What the Digital Services Act Means for US Platforms and Marketplaces Entering Europe
Does the DSA apply to a US company?
Yes. If you offer an online intermediary service to people in the EU, the DSA applies, even with no office there. Companies without an EU establishment must appoint a legal representative in a member state.
This is a practical overview, not legal advice.
Obligations grow with the type and size of service
The DSA works in layers.
All intermediary services. A point of contact for authorities and users, clear terms and conditions, and a legal representative in the EU if you have no establishment there.
Hosting services. A notice-and-action system so anyone can report illegal content, and a statement of reasons to the user when you remove or restrict their content.
Online platforms, such as social networks, app stores and marketplaces. An internal complaint-handling system, access to out-of-court dispute settlement, priority handling for trusted flaggers, measures against repeat misuse, transparency reports, clear labelling of advertising, and no manipulative interface design.
Online marketplaces. On top of the above, you must collect and check key information about the traders on your platform before they can sell, and inform consumers when you learn an illegal product was sold.
Very large platforms and search engines, with 45 million or more monthly users in the EU. Risk assessments, independent audits and direct supervision by the European Commission.
Micro and small enterprises are exempt from some of the platform-level obligations. Fines for breaches can reach 6 percent of global annual turnover.
Why this is an operations question, not only a legal one
Most of what the DSA asks for is operational. Someone has to receive reports, review them, decide, explain the decision and handle the appeal. That is a trust and safety function.
I spent over ten years in Trust & Safety at Google. I worked on enforcement systems across Gmail, AdWords and Google Shopping, and led abuse prevention for more than a billion accounts. The lesson that carries over to any platform is that these workflows need to be designed early and kept simple. Bolting them on after launch is slower and more expensive.
What to build before you launch in Europe
- A reporting channel. Easy to find, available in the languages of your markets.
- A review workflow. Clear rules on what is removed and why, with records of each decision.
- Statements of reasons. A template that tells the user what was done and how to appeal.
- An appeals process. Reviewed by someone other than the original decision-maker.
- Trader verification, if you run a marketplace. Collect identity and contact details before a seller goes live.
- Transparency reporting. Track the numbers from day one so that reports are easy to produce.
- A legal representative in an EU member state.
Use it as an advantage
European users, merchants and regulators trust platforms that handle these things well. A marketplace that verifies sellers and resolves complaints fairly keeps better merchants and has fewer disputes. Done well, compliance improves the product.
Common questions
Does the Digital Services Act apply to small US startups?
Yes, if they offer an intermediary service to EU users. Micro and small enterprises are exempt from some obligations that apply to online platforms, but basic duties such as a point of contact and a legal representative remain.
What is a very large online platform under the DSA?
A platform with 45 million or more average monthly active users in the EU, as designated by the European Commission. These platforms face the strictest obligations and are supervised by the Commission directly.
What does a marketplace need to do under the DSA?
In addition to the general platform obligations, it must collect and make reasonable efforts to verify information about traders before they sell, design its interface so traders can meet their legal information duties, and inform consumers if it learns an illegal product was sold.