On February 17, 2024, the European Digital Services Act (DSA) went into force, ushering in a new age of accountability for digital service platforms.

This historic rule targets the biggest worldwide platforms that serve millions of people every day and house the products of thousands of third-party suppliers. It applies to host providers, online marketplaces, and social media networks. It is impossible to overstate the breadth and importance of the DSA's reach given its goal of creating a more secure and fair online environment for users throughout the European Union.

Protecting EU citizens from unlawful goods, material, and services while defending their basic rights online is at the heart of the DSA's goals. The bill establishes six fundamental pillars that will improve protections against online harassment, expedite the reporting process for illicit content, boost advertising transparency, and impose restrictions on specific targeted ads. This includes making it illegal to utilize private information or the information of minors for commercial gain, as well as creating easily available and free channels for complaints and streamlining terms and conditions to improve comprehension for users.

The DSA applies to a wide range of websites, including social media platforms, search engines, and very big online markets with user bases that surpass 10 percent of EU citizens, or about 45 million users. Moody's has mandated that digital service providers operating in the European Union fulfill a crucial "know your business" (KYB) responsibility in order to provide a safe, open, and reliable online marketplace. In order to avoid the sale of dangerous or counterfeit items and to safeguard the platform's reputation and compliance status, the KYB procedure is essential for verifying third-party sellers on platforms and necessitates extensive due diligence.

The DSA lays forth clear KYB requirements, requiring platforms to collect and verify essential trader data such as names, contact information, proof of identity, and registration numbers (where relevant). Due diligence prevents bad actors from abusing digital marketplaces and promotes a safer trade environment.

Furthermore, digital intermediaries must adhere to a number of compliance criteria mandated by the DSA. These include preventing system abuses, enforcing new regulations to protect consumer trust when tracking sellers in online marketplaces, outlawing manipulative "dark patterns," and stepping up efforts to take down unlawful content on the internet. Furthermore, the act provides strict regulations prohibiting targeted advertising based on sensitive personal data, emphasizing the need of protecting children.

In conclusion, the DSA requires online platforms to put in place measures to identify and eliminate illicit products, services, or content in an effort to make the internet a safer place. This entails increasing the openness of algorithmic procedures and placing additional requirements on online marketplaces to authenticate traders. The statute emphasizes how important it is for online marketplace providers to thoroughly screen both new and current traders to guarantee compliance, as well as how traders must supply accurate information. The DSA is evidence of the EU's commitment to promoting safer and more transparent online environments as the digital landscape changes.