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Five reasons why the Digital Services Act and Digital Markets Act matter

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By Emma Beswick
The Digital Services Act (DSA) and the Digital Markets Act (DMA) will no doubt have huge repercussions for the EU's digital service providers.
The Digital Services Act (DSA) and the Digital Markets Act (DMA) will no doubt have huge repercussions for the EU's digital service providers.   -   Copyright  Image by Gerd Altmann from Pixabay

"Landmark", "far-reaching", and "ambitious" are just some of the ways industry insiders have described the draft digital legislation the European Commission is set to present on Tuesday (December 15).

While the detail of the Digital Services Act (DSA) and the Digital Markets Act (DMA) is yet to be set in stone, if adopted, the laws will no doubt have huge repercussions for both digital service providers based in the EU and companies outside the bloc serving European users, including the likes of Big Tech.

Here's why the new legislation is being touted as game-changing.

The EU could define change as a policy leader

The European Commission under Von der Leyen has promised to make "Europe fit for the digital age".

And many in the industry see this as a chance for Europe to write the digital rulebook if it plays its cards right.

"With this proposal, the EU has the possibility to be ahead of the curve," Jan Penfrat, senior policy advisor at European Digital Rights (EDRi), a European network of NGOs advocating digital rights, told Euronews.

"I hope the DMA/DSA will set us on a path where the EU can be leading globally on this issue, similar to what it has done with the GDPR (regulation in EU law on data protection and privacy)," he added.

The policy advisor observes that the US has focussed on antitrust law, but said this has been proven to be too slow and not strong enough to rein in the kind of power that Big Tech companies have.

It's long overdue

While the last two decades have seen life-changing advances in technology, the EU's legislation that governs the responsibilities of platforms - like social media - when they host other people's content has barely moved.

The DSA package of laws aims to revisit old rules called the e-Commerce Directive, which hasn't been updated for 20 years.

"In the last 20 years, the internet has changed tremendously. It makes a lot of sense to bring those rules up to date," said Penfrat.

It could affect citizens' fundamental rights, including freedom of speech

"Both the DSA and DMA have the potential to positively and negatively impact people's ability to enjoy their human rights," according to Penfrat.

Freedom of speech is one of the most obvious examples here — no regulation whatsoever would mean people's ability to take part in the public debate would essentially be determined by companies who could set their own the rules of participation.

But if the proposal said, for example, that every platform that hosts people's speech would have to have mandatory technologies to algorithmically determine potentially illegal speech before it is uploaded, this could lead to tech giants filtering out far more commentary that is necessary to avoid costly liability issues, according to Penfrat.

"I really wouldn't want to be in the European Commission's shoes right now," he added. "We need to find smart solutions that protect people's fundamental rights because the internet isn't going to go away."

The EU could stand up to tech giants

"From what we hear, the European Commission is going to try to strengthen its ability and the ability of other authorities to step in if the Big Tech companies have a too powerful position in the market," Penfrat explained.

Indeed, the European Court of Auditors recently said the EU had been ineffective in limiting Facebook and Google from destroying competitors and that it needed to overhaul its rules to make them fit for the digital era.

Several reports ahead of the proposal being presented said the draft law could see tech giants fined up to 10% of their turnover for serious competition infringements.

Penfrat said that the new act should allow the bloc to take a proactive rather than a reactive role in areas of the digital sector where powerful players hold a "monopoly position" that damages the market.

"We don't have to wait for the damage to be done. We can act right away ... before damage is done to other market players," he added.

Inter-app messaging could be made mandatory

Perhaps a less-spoken-of change that could make the lives of individuals easier if it is included in the legislation is mandatory inter-app compatibility.

"The commission wants to propose a kind of a blacklist of things that none of the big gatekeeping companies would be allowed to do," Penfrat explained.

Among other, more technical rules, he thinks the Commission could put forward obligation for a company to make its services interoperable with competitors.

In terms of messaging providers, this would mean you could send a message from the Whatsapp platform, the industry leader, to Viber, for example.

"WhatsApp maintains its dominant position in the market, mainly because they already have a huge user base," Penfrat said.

But, should it be proposed, mandatory inter-operability would mean that a new messaging service could decide to let its users send messages to WhatsApp and vice versa.