A practical approach to manage compliance

Are your customers, investors, partners or suppliers asking questions about compliance? What efforts are you making to gain their trust? Are regulations factoring into your design, and if so, which ones? The headache of identifying and abiding by relevant laws and regulations is time consuming, complex and continual – especially for technology-driven start-ups and scale-ups. You just want to get on with your business, grow and make a difference in our increasingly digital world.

Things are about to get more complicated. More than 20 years after introducing the e-Commerce Directive, the EU plans to revamp rules for digital service providers. The goals are to tackle the new challenges of digital transformation, harmonise the legal landscape and create a strong ‘digital single market’.
Sure, you could figure out how to fulfil obligations and manage risks all on your own. But we at Devence know how weighty a challenge that can be. We’ve learned the importance of discerning what’s applicable now, and what’s coming down the road. It’s the reason we developed a cost-efficient and practical approach to become and stay compliant; we take the headache away by offering insights you can turn into actions.

The new rules: How worried should you be?

Let’s break down the proposed EU rules. As part of its extensive regulatory package for digital technologies, the European Commission has introduced the Digital Services Act (DSA). The DSA aims to increase innovation, and responsible, diligent online behaviour by providers of intermediary services (eg, internet services, content distribution networks) in the EU’s single market. This is to ensure a safe, predictable and trusted online environment – one that allows EU citizens and other parties to exercise their fundamental rights, including freedom of expression and information.

Because the DSA is a regulation, not a directive, the rules will apply directly in all EU member states – to all EU market incumbents and contenders – through a single, harmonised regime. It will encourage the scaling up of smaller online platforms. And that means regulatory consistency, greater clarity and a level playing field for service providers and the EU’s platform ecosystem.

So where does your business fit in? That depends which due diligence category you fall under. The DSA basically has four layers of rules:

• General rules applicable to all intermediary service providers
• Additional rules for providers of hosting services
• Additional rules for online platforms (eg, marketplaces, social networks, app stores, content-sharing platforms, online travel and accommodation platforms)
• Additional rules for very large online platforms that have on average at least 45 million active monthly users in the EU
  

The great cost of non-compliance

The DSA will be enforced by Digital Services Coordinators, who will stop infringements, impose interim measures, and demand fines.

Beyond the penalties, non-compliance can cost your business trust. The EU regulations uphold a set of values, and your business values may not align with those. Customers and stakeholders rely on you to stay on top of regulations, respect their fundamental rights and online safety, and manage risk responsibly. Why wait until the DSA comes into effect?

Paying attention to these considerations while designing/developing your solution saves another cost: late-stage redesigns if temporary fixes aren’t meeting regulations. This kind of pre-emptive planning can even pay you back – increased operational efficiency and an improved customer experience mean a bigger competitive advantage.

Starting with an assessment, Devence can help you get prepared for the DSA and give you more insight into the upcoming obligations. And once you’re on the compliance track, we will help you stay the course by giving a clear, actionable picture of your business.