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Digital Services Act – revolution in e-commerce

by dr Damian Dobosz, dr Kamil Wielgus

6 February 2024, update: 31 January 2025

Major changes to e-commerce under the Digital Services Act came into force on 17 February 2024. The new law should attract attention especially of intermediary service providers such as online platforms.

What is the Digital Services Act?

The Digital Services Act is an EU regulation which, among other things, defines intermediary services and imposes new obligations on digital service providers. It is another important step to legislate on virtual reality.

It is worth checking if these changes brought by the Digital Services Act apply to your business too.

Digital Services Act – objectives

The Digital Services Act’s main objective is to create a digital service market that is safe for both Internet users and digital companies.

Which companies are affected by the Digital Services Act?

The Digital Services Act may affect, among others, online platforms, service providers, websites and online shops through which e-commerce transactions are conducted.

What are the new obligations?

The Digital Services Act applies to intermediary service providers. The intermediary services include:

a “mere conduit” service, consisting of the transmission in a communication network of information provided by a recipient of the service, or the provision of access to a communication network;
a “caching” service, consisting of the transmission in a communication network of information provided by a recipient of the service, involving the automatic, intermediate and temporary storage of that information, performed for the sole purpose of making more efficient the information's onward transmission to other recipients upon their request;
a “hosting” service, consisting of the storage of information provided by, and at the request of, a recipient of the service.

In other words, the intermediary service providers may include, without limitation, online platforms, content-sharing platforms, hosting providers, social media platforms, online stores.

What obligations does the Digital Services Act impose on intermediary service providers?

The Digital Services Act imposes a number of new obligations on the intermediary service providers. They include in particular:

use of user-friendly web interfaces and algorithms,
new rules of liability for content on portals, including the obligation to prevent illegal content,
mechanisms for users to report illegal content, an internal complaint handling system, restrictions on blocking user accounts and related obligations to ensure the traceability of traders on platforms,
new obligations regarding the protection of vulnerable individuals (e.g. minors),
tackling unfair practices in e-commerce.

What are the penalties for non-compliance with the Digital Services Act?

Fines for failure to comply with the Digital Services Act are – depending on the offence – up to 6% of your annual worldwide turnover.

Penalties will be enforced by the European Commission, digital services coordinators and other regulators.

How to prepare for the changes?

Start with the following steps:

check if the Digital Services Act applies to your business,
check the transparency of your interface, algorithms as well as content and advertising control mechanisms,
review your general terms and conditions of contracts,
review your website practices (e.g. blocking user accounts),
introduce mechanisms for reporting and dealing with user complaints.

How can we help?

We will be glad to check whether the Digital Services Act applies to your business and help you implement the necessary changes.

Legislation:

Regulation (EU) 2022/2065 of the European Parliament and of the Council of 19 October 2022 on a Single Market For Digital Services and amending Directive 2000/31/EC

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Damian Dobosz

Attorney at law (Poland)

Senior Associate

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