer their product range in the EU – regardless of where they are based.
The term “digital services” is broadly defined and includes, for example
- Websites that offer no opportunities for interaction
- Internet infrastructure services
- Online platforms
- Online marketplaces (e.g. Amazon)
- Social networks (e.g. Meta, Instagram)
- Content sharing platforms (e.g. Box)
- App stores
- Online travel and accommodation platforms (e.g. AirBnB)
- Social media
The requirements are scaled depending on the role and size of a company and its impact on the online market. Particularly strict requirements apply to very large platforms and search engines with more than 45 million users. They are referred to as VLOP (Very Large Online Platform) or VLOSE (Very Large Online Search Engine). The specific requirements for them are set out in the Digital Markets Act (DMA).
What does the DSA require?
The DSA obliges providers of digital services to take on more responsibility and act more transparently, for example by
- the clear and rule-based moderation of content
- the disclosure of advertising algorithms
- effective measures against illegal content and disinformation (rapid removal or blocking)
- the publication of transparency reports
- the provision of a complaints system
- the preparation of risk reports (VLOP and VLOSE)
- the performance of audits (VLOP and VLOSE)
- the appointment of a legal representative in the EU for VLOPs/VLOSEs based outside the EU.
The requirements of the DSA are diverse and, depending on the size of the company concerned, affect various security disciplines (information and IT security, data protection) at the same time.
What does the DSA mean in concrete terms for the Swiss companies affected?
Swiss companies that operate online platforms or offer digital services to users in the EU must comply with the requirements of the DSA. Among other things:
- Reporting and cooperation in criminal offences (to combat illegal digital content)
- Data exchange with authorities
- Obligation to appoint an EU legal representative (based in the EU, directly liable for violations of the DSA)
- Establishment of a notice-and-takedown process for illegal content
- Transparency reports
- Strict rules for digital advertising (including a ban on targeted advertising for children, ban on advertising based on profiling of particularly sensitive data)
To avoid fines and legal risks, we recommend that such companies review their digital business models and business processes and adapt them to the DSA requirements if necessary.
Adopt DSA voluntarily? A good idea
The voluntary adoption of the protection mechanisms of this EU legislation by Swiss companies is a good option in view of the fight against illegal digital content and better (and demanded) protection for users of online platforms. It is an option that creates trust, especially as a solution specific to Switzerland regarding transparency and responsibility is unlikely to be found.
DSA realisation – best with us
Our data protection specialists, who work closely with other specialist departments, will be happy to support you with their best practice experience in DSA implementation
- Analyse where and to what extent your company is affected by the DSA
- Recommendations for action and roadmap for implementing the DSA
- Support during audits
- Ongoing advice on regulatory issues
The DSA has many challenges. You know the right partner to implement the DSA in a practical and efficient manner: us
Contact our experienced specialists for customised support.