German Digital Services Act complements EU Digital Services Act ‒ new rules for online services

The future regulatory regime for online intermediary services is taking shape. On 4 August 2023, the responsible ministry, the Federal Ministry for Digital and Transport, presented the draft for a German Digital Services Act (“G-DSA-Draft”).

The German DSA complements the existing EU legislation of the same name, which is an EU regulation (“DSA”). While the DSA provides for numerous due diligence obligations for providers of online intermediary services and establishes uniform rules for structuring authorities and enforcing providers’ obligations at the EU level, the German DSA defines the authorities’ competences and the procedures applicable in Germany.

Competent authorities

In principle, the Federal Network Agency (Bundesnetzagentur) will be responsible for enforcing the DSA (Section 12 (1) G-DSA-Draft). In addition to regulating traditional infrastructure operators, the Federal Network Agency is thus transforming into a digital authority that supervises the digital economy. This was preceded by a lively public debate in Germany. For example, the State Media Authorities (Landesmedienanstalten) had also brought themselves into the discussion and there was talk of creating a completely new authority for digital regulation. This was rejected, and the Federal Network Agency will now act as the Digital Services Coordinator (DSC) within the meaning of Article 49 et seqq. of the DSA (Sections 1 (4) no. 2 and 14 (1) G-DSA-Draft). The Digital Services Coordinator will serve as the national focal point for the enforcement of the DSA. It will bundle the work of the specific authorities and be endowed with special rights and duties in this regard.

In addition, the draft law provides for special competencies for the Federal Department for the Protection of Children and Young People in the Media (Bundeszentrale für Kinder- und Jugendmedienschutz), the Federal Commissioner for Data Protection and Freedom of Information (Bundesbeauftragte für den Datenschutz und die Informationsfreiheit) and the Federal Criminal Police Office (Bundeskriminalamt) (Sections 12 (2) and (3) and 13 G-DSA-Draft). It is not yet clear whether the State Media Authorities will receive any competencies. There may be constitutional reasons since regulating the media is in principle a matter for the federal states. The draft law does not reach a conclusion on this issue and indicates that it may be necessary to specify additional competent authorities.

Additional provisions and abrogation of the Telemedia Act and the Network Enforcement Act

Article 52 of the DSA requires Member States to provide for rules on effective, proportionate and dissuasive sanctions. The draft law fulfils this requirement by listing 36 DSA-related regulatory offences punishable by a fine in Section 25 (4) G-DSA-Draft. It also provides for fines for breaches of obligations arising directly from the German DSA itself (Section 25 (2) G-DSA-Draft) and for violations of the Platform-to-Business Regulation (Section 25 (3) G-DSA-Draft).

If the provider of an intermediary service is a legal person, fines of up to 6% of its worldwide turnover in the preceding year may be imposed (Section 25 (6) G-DSA-Draft). In addition, the DSA grants the competent authorities operational powers to carry out specific actions such as blocking services. Such actions taken by a Digital Services Coordinator will be immediately enforceable. This is because the draft law excludes the temporary suspension of enforcement in the case of an appeal (Section 29 (1) G-DSA-Draft).

Further, in line with the new European terminology, the draft bill replaces the term “telemedia” with the term “digital services” in all national laws and, in its last section, abrogates both the Telemedia Act (Telemediengesetz) and the Network Enforcement Act (Netzwerkdurchsetzungsgesetz). The subject-matter of those Acts will in the future be fully covered by the DSA and the German DSA. For example, the obligation to provide general information, which was previously regulated in Section 5 Telemedia Act, is now located in Section 5 G-DSA-Draft. The exemption from liability for digital service providers which merely act as conduits in transmitting information will be regulated in Sections 4 et seqq. of the DSA. Only the special provisions in national law related to interferer’s liability (Störerhaftung) and the liability of WLAN operators are continued in Sections 7 and 8 G-DSA-Draft.

Further procedures and entry into force

The draft law is currently the subject of consultations with the federal states and relevant associations and organisations, which can comment on it until 25 August 2023. Once the consultation process has been concluded, the draft law is expected to be adopted by the federal government and then submitted to the parliamentary legislative process. It is likely that besides designating additional authorities as competent authorities, certain details of the draft law will also be modified. The German DSA is scheduled to enter into force on 17 February 2024, just like the DSA.

Outlook

With the presentation of the draft, the future rules governing online intermediary services are further materializing. For very large service providers such as Google and Facebook, the DSA already takes effect as of 25 August 2023. From 17 February 2024, together with the German DSA, the DSA will also apply to many other digital services.

Providers of platforms and, in particular, online marketplaces will soon be subject to a bundle of new obligations, the violation of which will expose them to substantial risks of penalties and damages. As a result, affected companies should, in a timely manner, implement new compliance structures and processes.

Detailed information on the DSA can be found in the book “Das neue Recht der digitalen Dienste” (The New Law of Digital Services), published by Torsten Kraul and edited by Marvin Bartels and Niklas Maamar, among others.