Report from EuroNews
In Brief – The European Commission is hoping to hire 60 additional staff members for its Digital Services Act (DSA) enforcement unit, including legal and policy officers, data scientists, and researchers. In its latest report on DSA enforcement costs, the Commission said that it hired 51 staff in 2024, bringing DSA staff to 127. The DSA regulates how digital platforms address objectionable material, imposing the strictest duties on the largest platforms, which are designated as Very Large Online Platforms (VLOPs). DSA enforcement for the VLOPs, of which there are now 25, is led by the Commission. Oversight of the others is led by the member state Digital Services Coordinator where a platform is based. The Commission is currently engaged in DSA investigations of X, Meta’s Facebook and Instagram, TikTok, AliExpress and Temu.
Context – It costs money to regulate. So, when the EU enacted legislation creating permanent regulatory regimes for digital platforms in 2022, they established an ongoing regulatory funding mechanism for the DSA, dubbed it a supervisory fee and modeled it on fee regimes that fund bank regulators. The Commission calculates the fee based on each VLOP’s users and profits. Meta, Google and TikTok have each filed lawsuits in the EU General Court challenging the funding mechanism, with the US-based platforms arguing that basing the contribution on profits imposes disproportionate burdens on a handful of VLOPs while allowing others to avoid paying into the enforcement kitty despite bringing significant regulatory burdens. For example, Amazon, Snap, Pinterest, and X were not charged any fees in 2023 due to reporting no net profits, while Meta and Google reportedly paid almost three-quarters of the total 2023 fees. The EU also enacted the Digital Markets Act (DMA) in 2022. It imposes competition policy regulation on the seven largest digital “gatekeeper” platforms. Unlike the DSA, the DMA has no regulatory funding mechanism. DMA investigations of Apple, Meta, and Google have been underway for more than a year. The German Government has proposed creating a permanent DMA supervisory fee modeled after the DSA version.