COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT Accompanying the document PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on a Single Market For Digital Services (Digital Services Act) and amending Directive 2000/31/EC
Date: 2020-12-15
Institutions: Directorate-General for Communications Networks, Content and Technology, European Commission
Subjects: Internet, cloud computing, consumer protection, digital single market, digital technology, dissemination of information, information society, provision of services, service

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   EUROPEAN COMMISSION  Brussels, 15.12.2020  SWD(2020) 349 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT  Accompanying the document PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on a Single Market For Digital Services (Digital Services Act) and amending Directive 2000/31/EC {COM(2020) 825 final} - {SEC(2020) 432 final} - {SWD(2020) 348 final}  
 
 
Executive Summary Sheet 
Impact assessment on the Digital Services Act 
A. Need for action 
What is the problem and why is it a problem at EU level?  
Digital services have transformed the EU’s economy and society over the last two decades, in particular 
with  the  emergence  of  online  platforms.  This  initiative  builds  on  the  evaluation  of  the  E-Commerce 
Directive from 2000. The annexed evaluation of the Directive shows that its core principles remain valid, 
but some of its specific rules require an update in light of the specific challenges emerging around online 
intermediaries and online platforms in  particular. Against this  background, the impact  assessment  report 
analyses three core problems and their drivers.  
First, citizens are exposed to increasing risks and harms online – from spread of illegal activities, to risks 
for  their  fundamental  rights  and  other  societal  harms.  These  issues  are  widespread  across  the  online 
ecosystem, but they are most impactful where very large online platforms are concerned, given their reach.  
Second,  the  supervision  of  online  platforms  more  broadly  is  to  a  large  extent  uncoordinated  and 
ineffective  in  the  EU,  despite  the  systemic  importance  of  such  services.  The  limited  administrative 
cooperation  framework  set  by  the  E-Commerce  Directive  for  addressing  cross-border  issues  is 
underspecified and inconsistently used by Member States.  
Third, Member States have started regulating digital services at national level leading to new barriers in 
the  internal  market.  This  leads  to  a  competitive  advantage  for  the  established  very  large  platforms  and 
digital services. 
What should be achieved? 
The general objective is to ensure the proper functioning of the single market, especially the provision of 
cross-border  online  intermediary  services.  Specific  objectives  aim  to  (i)  maintaining  a  safe  online 
environment, (ii) improving conditions for innovative cross-border digital services, (iii) empowering users 
and  protecting  their  fundamental  rights  online,  and  (iv)  establishing  an  effective  supervision  of  digital 
services and cooperation between authorities.  
What is the value added of action at the EU level (subsidiarity)?  
The availability of content and services over the internet is typically transnational. Parallel and divergent 
regulation by individual Member States hampers the provision of intermediary services across the EU and 
is  ineffective  in  ensuring  the  safety  and  protection  of  all  European  citizens.  Action  at  EU  level  would 
reduce  legal  fragmentation  and  compliance  costs,  enhance  legal  certainty,  ensure  equal  protection  for 
citizens and a level playing field for businesses, strengthen the integrity of the single market, and enable 
effective supervision across borders. No Member State can tackle these issues alone. 
B. Solutions 
What are the various options to achieve the objectives?  
Three options were assessed in detail, in addition to the baseline: 
1.  Limited  measures  against  illegal  activities,  laying  down  the  procedural  obligations  for  online 
platforms to tackle illegal activities, in order to protect users’ fundamental rights and ensure transparency. 
Enhanced cooperation mechanisms for authorities to resolve cross-border issues through a digital clearing 
house. 
2. Fully harmonised measures to incentivise actions from service providers, to enhance transparency and 
address  a  wider  set  of  emerging  risks  by  empowering  users.  Enforcement  and  cooperation  mechanism 
reinforced  by  harmonised  conditions  for  administrative  orders  and  the  appointment  of  a  central 
coordinator in each Member State. 
3.  Asymmetric  measures  with  stronger  obligations  for  very  large  online  platforms,  further 
clarifications of the liability regime for online intermediaries and EU governance with reinforced oversight 
and enforcement. This is the preferred option. 
What are different stakeholders' views? Who supports which option?  
Extensive consultation with stakeholders shows a broad consensus for EU action, in particular through a 

