In an era dominated by digital connectivity, online marketplaces, and digital platforms have become the backbone of global commerce. In fact, the total gross merchandise volume (GMV) at the top 100 marketplaces across the globe grew 2.9% in 2022 to $3.2 trillion. Recognizing the need to adapt to the evolving landscape, the European Union, the United Kingdom, and the United States have recently introduced a series of regulations aimed at fostering fair competition, protecting consumers, and ensuring responsible business conduct. In this blog post, we will delve into the Digital Services Act (DSA), Digital Markets Act (DMA), Online Safety Bill (OSB), and the INFORM Consumers Act, exploring their implications for online marketplaces and digital platforms. We will be diving into these regulations in depth with various marketplace and platform leaders at the upcoming Marketplace Risk Global Summit (London, Oct 30 - Nov 1).
The European Union has taken a significant step towards regulating marketplaces and digital platforms with the introduction of the DSA and DMA. The DSA primarily focuses on establishing a comprehensive framework for the responsibilities of digital services, covering issues such as content moderation, transparency, and accountability. Online platforms are required to implement measures to tackle illegal content while safeguarding users' fundamental rights.
Complementing the DSA, the DMA addresses the market power of large online platforms, often referred to as gatekeepers. These gatekeepers are subject to specific obligations, such as providing fair access to their services for smaller businesses and ensuring interoperability. The DMA aims to create a level playing field in the digital market, fostering competition and innovation.
2. Online Safety Bill (OSB) in the United Kingdom
In the United Kingdom, the Online Safety Bill has been passed by parliament to tackle online harms and establish a duty of care for digital platforms. The OSB addresses a wide range of issues, including cyberbullying, misinformation, and harmful content. Platforms that fail to adhere to the outlined standards may face substantial fines, emphasizing the importance of prioritizing user safety.
One notable aspect of the OSB is its focus on user-generated content platforms, which include social media platforms and video-sharing services. The bill requires these platforms to implement measures to protect users from harm, creating a safer digital environment for individuals of all ages.
3. INFORM Consumers Act in the United States
In the United States, the INFORM Consumers Act has been implemented to enhance transparency and protect consumers in online marketplaces. The acronym INFORM stands for Integrity, Notification, and Fairness in Online Retail Marketplaces. This legislation aims to curb the sale of counterfeit products, ensure accurate product information, and establish a fair dispute resolution process.
Under the INFORM Consumers Act, online marketplaces are obligated to verify the identity of high-volume sellers and disclose essential information about the products they offer. This enhances consumer confidence and helps create a trustworthy environment in the increasingly complex world of online commerce.
The regulatory landscape for online marketplaces and digital platforms is undergoing a transformation as governments around the world respond to the challenges posed by the digital age. The DSA, DMA, OSB, and INFORM Consumers Act represent concerted efforts to strike a balance between fostering innovation, protecting consumers, and ensuring fair competition.
As these regulations take effect, businesses operating in the digital realm must adapt and align their practices with the new standards. While these measures bring challenges, they also offer an opportunity for online platforms to build trust, enhance user safety, and contribute to a more sustainable and ethical digital ecosystem. By staying informed and proactive, businesses can navigate this evolving regulatory landscape and thrive in an environment that prioritizes responsibility and accountability.
To learn more about these regulations and how they apply to your marketplace or digital platform, join us at the upcoming Marketplace Risk Global Summit (London, Oct 30 - Nov 1).