Translated with DeepL.com
On 27 February, the Cabinet of Ministers approved amendments to the Law on Information Society Services proposed by the Ministry of Economics, which will ensure the implementation of the requirements of the Digital Services Act in Latvia.
As is well known, the Digital Services Act is the first piece of legislation of its kind in the world, which aims to make the online (internet) environment safer, more predictable and more trustworthy for all its users. This will be achieved by imposing new obligations on intermediary service providers in the digital sector to reduce the spread of illegal content online and to mitigate the various social risks posed by very large online platforms and search engines. The Digital Agenda Act defines illegal content as any information that does not comply with European Union or Member State law.
The amendments add a new chapter to the law, which defines the competent authority that will supervise the application of the Digital Service Act and that will act as the Digital Service Coordinator in Latvia, the tasks of the Digital Service Coordinator and cooperation with other authorities, the procedure for the Digital Service Coordinator to exercise his powers, liability for breaches of the Digital Service Act and the procedure for appeals against decisions of the Digital Service Coordinator.
"The launch of the Digital Services Act surveillance is essential for Latvia's interests, given that we are facing a widespread threat of disinformation. PTAC has already been allocated funding for this function, so we need to pass the law without delay so that PTAC can start its monitoring activities. The security aspects of monitoring the online environment are crucial in the context of the European Parliament elections - PTAC, as the digital services coordinator, will monitor trends on online platforms and, if necessary, inform the European Commission about violations on large platforms," said Viktors Valainis, Minister of the Economy.
The amendments to the law provide that the Consumer Rights Protection Centre (PTAC) will be the competent authority and coordinator for digital services in Latvia, which will perform all the tasks assigned to the competent authorities of the Member States by the Digital Services Act, including monitoring how intermediary service providers comply with their obligations under the Digital Services Act. PTAC will be able to request authorities whose functions include supervision or other operational issues (e.g. with expertise) relating to the Digital Services Act to provide an opinion within one month.
PTAC has monitoring and enforcement powers under the Digital Services Act. PTAC will have the power to request information from persons, to carry out on-site inspections without court sanction or other authorisation, and to conduct and record interviews with employees of intermediary service providers. In order to enforce the Digital Services Act, the PTAC will be empowered to adopt a decision obliging the intermediary service provider to bring an infringement of the Digital Services Act to an end, including in the form of an interim decision, and to impose a fine on the persons. The PTC will apply the principle of "advice first" in its actions. The PTAC will also have at its disposal more proportionate means of obtaining voluntary compliance from intermediary service providers, i.e. to call for compliance or to accept a written undertaking.
Baiba Vītoliņa, Director of PTAC: "We are honoured that PTAC has been entrusted with the role of coordinator of digital services in Latvia, with additional resources. We have been monitoring the digital market and e-commerce for many years, but the Digital Services Act opens up a new approach to digital market requirements, platform operations and monitoring. We are aware that there will be many challenges in the monitoring process and that it will require very close cooperation with other authorities involved in monitoring illegal content, both here in Latvia and at a transnational level."
The amended law also establishes liability for breaches of the Digital Services Act:
- A breach of the Digital Services Act can result in a fine of 6% of the annual worldwide turnover of the intermediary service provider in the preceding financial year;
- for failure to provide requested information and to comply with inspections, the intermediary service provider or another person may be fined up to 1% of the annual worldwide turnover in the preceding financial year;
- for non-compliance with PTAC's lawful requests, the intermediary service provider or other person may be subject to a periodic penalty payment of up to 5% of the average daily worldwide turnover or income for the preceding financial year.
In addition, the draft law also provides that persons will be able to appeal against PTAC decisions before the Administrative District Court in accordance with the procedure set out in the Administrative Procedure Law.
As you know, the Digital Services Act (Regulation (EU) 2022/2065 of the European Parliament and of the Council of 19 October 2022 on the single market for digital services and amending Directive 2000/31/EC) entered into force in the Member States of the European Union on 16 November 2022, but will apply from 17 February this year. Latvian website operators must therefore assess whether their service meets the definition and criteria of an intermediary service and what obligations they were subject to in order to be able to guarantee users' rights.
The Digital Services Act requires intermediary service providers to set up a contact point for communication with authorities and users. Transparency obligations are also foreseen, i.e. service providers must provide sufficient information about their services and their operating rules and publish an annual report on how they are meeting their obligations. Hosting service providers, including platform hosts, are required to set up a complaints handling system. It will be easier for users to complain to the hosting provider about illegal content posted by other users. The hosting provider will be obliged to investigate these complaints and, in the event of a decision to delete specific content, to provide an explanation to the content poster and to ensure that the content poster has the right to appeal against the decision.
Platform maintainers, on the other hand, must design their service's functionality and interface to ensure greater user awareness and security. This includes banning so-called "dark patterns", providing more information about the advertisements placed, preventing filter bubbles in search engines and providing more protection for under-age users. Trading platform operators are required to improve consumer protection, i.e. to implement "know your customer" for traders, monitor whether non-compliant goods or services appear on the platform and inform consumers who have bought a particular product or service if it is found to be non-compliant.