The General Scheme of the Digital Services Bill 2023 was published by the Department of Enterprise, Trade and Employment on 20 March 2023. The EU's Digital Services Act ("DSA") (Regulation (EU) 2022/2065) came into force on 16 November 2022, and will fully apply in Member States from 17 February 2024 (discussed further here and here).
While many of the obligations imposed by the DSA, such as the requirements on online intermediary services providers, will apply directly, it is necessary to give effect to some of the DSA's provisions with national legislative measures. For example, Ireland must designate and empower a competent authority, known as the Digital Services Coordinator, to supervise and implement the DSA. The Digital Services Bill 2023 will provide for this.
In addition to providing for the appointment of the Digital Services Coordinator, as well as its supervisory and enforcement powers, the General Scheme provides for some other miscellaneous matters, including the liability regime for providers of online intermediary services, the harmonisation of court orders to take down illegal content from online services, along with the procedures for awarding "trusted flagger" status, certifying entities as out of court dispute settlement bodies and procedures for dealing with complaints from users or bodies mandated to act on their behalf.
The General Scheme should be read in conjunction with the DSA, and the Broadcasting Act 2009, as amended by the Online Safety and Media Regulation Act 2022 ("2022 Act"). It supplements the 2022 Act with provisions that are specifically required for Coimisiún na Meán (the Media Commission) in its role as the Digital Services Coordinator.
Key Provisions
Designation & Functions of Digital Services Coordinator (Head 6)
The Government has designated Coimisiún na Meán as the Digital Services Coordinator for the purposes of the DSA. Coimisiún na Meán was established by the Online Safety and Media Regulation Act 2022 on 15 March 2023.
An Coimisiún na Meán currently comprises one Executive Chairperson (Jeremy Godfrey), and three other Commissioners, each heading up particular functions, including the Online Safety Commissioner (Niamh Hodnett), the Media Development Commissioner (Rónán Ó Domhnaill) and the Broadcasting Commissioner (Celene Craig). A fifth Commissioner will be appointed to head up the new Digital Services functions, which are provided for in the General Scheme and the DSA.
The Digital Services Coordinator is responsible for ensuring coordination at national level for supervision of intermediary service providers and enforcement of the DSA. It is also responsible for liaison and cooperation with the European Commission and the Digital Services Coordinators of other Member States to contribute to the effective and consistent supervision and enforcement of the DSA throughout the EU.
The functions and powers of Coimisiún na Meán, in its role as the Digital Services Coordinator, are set out in various provisions in the DSA. The key provision of the DSA with respect to the Digital Service Coordinator's investigatory and enforcement powers is Article 51 of the DSA (discussed further below – see 'Enforcement').
Liability of intermediary service providers (Head 5)
The DSA deletes and replaces Articles 12-15 of the eCommerce Directive (Directive 2000/31/EC), with Articles 4, 5, 6, and 8 of the DSA. The new provisions, like the existing provisions, provide an exemption from liability for intermediary online services in respect of mere conduit, caching and hosting services.
The eCommerce Directive was transposed into Irish law by the EC (Directive 2000/31/EC) Regulations 2003 (S.I. 69/2003). The General Scheme proposes the repeal of those measures which transpose the now deleted provisions of the e-Commerce Directive. As the new provisions in the DSA governing liability of mere conduit (Article 4 DSA), caching (Article 5 DSA) and hosting services (Article 6 DSA) have direct effect, the existing national transposing measures are no longer required.
Articles 4 and 5 of the DSA concerning exemption of liability for mere conduit and caching services repeat exactly the now deleted provisions of Articles 12 and 13 of the eCommerce Directive. The main change is Article 6 of the DSA concerning hosting services, which replaces Article 14 of the eCommerce Directive. It now excludes from the exemption of liability a situation where online marketplaces present goods for sale as though they were the seller or at least that the recipient of the service who is the seller is acting under its authority or control.
