Digital services act (DSA) and its impact on online platform publishers

The Digital Services Act (DSA) is a regulation of the European Union that will become applicable on February 16, 2024, to improve the regulation of digital services within the EU.

Its main objectives include strengthening the trust of consumers and businesses, promoting fair competition among platforms, and increasing the transparency and accountability of products, services, and advertising offered online.

DSA specifically aims to protect online platform users from illegal content and promote fair and open practices in the digital environment, strengthening the digital single market and laying the foundation for the growth and innovation of the EU's digital economy in conjunction with the Digital Markets Act (DMA).

The regulation is particularly significant for online platform publishers who must adjust their operations to meet the requirements set by the DSA.

Who does the DSA apply to?

The Digital Services Act has a broad impact on digital service providers operating within the EU, specifically covering:

• Online Platforms: Including social media services, online marketplaces, and content distribution platforms.
• Very Large Online Platforms (VLOP): Platforms with at least 45 million monthly active users in the EU, which, therefore, fall under the stricter regulatory requirements of the DSA.
  
  

What are online platforms?

Online platforms are digital services that enable communication, information exchange, and commerce online. The regulation also encompasses online marketplaces, such as travel and hotel booking websites, facilitating online commerce between consumers and businesses. Multinational platform giants, such as Facebook, Instagram, Google, TikTok, and Amazon, have already started complying with the regulation from the summer of 2023, as they exceed the threshold of 45 million monthly active users in the EU.

Key Requirements for Online Platform Publishers

The Digital Services Act (DSA) introduces key obligations for online platform publishers:

1. Moderation Transparency: Publishers of online platforms must communicate their moderation policies and allow users to report content that violates them.
2. Advertising Clarity: Advertisements must be marked, and publishers of online platforms must provide information about the advertiser's identity and, if different, the entity financing the advertisement, as well as targeting parameters.
   
3. Algorithm Transparency: If algorithms are used for content recommendation, their operational principles must be disclosed to users.
4. Risk Management and Analysis: Platforms classified as Very Large Online Platforms (VLOPs) must regularly assess operational risks, ensure access to necessary information for research purposes, and appoint a person to coordinate compliance with DSA requirements.

These requirements necessitate scrutiny and potential modifications by online platform publishers to ensure their digital services comply with EU regulations.

Requirements Related to the Clarity of Advertising

Article 26 DSA requires online platforms to ensure that users have real-time access to some aspects of information, per advertisement, about each ad shown.

These elements of information are:

● That the ad is indeed an ad;
● The identity of the advertiser;
● The identity of the party that financed the ad, if different from the advertiser;
● Information about the "main parameters" used to determine the recipient;
● Where applicable, information about any means users may have at their disposal to change those main parameters. 

Online platforms are obligated to provide this information, although, in practice, they often may require the support of third parties to gather and present the data.

Roles and Responsibilities

Meeting the requirements for advertising clarity may require collaboration among different actors within the digital advertising ecosystem.

In gathering, processing, and presenting information, various stakeholders play a central role:

• Advertisers and agencies: Obligated to inform the payer of the ad.
• DSPs (Demand Side Platforms) and SSPs (Supply Side Platforms): May play a key role in processing targeted advertising information.
• Online platforms and VLOPs: Responsible for presenting transparent information for advertising by DSA requirements to users, typically in collaboration with technology and content partners.
• Technology and content partners: Ad servers and media players may need additional information to comply with DSA requirements.
• CMPs (Consent Management Platforms): Provide tools for managing user consent and presenting transparent information.

For more information on supporting the Digital Services Act (DSA) and preparing for it, you can find it in this Google article and related support from Prebid Server here.

Practical Implementation and Standards

The IAB Tech Lab and IAB Europe's working group have developed standards for collecting, compiling, and transmitting data, allowing online platforms to decide how to present this information to users.

To support a variety of use cases, the guidelines present two parallel pathways for displaying DSA transparency information: one through the online platform (publisher) and another through the ad creative.

The technical specification IAB Tech Lab maintained here provides data formats and a mechanism for transferring the necessary information required to implement DSA transparency information relevant to the advertising industry.

The solution should apply to the most relevant use cases, including programmatic and non-programmatic media buys and channels like desktop, mobile (web/app), video, and CTV.

For Relevant Yield users within the scope of the Digital Services Act (DSA), additional information on implementing DSA is available here.

Summary

The Digital Services Act (DSA) is a landmark in regulating the digital world, bringing unprecedented transparency and accountability to online platforms within the European Union.

Publishers of online platforms face new challenges and opportunities with the DSA. Requirements such as clear advertising labels and protection of users from illegal content necessitate reevaluating and reforming current processes. These changes enhance the credibility of digital content and trust among users and promote healthier competition and innovation within the EU's digital ecosystem.

The DSA is expected to transform the digital landscape fundamentally. It encourages online platforms to adopt more open and user-centric content and advertising management practices, leading to more responsible and safe digital environments. The stringent requirements of the regulation may also accelerate technological development as platforms seek innovative solutions to comply with the DSA.

In summary, the DSA sets the direction towards a more transparent, safer, and fairer digital society. Its impacts are far-reaching across digital content and advertising, renewing how online platform publishers and other content creators operate. Above all, the DSA establishes frameworks that foster trust and the advancement of users' rights in the digital world – elements crucial for the digital economy's long-term success.