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ADAPTATION TO THE DIGITAL REVOLUTION: EUROPEAN UNION THE DIGITAL SERVICES ACT

With the gradual growth of the digital economy and the increasing number of digital service providers, it has become necessary to clarify certain obligations for a safe online environment in terms of issues such as consumer protection in the European Union. In this regard, the Digital Services Act ("DSA"), published in the Official Journal of the European Union on 27.10.2022 and entered into force on 16.11.2022, appears as a regulation that will direct the digital future of the European Union.

While determining the scope and obligations of different service providers with DSA, harmonization of the common market between member countries is also aimed. In this article, (i) the purpose of the act, (ii) what kind of legal obligations it will impose on companies and (iii) the importance of the compliance process with the act will be explained.

1- PURPOSE OF THE DIGITAL SERVICES LAW

There are various regulations put into force in the European Union to adapt to the digital revolution. Foremost among them are; Directive on E-commerce (Directive 2000/31/EC) and Directive on Technical Regulations and of Rules on Information Society Services (Directive 2015/1535/EU). These two directives basically clarify the definition of information society services. In this regard, information society service includes the services provided upon request of the service recipient via electronic means, for a fee.

However, there is a difference between the size of the digital economy that existed when these directives came into force and the size of the digital economy today. The fact that at the time the directives were published, even enterprises such as Google were not of their current size. However, today they have great economic power which exceeds many independent countries, sheds light on the need to change the regulations in line with the dynamics of the digital market, especially regarding intermediary service providers. In addition, to prevent the problems caused by the different legal regulations of the member countries, to ensure harmony in the digital common market and to establish legal certainty, the EU legislator emphasized the necessity of the implementation of the Digital Services Act.

2- THE ADAPTATION PROCESS WAITING FOR COMPANIES

The Digital Services Act will have an impact on online intermediaries and platforms such as online marketplaces, social networks, content sharing platforms, app stores, online travel and accommodation platforms.

The main obligations the DSA will bring are as follows:

- All relevant undertakings displaying online advertising will clearly explain in real time that the information displayed is advertising, on whose behalf the advertisement is displayed, and provide descriptive information about the main parameters used to determine the recipient to whom the advertisement will be displayed.

- Relevant enterprises will be required to review the identity information of third-party suppliers who conclude distance contracts with consumers through their platforms within the scope of "know your business customer".

- To strengthen the fight against illegal content online, including counterfeit products, all online platforms providing hosting services will be required to create user-friendly reporting and action mechanisms that will allow third parties to report illegal content on their services to the platform.

3- WHY THE ADAPTATION PROCESS IS IMPORTANT FOR COMPANIES

The Digital Services Act will not only affect online platforms and online marketplaces established in the European Union. Organizations that are not established in the European Union but provide services in countries within the borders of the European Union are also expected to comply with the Law.

In this context, many companies not established in the European Union will be obliged to appoint a legal representative and will benefit from common rules when providing services in the European Union.