Online Platforms in the Crossfire

DSA and DMA

With the Digital Services Act (DSA) and the Digital Markets Act (DMA), the European Union has established a new regulatory framework for digital platforms. Both regulations have largely been in force since the spring of 2024 and aim to strengthen transparency, fairness, and safety in the digital space.

Particularly strict requirements apply to large platforms, while numerous obligations also affect small and medium-sized providers offering online services in the EU.

Global Impact

Initially perceived as purely regulatory initiatives, these EU measures are increasingly gaining geopolitical relevance – particularly amid tensions involving global economic interests and technology conflicts. European digital regulation extends far beyond the EU’s internal market: Due to their extraterritorial reach, the regulations apply to all providers offering digital intermediary services in the EU, irrespective of their location of business (Art. 2 para. 1 DSA, Art. 1 para. 2 DMA).

Regulatory Proceedings and their Geopolitical Dimension

US and Chinese platforms, in particular, are becoming focal points of regulatory attention. Ongoing proceedings illustrate the political sensitivities involved in enforcing the new EU digital laws. Authorities have turned their attention to both Western and Chinese providers.

The platform X (formerly Twitter) is currently under significant pressure. The EU Commission has initiated formal proceedings under the DSA, alleging potential breaches of transparency obligations and insufficient measures to combat illegal content. Additionally, criticized content from the AI chatbot Grok, developed by Elon Musk’s xAI, has recently intensified debates on regulatory action. Media reports suggesting the possibility of a multi-billion euro fine underline the potential severity of measures under the DSA and represent a crucial test of its (political) enforceability against prominent market players.

Whether such an extensive penalty will be imposed and enforced remains uncertain – not least because the EU’s digital regulation is increasingly considered potential leverage in transatlantic tariff negotiations. The current US administration criticizes Europe's approach towards tech giants as a trade barrier, seeking to address this in ongoing discussions regarding tariffs on European products – and the EU Commission has indeed decided to temporarily suspend one ongoing investigation.

Furthermore, Chinese platforms such as TikTok and DeepSeek are under scrutiny. TikTok faces multiple proceedings: under the DSA, primarily addressing risks to minors, and under the DMA, following its designation as a gatekeeper – a status it unsuccessfully challenged before the European General Court. The app from Chinese AI provider DeepSeek also triggered proceedings due to privacy concerns involving data transfers to servers managed by Chinese processors. The Berlin data protection authority classified the app as unlawful under the GDPR and notified Google and Apple under Art. 16 DSA that it considers the app to be illegal content. Now, these platform operators must review the case and determine whether to block or remove the app pursuant to the DSA.

Compliance as a Success Factor

These cases illustrate that enforcement of the DSA and DMA is accelerating – both at European and national levels. Over 1,700 complaints have already been lodged with Germany’s Digital Services Coordinator, the Bundesnetzagentur. A first stress test in January 2025 demonstrated its organizational readiness for the new role as supervisory authority.

Companies operating in the EU should review their compliance structures and implement DSA and DMA requirements. Effective platform compliance systems are crucial – not only to avoid significant fines (up to 6% of global turnover under the DSA and generally up to 20% under the DMA) but also to maintain market positions. In this era when digital regulation is of significant geopolitical relevance, a robust compliance structure can even offer a competitive advantage.

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