The DSA Proposal’s Impact on Digital Dominance 

One of the most pressing questions in the ongoing European debates about the Digital Services Act (DSA) proposal is the question of dominance, and specifically the question of the disproportionate power and societal impact of dominant services on online speech and the fundamental rights of users.

With the DSA proposal, the European Commission aims to provide a new regulatory framework for the responsibility of online services in the EU internal market. Specifically, the DSA departs from the self-regulatory paradigm for online service responsibilities. It sets out to overcome the existing fragmentation and regulatory gaps by defining clear and proportionate obligations for online services with regard to illegal content and content moderation practices more generally, which reflect the difference in resources and societal impact of the various actors on the market. In the intention of the Commission, legal clarity should, in turn, translate into a safer online environment, where providers are held accountable and users’ fundamental rights (in particular, freedom of expression, privacy and data protection, non-discrimination and right to an effective legal remedy) are duly protected.

Thus, the DSA aims at providing a harmonized regulatory framework for addressing online harms, while protecting users’ fundamental rights. However, there is a risk that imposing accountability at the threat of fines might increase the power of already dominant intermediaries. This problem is particularly evident for content moderation, where the DSA framework threatens to further strengthen the role of Big Tech in determining what is acceptable online speech. Over the last decades, a handful of services have consolidated their position as the primary arbiters of speech and online activity. The fact that Facebook is actively calling for increased regulation, widely considered to be informed by a wish to further consolidate its power, may serve as a warning for the potential anti-competitive impacts of regulation such as the DSA.

In this contribution, we discuss the question of whether the DSA can be expected to further entrench the power of dominant services. First, we consider how the DSA impacts the relative competitiveness of dominant and smaller services, and how the economics of content moderation tend to favour very large online platforms (VLOPs). Second, we focus on a selection of provisions in the DSA and how these have the potential to entrench VLOPs‘ dominance and private power, while providing suggestions for better safeguards.