What the Digital Service Act Means for Small Businesses

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The Digital Services Act (DSA) is a new set of regulations agreed upon by the European Parliament and Council on the 23rd April 2022. The rules have been set up to try and counter illegal online content, which includes the sale of illegal goods and services. It also means there are new ways to trace sellers on ecommerce sites, but, while the DSA is designed to safeguard online users, many small businesses are worried about how it could affect them. Let’s delve deeper into what it means for small businesses operating in Europe.

What are the goals of the Digital Services Act?

Source: europa.eu

The European Commission explained that the Digital Services Act was created with the goals of protecting consumers and their rights online; establishing robust transparency and accountability for online frameworks; and promoting innovation, growth and competitiveness within the single market. The Act is designed to make social networks, search engines and ecommerce websites responsible for the content on their sites – and ensuring the safeguarding of their users.

Why have the rules changed?

The current rules were adopted in 2000, and in the 22 years since then, the online world – just like the real world – has changed rather a lot! Online platforms have dramatically broadened their scope, offering their users so many benefits and possibilities. Alongside this, the ecommerce world has been opened up to allow cross-border trading both within and outside of the EU. This creates more opportunities for the illegal content and illegal goods to be disseminated, as well as spaces for the uncontrolled sharing of information to take place.

At the same time, the Act erases legal complications arising due to the different laws involved, which is hoped will create more opportunities for online growth and competition.

Is my area of business affected?

The Digital Services Act applies to swathes of online services, including ISPs, cloud services, messaging providers, social networks, app stores, travel and accommodation providers or ecommerce sites. Services deemed to be ‘very large’ (defined as reaching at least 45 million users in the EU) – such as TikTok, Apple and Amazon – as well as ‘very large’ search engines (reaching greater than 10% of consumers) have more responsibility in terms of limiting illegal online content, but small businesses are affected too.

As the DSA is an EU-wide law, all companies offering services within the Union (even if the company is not registered there) must comply with the following:

  • Companies who trade in the EU but are not established there need to designate a legal representative there. So, if you are a UK-based company, but you offer services in France, for example, you would need to appoint a legal representative in the EU who has to cooperate with supervisory authorities. They can be held liable for non-compliance, too, so they need to be fully aware of the new regulations.
  • Companies must have a notice-and-takedown mechanism to allow users to notify the platform of illegal content.
  • When content is removed, an explanation must be provided for the user whose content it was. There must also be the option to contest removals.
  • How companies use their users’ data must be explained in their T&Cs in ‘easy, accessible, and unambiguous language’ – in other words, no waffle.
  • ‘Know Your Customer’ procedures must be implemented, with information about traders kept in order to make the tracking down of illegal goods easier, when necessary.

How does the DSA affect small business SEO?

Source: theparliamentmagazine.eu

Because the framework established in the DSA imposes rules around transparency, it means that search engines will have to explain to their users how they advertise, how they moderate content and – crucially in terms of SEO – how they use algorithmic processes. This means there is far less guessing when it comes to working out how and why you rank where you do in search engine listings. The DSA aims to make the internet a more transparent place, and the penalties for non-compliance are steep; up to 6% of annual turnover, for digital service providers. This may well mean that SEO services in Europe are carried out slightly differently, and it may be wise to enlist the support of an international SEO consultant, like those found at www.indigoextra.com to help navigate through the early phases of the framework’s implementation.

How long do I have to prepare?

The good news is, you don’t need to start panicking just yet. The DSA is expected to come into force in early 2024, which gives you a little time to get organised – but you might want to start thinking about it now so you’re not caught out.

The Digital Services Act aims to make the internet a safer place, as well as promoting growth and competition so in the long run, it should be a good thing. With a little foresight and planning, small businesses operating in the EU will be able to plan for these changes and reap the rewards in the long term.

However, we do believe that our readers would like to hear a prolonged explanation. Well, if you are interested in finding out some new information, let’s go!

First: Set Up Some Plans!

As we stated above, the new rules are going to be applicable to different areas and marketplaces. App stores, different content-sharing platforms, and social media networks will have to adapt their way of functioning to meet the requirements. We do not know what exactly you are doing and in which industry you are participating, but there are three things you need to put into consideration and make plans about them.

First of all, you need to take care of all the internal control and risk-management processes. That means you will have to put into consideration all the options that will let you disable any kind of illegal content. Apart from that, you will also have to put into consideration the design of the services you are providing as well as whether your business model is suitable for the new set of laws.

For example, let’s imagine that you plan to start an ad campaign online. According to the new requirements, all the political and commercial ads will need to confirm a couple of things. You will have to identify your sponsors, and transparently show the amount of money you have spent on ads of that type. Apart from that, people will no longer manage to target people based on some sensitive personal data. “Sensitive personal data” defines the information about any person in the world about their sexual orientation, religious beliefs, and similar stuff. That means you will have to adapt your business model and functioning in case these requirements limit you.

Finally, as you can guess, the third thing the new set of rules is impacting is organizational structures. You will have to make plans that will let your company reassess the adequacy of all the organizational structures and “sub-structures” within your business.

Compliance Track-Record Has to Be Created!

Source: allenovery.com

Well, this is also one of the steps you will have to make to reach your goal. The enforcement system that we will have is not going to be the same as before. All the markets will experience certain substantial changes, and you have to be ready for them! If you want to ensure a high level of effectiveness, you will have to prepare solid evidence in advance. Whichever changes in the policy of your business you plan to make, they have to be properly documented and collected. If you properly measure your service-level performances and create the mentioned-above compliance plans, you will easily create a track record necessary for the new rule changes.

Conclusion

These are all the necessary pieces of information you should know about the new Digital Service Act. We do understand that things probably look confusing and challenging at first. That is the reason why we suggest you read this article again and again and start preparing for a new set of rules on time. The purpose of these changes is to make the online world safer for an average user. Don’t be afraid of it and stick to the tips we shared in this article!