Digital Regulation in Practice: Navigating the Intersection of the Digital Services Act and the Digital Fairness Act
On Wednesday, 26 March 2025, SME Connect co-organised with Snap Inc an event on “Digital Regulation in Practice: Navigating the Intersection of the Digital Services Act and the Digital Fairness Act”, hosted by Angelika Winzig, Member of the European Parliament, Committee on Industry, Research and Energy, in the European Parliament in Brussels. The panel featured distinguished experts and policymakers including Tomislav Sokol, Member of the European Parliament, Committee on the Internal Market and Consumer Protection; Dóra Dávid, Member of the European Parliament, Committee on the Internal Market and Consumer Protection; Maria-Myrto Kanellopoulou, Head of Unit of JUST B2 Consumer Law, European Commission; Caroline Cauffman, Associate Professor of Private, Competition and Consumer Law at Maastricht University; Jean Gonié, Senior Director EMEA Public Policy at Snap Inc; Amalie Rosenbeck Christiansen, Attaché of Tech and Digital Affairs at Permanent Representation of Denmark to the EU; Urs Buscke, Senior Legal Officer at BEUC – The European Consumer Organisation; and Daniela Werbeniec, Director of the ZPP Digital Forum. The discussion was moderated by Marek Degro, SME Connect Special Advisor for SME Impact Assessment.
In the opening speech, TOMISLAV SOKOL addressed key challenges in implementing the Digital Services Act (DSA) and the Digital Fairness Act (DFA), emphasizing their impact on the European digital market and global relations. He highlighted the EU’s strong regulatory framework but noted ongoing uncertainties and unresolved issues.
He stressed that defining illegal content under the DSA is problematic, as referencing national laws could lead to enforcing the strictest standards across all EU member states, raising legal and political concerns. He also noted that the U.S. has criticized the DSA for potential censorship, underscoring the need for clear implementation.
Regarding the DFA, Mr. Sokol highlighted the issue of dark patterns, citing an EU study that found 97% of popular websites use manipulative design tactics. He stressed the importance of tackling deceptive practices like hidden fees and difficult cancellations while balancing consumer protection with business interests.
He emphasized the need for a level playing field, warning that high compliance costs disproportionately affect small companies. He called for harmonisation between the DSA and DFA to reduce regulatory overlaps and unnecessary bureaucracy.
Mr. Sokol underscored the importance of clear compliance support, particularly for SMEs, and stressed that regulations should encourage innovation rather than impose rigid constraints. He highlighted the need for ongoing dialogue with stakeholders to refine legislative proposals and ensure European businesses remain competitive.
He concluded by stating that future regulations should focus on fairness, clarity, and support for innovation while avoiding unnecessary burdens. He welcomed continued discussions to help shape effective policies.
Following Mr. Sokol’s remarks, DÓRA DÁVID built on his points and emphasised the importance of understanding how regulations affect everyday businesses and individuals. She introduced the legal concept of the “man on the Clapham omnibus” as a way to reflect on who today’s regulations impact – highlighting that SMEs and influencers are now among them.
She stressed that SMEs are the backbone of European competitiveness and should be set up for success, not failure. Given that many small businesses lack dedicated legal experts, she emphasized the need for simplifying regulations and improving compliance support. Raising awareness and ensuring better enforcement, she argued, are just as critical as having a solid legal framework.
Ms. Dávid pointed out that influencer marketing has seen massive growth, with a 700% increase in market value between 2016 and 2021. However, many influencers struggle to navigate legal obligations, leading to potential consumer harm and trust issues. She praised the European Commission’s Influencer Legal Hub as a useful initiative and highlighted a new pilot project in the Internal Market Committee aimed at certifying influencers who complete legal education programs. This could encourage brands to work with certified influencers, benefiting both businesses and consumers.
She further emphasised that any future Digital Fairness Act should focus on addressing legislative gaps rather than duplicating existing laws. In particular, she stressed the need to enhance consumer protection in the digital space, especially for minors. She referenced the Internal Market Committee’s work on online child protection and the challenges posed by certain video game features, acknowledging ongoing enforcement efforts but questioning whether current legal tools are sufficient.
Ms. Dávid concluded by urging policymakers to strike the right balance between regulation and innovation. She underlined the importance of listening to stakeholders and carefully assessing the impact of new obligations on SMEs.
JEAN GONIÉ, representing an online platform, highlighted Snapchat’s extensive reach, with over 850 million monthly active users globally, including more than 90 million in Europe. He emphasized that while Europe may not be Snapchat’s largest market, it remains a significant one, noting that the platform is particularly popular among Generation Z, with 75% of 13 to 34 year olds in over 25 countries engaging with Snapchat regularly.
Snapchat was designed as an antidote to traditional social media, prioritising self-expression over virality and algorithm-driven content. He underscored that this design choice has helped mitigate the spread of misinformation and harmful content. Mr. Gonié stressed the absence of misinformation during recent European and German elections and the fact that Snap hasn’t received any reports during the hate speech code of conduct monitoring rounds since they joined the code it in 2018.
Discussing Snapchat’s role in supporting SMEs, Mr. Gonié emphasized the company’s pioneering efforts in augmented reality (AR). He noted that SMEs leverage AR on the platform to engage with audiences in innovative ways. He also announced the upcoming launch of a dedicated AR center in Paris, aimed at fostering collaboration with European SMEs to advance the AR ecosystem.
