All you need to know about the Digital Services Act

February 17th, 2024 marked the entry into force of a landmark piece of European Union (EU) legislation, affecting European users who create and disseminate online content as well as tech companies who act as “intermediaries” on the Internet. I am talking of course about the EU Digital Services Act, or DSA for short. The DSA was first proposed in December 2020, and is meant to update a 20-year-old law called the EU e-commerce Directive, which provides important safeguards and legal certainty for all businesses operating online. The principles of that legal framework, most notably the introduction of EU-wide rules on intermediary liability, are still of major importance today. The DSA is a landmark piece of European legislation because it also sets out, for the first time, enhanced regulatory requirements for (large) digital platforms, thus affecting the entire Internet ecosystem.

At Cloudflare, we are supportive of the longstanding legal frameworks both in Europe and other parts of the world that protect Internet companies from liability for the content that is uploaded or sent through their networks by their users, subscribers or customers. These frameworks are indispensable for the growth of online services, and have been essential in the growth of online applications, marketplaces and social networks.

The EU Digital Services Act consists of two main parts: First, the DSA maintains the strong liability protections for intermediary services that have existed in Europe for over 20 years, and modernizes them, including by giving explicit recognition of supporting Internet services. Services which perform important roles in the functioning of the Internet, such as CDNs, reverse proxies and technical services at the DNS level were not explicitly mentioned in the EU e-commerce Directive at the time. The DSA, in recital 28, recognises that those services, along with many others, are part of the fundamental fabric of the Internet and deserve protection against liability for any illegal or infringing content. This marks an important clarification milestone in EU law.

Secondly, the DSA establishes varying degrees of due diligence and transparency obligations for intermediary services that offer services in the EU. The DSA follows a ‘staggered’ or ‘cumulative’ approach to those obligations and the different services it applies to. This ranges from a number of detailed obligations for the largest platforms (so-called “Very Large Online Platforms” or VLOPs, such as the Apple App Store, Facebook, TikTok, and YouTube), down to less extensive but still impactful rules for smaller platforms, hosting services and Internet intermediaries. What is really important to note with regard to the different service providers that are impacted is that the DSA clearly distinguishes between (technical) intermediary services, “mere” hosting services, and “online platforms”, with the latter category having a number of additional obligations under the new law. Online platform services are considered as hosting services which store information at the request of the recipients of the service, with the important additional role of also disseminating that information to the public.

This proportionate approach is in line with Cloudflare’s view of the Internet stack and the idea that infrastructure services are distinct from social media and search services that are designed to curate and recommend Internet content. This principle of a targeted, proportionate response to the matter is also embedded in the DSA itself. Recital 27 states that “(...) any requests or orders for [such] involvement should, as a general rule, be directed to the specific provider that has the technical and operational ability to act against specific items of illegal content, so as to prevent and minimise (sic) any possible negative effects on the availability and accessibility of information that is not illegal content”. This is an important provision, as principles of proportionality, freedom of speech, and access to information should be safeguarded at all times when it relates to online content.

As a provider of intermediary services, Cloudflare has engaged with European policymakers on the topic of intermediary liability for a number of years. From the start of the legislative process on the proposed DSA in 2020 we have contributed extensively to public consultations, and have shared our views on the proposed DSA with lawmakers in Brussels.

In many ways, the final version of the law reflects our existing practices. We have long taken the position, for example, that our intermediary services should have different rules than our hosting services, as is anticipated under the DSA. We have taken a few additional measures to ensure compliance with DSA requirements. For instance, we’ve announced a new legal representative in the EU and point of contact for the purposes of the DSA.

Cloudflare has strongly believed in transparency reporting for a long time, and we have issued transparency reports twice a year since 2013. We recognize that the DSA includes some new requirements around transparency reporting, some of which match with our current reports and processes, and others that do not. We will be revising our transparency reporting, to reflect the DSA’s requirements, beyond our existing documentation. We have also taken steps to confirm that our limited hosting services comply with DSA requirements.

The EU Digital Services Act, because of its enhanced regulatory requirements for (large) digital platforms, represents a significant change to the Internet ecosystem. Cloudflare feels nonetheless well-prepared to address the different requirements that came into force on February 17, 2024, and we look forward to having positive and constructive conversations with relevant European regulators as they start to work on the enforcement of the new law.