Article 7 of the DSA has direct effect and accordingly no transposing measures are included in the General Scheme. It adds to the existing liability regime by providing an entirely new protection allowing an intermediary service provider to carry out voluntary own initiative investigations or similar measures against illegal content while retaining the benefit of these liability exemptions.
Article 8 of the DSA also has direct effect, and is not therefore addressed by the General Scheme. It repeats the provision in the eCommerce Directive, which requires Member States not to impose a general monitoring obligation on intermediary service providers.
Notification of Take Down & Information Orders (Heads 7-8)
The General Scheme give effect to Articles 9 and 10 of the DSA, concerning orders issued to online intermediary service providers to act against illegal content, and orders to provide information about specific recipients of their services. To ensure consistency in orders across the EU, it provides for the mandatory content (and limited territorial scope) of such orders, as listed in Articles 9 and 10 of the DSA, and obliges the relevant market surveillance authority or the courts, as appropriate, to issue the order to the electronic contact point that the provider has designated in accordance with Article 11(11) of the DSA.
Trusted Flaggers (Head 10)
The General Scheme implements the provisions of Article 22 of the DSA, which requires online platform providers (a subset of intermediary service providers) to give priority attention to certain notices that have been submitted through the notice and action mechanism in Article 16. These are notices that have been submitted by a "trusted flagger" which is acting within their designated area of expertise. The status of "trusted flagger" is awarded by the Digital Services Coordinator in the Member State where it is seeking the status is established.
The General Scheme requires Coimisiún na Meán to institute procedures for: the application process for the status of "trusted flagger", meeting its own notification obligations (it must notify the European Commission and Board for Digital Services of those entities it has granted "trusted flagger" status to), and the format for the reports made by trusted flaggers.
Certification of out-of-court dispute settlement bodies (Head 11)
The DSA sets out the circumstances in which recipients of services provided through online platforms may seek to have their disputes with the platform resolved by an out-of-court dispute settlement body. The Digital Services Coordinator in the Member State where the out-of-court body is established must certify the entity if it meets specified conditions set out in Article 21(3) of the DSA.
The General Scheme sets out the information that an entity must provide to Coimisiún na Meán when it applies to be certified as an out-of-court dispute settlement body, and empowers Coimisiún na Meán to set out the form and content of applications to ensure consistency and efficiency. An entity may be certified as an out-of-court body for a maximum period of five years, in line with the DSA.
Procedure for handling complaints (Head 12)
The DSA permits users of an online intermediary service, or a representative body mandated on their behalf, to lodge complaints with a Digital Services Coordinator alleging an infringement of the DSA. The user may make his/her complaint to the Digital Services Coordinator in the Member State where he/she is located or established, which may be a different Member State from where the provider is established.
The General Scheme requires Coimisiún na Meán to have procedures in place for handling complaints, given that a complaint may be handled in various ways depending on where the complainant and the provider are located. In particular, procedures should be in place for assessing the content of the complaint, identifying the appropriate authority to pursue the issues raised, keeping parties informed of progress, and ensuring any necessary follow-up where a complaint has been referred elsewhere.
Investigations & Mutual Assistance (Heads 13-16)
The General Scheme adds a breach of the DSA to the list of "contraventions" in the Broadcasting Act 2009, as amended by the 2022 Act, that Coimisiún na Meán can investigate. This effectively means that Coimisiún na Meán would exercise its investigatory and sanctioning powers in the same way regardless of contravention at issue (whether a breach of the DSA or some other provision of the Broadcasting Act).
It also proposes to extend the definition of a "contravention" to include a failure to provide correct and comprehensive information, a failure to reply to requests for information or to rectify errors and a failure to submit to inspections. This is to implement Article 52 of the DSA, which provides a specific financial sanction for these breaches, which is lower than the tariff for an infringement of a specific DSA compliance obligation on an intermediary services provider.
