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The Digital Services Act

Discover the Digital Services Act (DSA) and its impact on online platforms in the EU. Learn how organizations can adapt to new regulations and enhance user trust.

07/01/2025 · 2 minute read

The Digital Services Act (DSA), which came into force in November 2022, regulates the obligations of digital services that act as intermediaries in their role of connecting consumers with goods, services, and content.

The DSA applies to all online intermediaries and platforms in the EU, for example, online marketplaces, social networks, content sharing platforms, app stores, and online travel and accommodation platforms. Small and midsize enterprises (SMEs) are exempted from some rules that might be more burdensome for them. The Commission will carefully monitor the effects of the new regulation on SMEs.

Very large online platforms and search engines have additional obligations.

The regulation aims to empower users to make informed decisions about the advertisements they encounter by requiring clear information on why they are targeted and who funded the ads, including clearly labelling sponsored content from influencers and digital creators. The DSA establishes varying due diligence obligations for intermediaries based on their service type, size, and impact to prevent misuse for illegal activities and ensure responsible operation.

Each EU Member State will appoint a digital services coordinator to oversee brokering services and coordinate with relevant authorities, possessing the authority to impose sanctions, including fines and potential service suspension. The obligations and enforcement measures will vary according to the online service provider's characteristics, with fines potentially reaching up to 6% of a provider's global turnover.

Furthermore, the DSA introduces two new restrictions on targeted advertising on online platforms:

  • Targeted advertising to minors based on profiling is prohibited.
  • Targeted advertising based on profiling that uses special categories of personal data, such as sexual orientation or religious beliefs, is likewise banned.

How should organisations respond to the Digital Services Act?

Organisations need to assess the impact of the DSA on their business and business model, identifying where changes are needed and where further attention needs to be paid to current processes.

Trusted advisers can help organisations understand how this act can be applied within their existing framework by:

  1. Assisting organisations that need to comply with the DSA requirements with their risk mitigation strategy and future planning.
  2. Advising organisations on how they can leverage the requirements and provisions of the legislation to differentiate themselves in the market, enhance user trust, and attract potential customers.
  3. Assisting organisations in identifying and mitigating potential risks associated with the DSA. Helping them establish robust risk management frameworks, including processes for assessing and addressing emerging risks related to content moderation, data protection, and user safety.

A comprehensive plan that covers all the new and upcoming legislation covered by the EU’s digital strategy can create opportunities as well as mitigate risk.

To learn more contact a Marsh representative.

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