The EU Digital Services Act (DSA) is now in force and the first publishing deadline for the online platforms caught by it has recently passed.
Here, we provide a brief reminder of the purpose of the DSA, this new publishing obligation and other obligations travel companies need to watch out for.
For an overview of the DSA and how it applies to travel companies, please see our article from December 2021 here and also our webinar from December 2022: All change for 2023 (see here).
What is the DSA?
The DSA is part of the new EU legislative framework designed to create stronger regulation of online services and content. It regulates the obligations of digital services that act as intermediaries in their role of connecting consumers with goods and services, and it focuses on creating a safer digital space by providing more protection to consumers from illegal online content.
The DSA contains a common set of rules and obligations which apply across the single market for the providers of online intermediary services. It carries GDPR-style fines of up to 6% of annual worldwide turnover for non-compliance with its provisions, so it is incumbent on businesses to comply.
Who does it apply to?
The DSA applies to online “intermediary services” which:
- make, direct or target sales into the EU;
- have an establishment in the EU; or
- have a significant number of users in one or more Member States.
The definition of ‘intermediary services’ is wide but captures three types of intermediary service provider, the last of which is most relevant to travel companies:
- ‘mere conduits’ mediums through which information is transmitted to recipients;
- ‘caching’ services -the temporary storage of information which is shared between recipients; and
- ‘hosting’ services the storage of information for recipients, eg online marketplaces where consumers can conclude distance contracts with traders.
In general terms, the DSA applies to hosting services, marketplaces and online platforms (including online accommodation and travel providers) and it will apply regardless of where in the world these platforms operate from. It could catch UK and US based travel platforms if they are selling into the EU. Micro and small online platforms will be excluded.
We believe that the final category of ‘hosting services’ is the one which is most likely to catch travel companies, however this will depend on a number of factors including the information the travel company collects from customers and how that information is used, and whether the platform leads consumers to believe that the travel services they have purchased from other traders are actually provided by the travel company itself (or another company which the travel company is acting for). The analysis is not straightforward and is fact-sensitive to each business.
By 17 February 2023, online platforms caught by the DSA had to publish, on a publicly available section of their website, the number of average monthly “active service recipients” from within the EU.
Active service recipients can broadly be summarised as anyone who provides information or interacts with the information / service, by clicking on, commenting, linking, sharing, purchasing or carrying out transactions, or even viewing or listening to it.
Once the platform has complied with this initial publishing obligation, it must then continue publishing these figures at least once every six months. The EU Commission has published some useful Q&A guidance on how to calculate the number of active service recipients, which can be found here.
The information published will be used to determine which online platforms and search engines will be considered ‘very large online platforms’ (“VLOPs”) and ‘very large online search engines’ (“VLOSEs”) – which have, on average, 45 million unique active monthly users or more. VLOPs and VLOSEs will face more stringent rules under the DSA.
What else is to come?
More rules for online platforms are coming as more parts of the DSA come into force. These include:
- how to present information on the platform website in a way which makes it easy for customers to make free and informed decisions
- more transparency on advertisements – clearly labelling adverts and providing information on how adverts are targeted at certain users
- more transparency on how the information presented to users is ranked or suggested, and
- ensuring that it is possible to accurately identify and trace traders.
The EU Commission is set to issue secondary legislation and further guidance on these and other DSA rules. However, affected companies should, if they have not already, start considering how they will comply with these measures.
If you think your business will be impacted by the provisions of the DSA and you would like advice on these matters, please get in touch.