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The European Union’s Digital Services Act (DSA) and Digital Markets Act (DMA) were introduced as complementary pieces of digital policy reform, aiming to tackle the influence of Big Tech. Proposed together in late 2020 and approved by mid-2022, these regulations began operating in early 2024. While each law has its distinct objectives and rules, together they form a strategic response to the concentration of market power among major digital platforms.
DSA: Enhancing Consumer Protection and Content Moderation
The DSA focuses on consumer protection in the digital age, addressing issues such as the distribution of illegal goods on marketplaces and harmful content on social media. It aims to balance content moderation standards by regulating the processes involved rather than dictating specific content policies. The DSA mandates transparency and accountability from very large online platforms (VLOPs), setting standards for risk management and content moderation while respecting fundamental rights like freedom of expression.
The DSA applies broadly but imposes stricter requirements on larger platforms, reflecting the higher risks associated with their significant market power. The European Commission oversees compliance for VLOPs, centralizing enforcement to ensure consistent application across the EU and to prevent forum shopping.
DMA: Rebalancing Market Power
In contrast, the DMA targets the very top of the tech industry pyramid, focusing on a limited number of “gatekeepers” — dominant platforms that control access to critical digital services. The DMA seeks to ensure fair competition by imposing operational requirements on these gatekeepers, such as opening up their platforms to third-party services and ensuring interoperability. This regulation aims to prevent these companies from using their market power to stifle competition.
With penalties up to 10% of global turnover for violations, and even 20% for repeat offenses, the DMA carries significant weight. It applies to a select group of companies, including tech giants like Apple, Google, and Meta. The DMA’s rules are designed to address strategic infrastructure and prevent monopolistic behaviors that can hinder market innovation and consumer choice.
Interplay and Enforcement
Both regulations are enforced centrally by the European Commission, though their scopes and impacts differ. The DSA applies to a broader range of services, with a focus on content moderation and consumer protection, while the DMA targets specific high-power platforms to ensure competitive fairness.
The enforcement of these regulations is ongoing. For instance, the European Commission has initiated investigations into Apple, Google, Meta, and other major platforms under both the DSA and DMA. These probes cover various issues from content moderation and transparency to compliance with interoperability mandates.
While the DSA and DMA are still in their early stages, their introduction marks a significant shift in how digital markets are regulated in Europe. The aim is to foster a more competitive and consumer-friendly online environment, addressing both market power and content challenges in the digital age.
The full impact of these regulations will unfold over time, with ongoing investigations and compliance efforts shaping the future of digital governance in the EU.
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