How the EU’s Digital Services Act Impacts Brand Protection

The Digital Services Act (DSA) is a new set of regulations in the European Union that seeks to combat certain harmful activities in online space, namely illegal content and disinformation. 

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Enacted with the aim of modernizing the regulatory framework governing digital services, the DSA introduces a comprehensive set of measures designed to promote transparency, accountability, and user safety in the digital sphere. 

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For brand owners and professionals invested in combating IP infringements in online spaces, understanding the implications of the DSA is absolutely paramount. By familiarizing themselves with the DSA, brand owners can better navigate the evolving digital landscape and protect their intellectual property interests effectively.

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In this article, we’ll look at the key provisions of the DSA that include mandates for proactive and reactive content moderation processes to address illegal content swiftly, requirements for online platforms to trace and vet infringing sellers, and the publication of transparency reports detailing complaint volumes and processing outcomes. 

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What’s Included in the Digital Services Act?

There are a number of inclusions in the DSA, as the Act seeks to remedy a number of problems related to harmful behavior. 

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Quick breakdown for brands:

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• Online service platforms, like marketplaces and search engines, will need to implement proactive and reactive content moderation. 
• Complaints against IP infringements from law enforcement and trusted flaggers need to be streamlined.
• Platforms will also need to track repeat infringers to make future enforcement easier.
• Platforms must also provide more transparent reports for IP protection metrics

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Let’s review the major shifts, as they affect businesses looking to protect their brand and IP moving forward.

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Enhanced Infringement Content Moderation

The DSA mandates the implementation of proactive and reactive content moderation processes targeting illegal content. It aims to streamline the submission of infringement complaints, prioritizing requests from law enforcement and trusted flaggers. 

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Trusted flaggers refers to reputable entities authorized by online platforms or authorities to report illegal or harmful content under the DSA. These designated flaggers have credibility in identifying problematic content and their reports are given priority for review by platforms, and  include law enforcement agencies, government bodies, NGOs, or other recognized entities with expertise in identifying and addressing online content issues.

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Moreover, the Act grants platform users the ability to challenge content moderation decisions, with platforms obligated to provide users with information when their content is removed. This aspect of the DSA holds potential for improving the accuracy of content removals and reducing the incidence of false positives, thereby bolstering brand protection efforts.

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Tracking Repeat offenders

One of the critical provisions of the DSA is the requirement for platforms to track infringing sellers. This aspect is particularly beneficial for brand owners in their efforts to combat IP infringements. 

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Historically, brand protection has faced a significant challenge in dealing with repeat infringers who swiftly reappear on online platforms after having their accounts or rogue websites taken down. These infringers often exploit gaps in platform enforcement measures, making minor adjustments to their selling tactics to evade immediate detection. 

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By mandating platforms to systematically track and vet sellers, the DSA aims to disrupt this cycle of infringement and make it considerably more difficult for repeat infringers to return to platforms after being removed for IP violations. 

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This not only enhances the effectiveness of brand protection efforts but also strengthens the overall integrity of the digital marketplace by deterring repeat infringing activities and promoting a safer environment for consumers.

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Data Transparency

The DSA mandates platforms to publish transparency reports, providing detailed insights into metrics like complaint volumes, types of infringements, and processing outcomes. 

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This transparency empowers brand owners by offering a clearer understanding of the prevalence and nature of IP infringements across digital platforms. 

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Armed with this data, brand protection teams can prioritize their efforts more effectively, focusing on areas with the highest incidence of infringements or emerging trends. 

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Additionally, the publication of transparency reports serves as a valuable tool for benchmarking and evaluating the efficacy of content moderation measures implemented by platforms. By analyzing trends and patterns revealed in these reports, brand owners can refine their strategies and collaborate more efficiently with platforms to address IP infringements swiftly and decisively. 

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Sanctions for Non-Compliance with DSA

The DSA introduces stringent sanctions for non-compliance, with penalties of up to 6% of global annual turnover. This poses a hugely significant financial incentive, compelling online service providers like online marketplaces and search engines to prioritize compliance with DSA regulations. 

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For brand owners, this provision underscores the EU’s commitment to holding platforms accountable for enforcing IP rights and maintaining a safe digital environment. 

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The threat of substantial financial penalties incentivizes platforms to implement robust content moderation measures and swiftly address IP infringements, thereby reducing the prevalence of counterfeit goods and unauthorized use of trademarks.

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When Does the DSA Come Into Effect?

The DSA came on into full effect February 17, 2024, heralding the implementation of new regulations across the European Union.

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The Act came into effect in a limited capacity in August 2023, applicable solely to Very Large Online Platforms (VLOPs) and Very Large Online Search Engines (VLOSEs). However, the DSA now extends its reach to encompass all businesses in the EU.

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This expansion marks a major improvement in brand protection, as platforms of all sizes are now subject to the DSA's provisions, emphasizing the importance of understanding and complying with these regulations for entities operating in online spaces.

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