In addition, the General Scheme sets out various obligations on Coimisiún na Meán to notify matters connected with suspected infringements of the DSA to the other 26 Digital Services Coordinators, the European Commission, the European Board for Digital Services, or all three. These obligations are further set out in Article 57 (mutual assistance) and Article 65 (enforcement of obligations of providers of VLOPs and VLOEs).
The General Scheme also requires Coimisiún na Meán to respond, and to use its investigatory powers, in connection with requests for mutual assistance from a Digital Services Coordinator in another Member State, and for cross-border cooperation, in relation to a suspected breach of the DSA. Coimisiún na Meán may refuse a request on any one of the three stated grounds in Article 57(3) of the DSA. It also provides for joint investigations by Coimisiún na Meán with other Digital Services Coordinators in certain circumstances.
Enforcement (Heads 17-18)
Article 51(2)(a)-(e) of the DSA provides for five key enforcement powers that the Digital Services Coordinator has vis-à-vis intermediary service providers. These include the power to order the cessation of infringements and to impose remedies necessary to bring the infringement to an end. The Digital Services Coordinator also has the power to enforce against specified categories of other people for failure to comply with orders, such as failure to comply with an investigative order.
The General Scheme provides Coimisiún na Meán with the power to issue a notice to end a contravention of the DSA. It also gives effect to Article 51(3) of the DSA, by providing Coimisiún na Meán with the power to take additional measures in circumstances where an intermediary service provider established in Ireland has not remedied an infringement of the DSA, including, requiring the management of the provider to examine the situation, adopt and submit an action plan to end the infringement.
Where the provider does not comply with these requirements, Coimisiún na Meán may, in specified circumstances, apply to the courts for an access blocking order. Here, an access blocking order may be described as an order directed at a service, such as a broadband provider or an app store, to block that access with respect to a specific online interface such as a platform or search engine. The DSA is clear that such an order is intended to be a course of last resort.
In addition to the powers set out in the DSA and General Scheme, section 7 of the Broadcasting Act 2009, as substituted by section 8 of the 2022 Act, provides that Coimisiún na Meán shall have all such powers as are necessary or expedient for the performance of its functions and shall ensure that its functions are performed effectively and efficiently.
Financial Sanctions & Period Payments (Heads 19-20)
The DSA provides for fines to be imposed on intermediary service providers for failure to comply with their obligations. Fines may also be imposed on other specified persons for failure to comply with orders issued by the Digital Services Coordinator, such as orders to provide information or for inspection of a premises. These are not infringements of obligations in the DSA, which are obligations on providers of intermediary services.
Accordingly, the DSA makes a distinction between providers of intermediary services and other people who have connections to those providers or may possess information relevant in an investigation. Slightly different penalties attach depending on this distinction.
In line with the DSA, the General Scheme provides Coimisiún na Meán with the power to impose the following financial sanctions on intermediary service providers:
- Up to a maximum of 6% of the intermediary service provider's global turnover in the preceding financial year for breach of an obligation in the DSA.
- Up to a maximum of 1% of the intermediary service provider's global turnover or annual income for failure to comply with requests for information, whether in the context of meeting an obligation in the DSA to provide information or in the course of an investigation.
The explanatory note to the General Scheme notes that in the case of the 1% tariff, the DSA is silent as to whether the greater of turnover or income should be the maximum.
The General Scheme also provides Coimisiún na Meán with the power to impose periodic penalties where necessary to compel an intermediary service provider to end an infringement of the DSA, or to compel a provider or other specified person to comply with an investigative order. Proposed maximum periodic penalty payments include:
- Intermediary service provider: Up to a maximum of 5% of the average daily worldwide turnover or income of the provider in the preceding financial year, per day.
- Specified other persons: A daily rate of €1,000.
The General Scheme of the Digital Services Bill 2023 can be found here. We will be monitoring the progress of the draft Bill and will keep you up-to-date on developments.
Contact Us
If you would like to discuss the DSA or General Scheme of the Digital Services Bill, please do not hesitate to contact any member of our Technology and Innovation Group.