EU's New Digital Laws to Impact Businesses in 2023

The European Union is set to implement significant new digital legislation throughout 2023, impacting how businesses operate online. Key regulations like the Digital Markets Act (DMA) and the Digital Services Act (DSA) are designed to reshape the digital landscape, foster competition, and enhance consumer protection.

The Digital Markets Act (DMA), which entered into force in November 2022, becomes fully applicable in May 2023. It targets large online platforms designated as "gatekeepers" to ensure fair practices. These companies will be prohibited from favoring their own services, preventing app uninstallation, or using user data for third-party advertising without consent. Violations can result in fines up to 20% of a company's global annual turnover.

The Digital Services Act (DSA), scheduled for full effect in February 2024, imposes obligations on a wide range of online service providers. Its aims include strengthening consumer rights, creating a unified legal framework across the EU, and simplifying market access for smaller businesses. The DSA addresses issues such as illegal content, disinformation, and systemic risks. Penalties for non-compliance can reach up to 6% of a provider's global annual revenue.

These legislative pushes are partly driven by the upcoming European Parliament elections in 2024, as the current EU Commission aims to achieve its digital agenda goals. Businesses must proactively understand and comply with these new regulations to avoid substantial penalties and navigate the evolving digital economy effectively.