Dutch Economy Minister Gives Lawmakers Feedback on EU Digital Services Act
On September 23, 2024, Netherland's Minister of Economic Affairs sent a letter to parliament detailing his first impressions on the functioning of the EU's Digital Services Act (DSA). The letter addresses three main areas: execution and oversight at the European level, execution and oversight in the Netherlands, and application of the DSA by the civil courts.
Minister of Economic Affairs' Letter
The minister's letter to the House of Representatives contains his first impressions of the DSA. Below is a summary of the letter's main findings:
- European-level execution and oversight
The minister concludes that the obligations under the DSA have already led to visible changes on platforms. For example, users of very large online platforms (VLOPs) can now disable the use of recommendation systems.
VLOPs and very large online search engines (VLOSEs) have had to comply with the DSA since 25 August 2023. The European Commission (EC) has designated 25 services offered by 20 different providers as VLOPSEs. Several providers have appealed their designation as a VLOPSE, but the General Court and the Court of Justice of the European Union (CJEU) have rejected these requests.
The EC has exclusive responsibility for monitoring and enforcing the obligations for VLOPSEs and have initiated several proceedings against providers for failing to meet DSA obligations such as investigating systemic risks and implementing mitigating measures.
- National-level execution and oversight
The proposal for the Implementation Act for the DSA is currently at an advantaged stage with the House of Representatives. In the Implementation Act, the Netherlands Authority for Consumers and Markets (ACM) and the Data Protection Authority (AP) will be designated as competent authorities. The minister emphasized the importance of swift parliamentary action to avoid further EC infringement procedures.
On October 8, 2024, the minister updated the House of Representatives about the ACM 2014 Fines Policy Rules in relation to the DSA Implementation Act. The minister mentioned that the ACM needs new fining rules for DSA violations since the DSA requires supervisory authorities to operate independently without external influence, per the decision of the CJEU. The current policy, adopted by the minister, doesn't meet the "complete independence" standard set by the CJEU.
Currently, the ACM has been provisionally designated as the competent authority and digital services coordinator. Although not fully empowered yet, the ACM has already taken several actions, including receiving and forwarding reports of potential DSA violations to other authorities, participating in EU-level meetings, and collaborating with other regulators.
The ACM has also conducted a sample survey on DSA compliance in the Netherlands and has initiated contact with various companies based on the findings. Lastly, the ACM has published a guidance that further explains what companies must do to comply with the DSA. (See the Law-Now article "Netherland's Consumer Authority publishes DSA guidelines for providers of online services").
- Application by the civil courts
The DSA has a direct effect, allowing users of intermediary services to invoke their rights under the DSA in civil courts. This has already occurred in several cases in the Netherlands, particularly concerning content moderation issues.
The minister concludes that recent case-law demonstrates that the DSA provides users with new tools to challenge actions by online platforms, such as account removals or shadow bans, based on transparency and due diligence obligations contained in the act.
Conclusion
The Minister anticipates that the DSA's impact will become more visible over time through legal cases, guidelines, codes of conduct, enforcement actions, innovations, market developments, and voluntary service adjustments.
For more details on the DSA and its implementation in the Netherlands, contact your CMS client partner or these CMS experts.