The regulatory machine, which is the European Union, continues to make huge interventions into the digital arena. Despite Brexit, UK based businesses need to continue to monitor and respond to new EU legislation and anticipate where change may impact their activities.
The Digital Services Act (DSA) and Digital Markets Act (DMA), enacted on 16th November 2022 and 1st November 2022 respectively, are examples of massive regulatory change. Their obligations are gradually coming into force, and we here in the UK need to remain aware of them. They will have direct and indirect effects on anyone engaging with audiences online across the European Union.
Digital Services Act
The Digital Services Act focuses on enhancing the online consumer experience, improving transparency, and providing protection from harm as they interact with online services. Therefore, it can be seen as addressing some gaps left in the wider EU privacy regime post-GDPR, particularly in relation to the targeting of content to minors or the use of special category data. For advertisers, the chief impact will be a reduction in the availability of data across the EU. However, there may also be advantages, as the large online platforms are mandated to provide greater degrees of transparency around their own processes.
Very large online platforms and search engines are clearly the targets of this new legislation. In February of this year, these tech giants were required to release details about the volume of their user data. Based on that information, the European Commission has designated a number of key players with the status of “Very Large Online Platform” or “Very Large Search Engine”. These platforms, which include Facebook, LinkedIn and TikTok, as well as search engines like Google Search and Bing, will be required to increase transparency around the algorithms that deliver content and product sales. They will also need to provide regular reports on the steps being taken to risk assess and prevent harm to consumers and users.
DSA: What You need to know
This development has significant implications for businesses, as it offers them a fresh stream of data and information to process around the effectiveness of their spend with the major platforms.
On the other hand, it presents marketing teams with the challenge of incorporating this new data into their campaign planning strategies and additional considerations in adapting to potential changes in data availability for targeting purposes.
Digital Markets Act
The Digital Markets Act examines the competitive landscape around the provision of digital services and can be seen as an evolution of anti-trust or competition regulation in the digital world. Obligations are imposed on “gatekeepers” who offer core platform services. These large service providers, including Alphabet, Meta and others, will be required to offer a greater degree of transparency regarding their pricing and performance data, which will benefit advertisers and publishers. Practices which steer consumers towards platforms’ own subscriptions or services as a condition of use will be prohibited, along with any self-preferencing in ranking, indexing or crawling.
The use of personal data within these services will also be overhauled so that platforms are restricted from cross-referencing or combining data in a way which is unclear to users. The new regulations also work to create greater competition amongst services and to enable new entrants to the market. For advertisers and publishers seeking consent to use personal data, platforms will be required to provide greater assistance to ensure this happens.
DMA: What You Need to Know
This holds significance for businesses, as the new legislation could create fresh opportunities within an evolving competitive landscape, with the potential for pricing transparency to benefit marketers in their assessments of spending on major platforms.
Marketing teams will need to adapt by working to understand the best ways to leverage new sources of data and information to deliver the best outcomes for clients under the new regime.
What to Expect Next
With substantial – GDPR level – fines attached to breaches of the new laws, we can expect the businesses within scope to take concerted action to meet their obligations. We are entering a new era for the digital ecosystem and for individuals and businesses that interact with the largest online platforms, whether as consumers, service users or partners.
Here in the UK, the Online Safety Act which received Royal Assent on 26 October 2023, places new obligations on platforms to monitor, risk assess and control content which could cause harm to minors. The Digital Markets, Competition and Consumers Bill is also in progress through the UK Parliamentary process, including measures which overlap and align with the DSA and DMA in seeking to control the competitive marketplace in which platforms operate. For UK based businesses with a foot in both markets, keeping up to date with legislative currents on both sides of the channel continues to be critically important.