How the DSA is changing the rules of the game for tech giants

Introduction

For a long time, the world of online platforms resembled the Wild West, where tech giants were both judges and juries. But now, the European Union (EU) has introduced the Digital Services Act (DSA). This law establishes, for the first time, uniform and strict rules for all digital service providers, from small hosting companies to the world’s largest players (such as Facebook, TikTok, and Instagram). The main message of the DSA is simple: what is illegal offline should also be illegal online. The law aims to make the internet safer, fairer, and more transparent for millions of users.

Transparency and no manipulation

The DSA requires that the process for making content decisions, which was previously unclear to users, become transparent. From now on, if a technology platform decides to restrict or remove user content, or to completely block a user’s account, it must send a specific, detailed notification about this decision. In this notification, the platform must clearly indicate which content has been restricted, the specific grounds for the restriction, and how the decision was made (whether by an automated system or a human moderator). These requirements ensure that users always know the exact reason for the restriction, which is a necessary prerequisite for protecting their rights. The platform must also clearly explain how users can challenge this decision and file an appeal if they believe it is incorrect.

The principles that shape a user’s content feed in recommendation systems must be disclosed. Platforms that use recommendation systems (e.g., TikTok, YouTube, Facebook) are required to provide users with at least one option for shaping their feed that does not rely on profiling based on personal data. This could be a feed that displays content in simple chronological order or shows only posts from sources that the user has directly subscribed to. In addition, platforms must clearly explain to users which parameters and criteria influence the content they see. For example, information should be provided that the content was recommended based on previous views of videos on similar topics.

The DSA also introduces a ban on the use of so-called manipulative design elements such as “dark patterns”. These interface design elements mislead users or force them to make unwanted decisions, especially regarding privacy or subscriptions. Examples of such manipulations include hiding the “Unsubscribe” button in a complex menu, while the “Continue using” button is prominent and bright, or the constant use of pop-up windows that force the user to mindlessly agree to data processing. The DSA imposes a direct ban on interfaces that mislead users, ensuring that users’ choices are truly free, transparent, and informed.

Control illegal content and goods

An important aspect is the responsibility of online platforms for content and goods distributed through their services, especially if they are illegal. The DSA introduces a “Notice and Action” mechanism that requires all online intermediaries to have simple, effective systems for users to report illegal content, including fraud, hate speech, or dangerous goods. Platforms are required to respond quickly to such reports and take the necessary measures to remove or restrict access to this content. Particular attention is paid to protecting large trading platforms. If a user purchases goods through such a marketplace, the DSA requires the platform to better verify sellers. To this end, a Know Your Business Customer (KYBC) obligation is being introduced. This requirement obliges marketplaces to collect and verify basic information about business sellers to prevent the sale of dangerous, counterfeit, or fraudulent goods to end consumers.

Strict rules for very large online platforms (VLOPs)

The most stringent and comprehensive requirements apply to VLOPs. This category includes platforms and search engines that serve more than 45 million active users per month in the EU. The DSA is based on the principle that these largest market players, given their significant systemic impact on society, bear the greatest responsibility.

VLOPs are required to regularly and thoroughly assess the systemic risks arising from their services. This includes analysing how their systems and algorithms may contribute to the spread of disinformation and manipulation that could negatively impact public safety, public health, or electoral processes. They must also assess the potential negative impact on the mental health of users, especially children, and monitor how their platforms could be used for criminal activity. Once these risks have been identified, VLOPs must implement effective measures to mitigate them.

To ensure compliance with these requirements, the DSA establishes accountability requirements. VLOPs must undergo annual independent external audits to verify their compliance with all DSA requirements, including the effectiveness of their risk management mechanisms. In addition, these platforms must provide verified researchers with access to their data and algorithmic systems. This is done so that independent experts can objectively analyse how the platforms function, how illegal content or disinformation spreads, or what impact this has on society. These measures ensure that control over the largest technology companies becomes external, rather than solely internal.

It is particularly noteworthy that the DSA has extremely serious enforcement mechanisms. In the event of violations, VLOPs face colossal fines of up to 6% of the company’s annual global turnover. These are not just symbolic amounts; they are sanctions that can be measured in billions of euros, forcing tech giants to view the DSA’s requirements as critical to their business.

Global Impact

Although the DSA is an EU piece of legislation, its impact is not limited to those borders. This phenomenon is known as the “Brussels effect”: since large technology platforms operate globally, it is economically disadvantageous for them to create completely separate, lower-quality versions of their services for regions outside the EU. Therefore, the high standards of transparency, security, and user rights established by the DSA are likely to spread worldwide. Changes in content moderation, algorithm transparency, and enhanced protection against illegal goods introduced by VLOPs for the European market are likely to be integrated into global systems, improving the digital environment for everyone. Thus, the DSA serves as a global regulatory benchmark, raising the overall bar for responsibility across all technology companies.

Conclusions

So, the main goal of the DSA is to restore trust in the internet. Low algorithmic transparency, widespread fraud, and disinformation have caused a crisis of trust, and the DSA is a legislative mechanism to address it. By introducing mechanisms for the rapid removal of illegal content, requiring the largest players to audit their systemic risks, and punishing manipulative practices with multi-billion euro fines, the EU is effectively investing in the safety and quality of the digital environment. This means that the experience of using social networks and online commerce should become not only more honest and predictable, but also fundamentally safer.

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