The DSA and Small and Medium Enterprises as users of online services

13 October 2021

The proposed EU Digital Services Act (DSA) aims to protect users of digital services, but unfortunately it also creates serious new risks for both consumers and SME users. The DSA should be more mindful that national authorities will likely have limited knowledge and motivation to safeguard interests of foreigners.

The DSA gives far-reaching powers to national authorities to issue extra-territorial orders “against illegal content”. It also empowers “trusted flaggers” to notify platforms about illegal content. Such flaggers will be exclusively regulated in their country of establishment. Neither of those solutions provides potentially affected users with effective redress, even in cases of ideologically motivated orders or flagging.

The DSA also attempts to increase transparency of online platforms, while forgetting about the interests of the users whose data will be subject to such transparency. In particular, the DSA risks destroying the SMEs that rely on their skill in targeting ads on large online platforms. The DSA will make their targeting criteria (e.g. keywords) public so that they can be copied for free by any competitor, including non-European ones.

Download PDF The Digital Services Act and Small and Medium Enterprises as users of online services - final

EPICENTER publications and contributions from our member think tanks are designed to promote the discussion of economic issues and the role of markets in solving economic and social problems. As with all EPICENTER publications, the views expressed here are those of the author and not EPICENTER or its member think tanks (which have no corporate view).

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