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strengthened  EU-wide  framework,  whilst  persevering  the  fundamental  principles  set  out  in  the  E-
Commerce Directive. Overall, there is broad support by online intermediaries, businesses and civil society 
for a harmonisation of notice and action procedures across the EU. Online intermediaries call for a clear 
framework  for  taking  voluntary  measures  against  illegal  content  in  good  faith  with  legal  certainty. 
Transparency measures are also widely supported by businesses and civil society, the latter also focusing 
on  recommender  algorithms.  Some  business  organisations  and  start-ups  call  for  asymmetric  rules. 
Improved  cooperation  between  authorities  in  Member  States,  and  the  importance  of  sharing  data  with 
public authorities is  key  for Member States. Civil society organisations,  as  well as  some businesses and 
national authorities call for EU level oversight.  Three different European Parliament draft own initiative 
reports  on  the  Digital  Services  Act  support  –  when  taken  together  –  an  option  similar  to  the  preferred 
option in the Impact Assessment report. 
C. Impacts of the preferred option 
What are the benefits of the preferred option (if any, otherwise of main ones)?                                     
A positive effect can be expected on the single market and on competition, estimated to lead to a 1-1.8% 
increase of cross-border digital trade. Asymmetric rules will ensure that smaller emerging competitors are 
boosted  helping  competitiveness,  innovation,  and  investment  in  digital  services,  while  targeting  specific 
harms  emerging  through  large  platforms.  Transparency  and  safety  online,  as  well  as  the  protection  of 
fundamental  rights  will  improve.  Enhanced  cooperation  between  Member  States  and  the  EU  level 
governance will improve enforcement, and provide an up-to-date supervisory system for digital services. 
What are the costs of the preferred option (if any, otherwise of main ones)?                                    
Direct  costs  are  proportionate  to  the  size  and  reach  of  a  service  provider.  Services  would  also  incur 
marginal technical design and maintenance costs. Costs related to information requirements will diminish 
compared to the baseline. The most significant costs would be limited to very large online platforms.  
What are the impacts on SMEs and competitiveness?  
Updated  and  uniform  rules  will  help  SMEs  operate  across  the  Single  Market,  helping  scale-ups  and 
innovators. The IA shows cost-savings also for SMEs that might have to deal with illegal content. Micro 
and small enterprises would however not be covered by the obligations imposed on online platforms and 
would also be exempted from extensive reporting obligations.  
Will there be significant impacts on national budgets and administrations?  
We estimate a significant decrease in the costs brought by the inefficiencies of the existing set-up for the 
cooperation  of  authorities.  Various  additional  costs  of  the  enhanced  cooperation  mechanism  would  be 
born at EU level.  
Will there be other significant impacts?  
A core impact of the preferred option is related to safeguarding the rights and interests of consumers and 
businesses and the protection of fundamental rights online.  
Proportionality?  
The preferred option would  meet  the objectives  of the initiative  without exceeding  what is  necessary to 
solve  the  identified  problems.  A  fragmented  approach  across  Member  States  is  unable  to  ensure  an 
appropriate level of protection to citizens across the Union, and the supervision of services would remain 
inconsistent.  
D. Follow up 
When will the policy be reviewed?  
The  establishment  of  a  system  for  data  collection  and  monitoring  is  in  itself  one  of  the  core  impacts 
pursued by the preferred option.  This  includes both  the enhanced ability to  monitor and account  for the 
functioning of the cooperation across Member States’ authorities, and the supervision of digital services. 
The revision should take place within 5 years of the entry into force, but regular reports would be part of 
the design of the supervisory system itself. 

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