Understand the Essentials of the Digital Markets Act & the Digital Services Acts

Both acts, especially the Digital Services Act, will be burdensome for the tech giants to comply with. The EU is imposing a lot of paper pushing and compliance work but it's arguably for the better.

"The AI Act is incapable of addressing the number one threat AI currently poses: its role in increasing and entrenching the extreme power a few dominant tech firms already have in our personal lives, our economies, and our democracies (..) The EU should understand that the scale of the risks posed by AI is inextricably linked to the scale and power of the dominant companies developing and rolling out these technologies. You can't successfully deal with the former until you address the latter”

- Max von Thun, Europe Director of the Open Markets Institute (source).

Over the last few years, EU’s well-refined law-making machinery has been working overtime to safeguard human rights and a fair market in the digital era. Two of the world’s most prominent digital laws, the Digital Markets Act and the Digital Services Act were adopted in unison by the EU Parliament on July 5, 2022. 

Critics have accused the EU of regulatory overreach and overregulation with the two new laws. Although they will only directly affect the EU market their impact will be, and already is, global. In part due to the borderless nature of the internet and in part due to the so-called “Brussels Effect”, a term for Europe’s unique position to set global standards and norms with its regulations.  An article in The Economist from 2022 explains the concept well:

“The EU did not seek the role of global digital regulator, but was sucked into it by a phenomenon called the “Brussels Effect”, after the title of a book by Anu Bradford of Columbia Law School, which makes the EU the world’s regulator by default. America is too politically paralysed to play this role; China disqualifies itself by its authoritarian bent. In Brussels, by contrast, the power of lobbyists is more limited and mandarins tend to know their dossiers; this often results in regulations on which other countries can build. As for global companies, they have no choice but to comply if they hope to sell into one of the biggest digital markets.”

In this post, I will review what I consider to be the most important aspects of the Digital Markets Act and the Digital Services Act.