Turning to the DSA and DFA, Mr. Gonié reiterated Snapchat’s alignment with the DSA’s goals of ensuring a safer and more transparent online space. He cautioned against the DFA introducing redundant regulations that could create additional compliance burdens. He stressed the importance of regulatory clarity, particularly regarding the protection of minors, and urged policymakers to ensure that new legislation complements, rather than duplicates, existing frameworks. He concluded by reaffirming Snapchat’s commitment to being a trusted partner in Europe.
In the first keynote statement, MARIA-MYRTO KANELLOPOULOU, representing the European Commission’s consumer law unit, stressed the urgent need for the Digital Fairness Act following the Commission’s recent Digital Fairness Fitness Check. While existing consumer protection frameworks remain effective, significant gaps persist, particularly regarding dark patterns, targeted advertising concerns, addictive design, and the protection of minors. The DFA aims to clarify and harmonize regulations to reduce legal uncertainty and enforcement challenges while ensuring a fair digital marketplace. She reassured businesses, particularly SMEs, that the DFA is designed to simplify compliance, reduce administrative burdens, and establish clear, technology-neutral rules. Furthermore, she underscored the complementary nature of the DFA and the Digital Services Act, highlighting the Commission’s intent to avoid regulatory duplication. To shape the DFA effectively, the Commission plans a broad public consultation and impact assessment, ensuring that SMEs’ needs are considered while reinforcing consumer trust in the digital economy.
CAROLINE CAUFFMAN highlighted in her keynote speech the complexities of aligning the upcoming DFA with the existing DSA while avoiding regulatory overlap. She underscored that the DSA has a limited scope, applying only to intermediary service providers and, in particular, medium-sized or larger online platforms. Consequently, many traders operating outside these platforms must instead comply with the Unfair Commercial Practices Directive (UCPD), which governs consumer protection but lacks explicit regulations for various dark patterns. This legal gap creates uncertainty, especially regarding the protection of minors and the regulation of unfair advertising. While some dark patterns – such as misleading urgency tactics or marketing aimed directly at children – are explicitly prohibited under the UCPD, many others require case-by-case evaluation by national courts and consumer authorities, leading to inconsistent enforcement across EU Member States. Furthermore, the UCPD only protects minors’ economic interests, leaving broader concerns about their physical and mental well-being largely to national governments, resulting in a fragmented regulatory landscape. She argued that further harmonization under the DFA is necessary to provide clear, uniform rules that address these gaps, benefiting both consumers and businesses by reducing legal uncertainty. To prevent conflicts, she suggested that the DSA should function as a lex specialis, meaning its rules would take precedence over those in the DFA where applicable.
On top of that, she raised the question of whether the DFA should be integrated into the UCPD, expanding its scope beyond economic interests to include broader consumer protections, particularly for minors. Her insights emphasized the need for a balanced approach that strengthens consumer protection while minimizing regulatory burdens, particularly for SMEs, which currently face challenges navigating diverse national regulations on advertising and consumer rights.
Continuing with interventions, AMALIE ROSENBECK CHRISTIANSEN provided valuable insights from a Danish perspective, emphasising Denmark’s strong commitment to digitalisation and regulatory enforcement. She underscored that both the DSA and the forthcoming DFA are key legislative priorities, particularly in ensuring the protection of minors online. Given that Denmark has prioritised this issue at both the national and EU levels, she highlighted upcoming initiatives, such as the EU-wide inquiry on social media and mental health, as well as the action plan on cyberbullying. She stressed the importance of strong enforcement of the DSA, both at the EU and national levels, and welcomed the forthcoming guidelines, particularly on Article 28 and age verification, which she described as essential to protecting minors in the digital space.
Moreover, she shared insights from Denmark’s national efforts, including the recent expert commission report that recommended banning smartphones in elementary schools, restricting their use until age 13, prohibiting addictive design mechanisms, and implementing robust age verification across digital services. She noted that Denmark’s government is actively considering these recommendations, reflecting the growing political focus on safeguarding children online. Furthermore, she welcomed the upcoming fitness check on digital regulation and the evaluation of the DSA, seeing them as opportunities to refine existing frameworks. She also stressed that while the EU’s regulatory efforts are essential, collaboration with industry and civil society will be crucial in ensuring effective implementation. Moreover, she reiterated that digital competitiveness is another major Danish priority, and balancing innovation with consumer protection will be a key challenge in shaping the DFA.
URS BUSCKE’s intervention focused on key findings from the recently published Consumer Conditions Scoreboard, highlighting the ongoing struggles of consumers, especially in the context of the cost of living crisis. Despite a slowing rate of inflation, a significant portion of consumers (38%) remain concerned about their ability to pay bills, which has led to decreased consumer trust, dropping from 80% in 2020 to 70% in 2022. He highlighted that such a decline in trust is largely driven by unfair commercial practices, particularly dark patterns, which are present on nearly all websites, as well as issues related to influencer marketing and subscription cancellations. These challenges undermine consumer confidence, making it more likely that consumers will stop purchasing non-essential goods or services, which can, in turn, affect the broader economy, as private consumption accounts for more than half of Europe’s GDP.
In addressing these concerns, Mr. Buscke drew attention to the potential of the upcoming DFA to increase legal certainty, particularly around dark patterns. He pointed out the current limitations of both the DSA and the Unfair Commercial Practices Directive (UCPD), which do not fully address all dark pattern practices and leave considerable legal ambiguity. Mr. Buscke also stressed that the DFA could enhance the level playing field by providing clearer rules and reducing fragmentation across the EU, particularly in areas like influencer marketing and subscription management, where national regulations vary. He concluded by noting that the DFA holds significant potential to harmonize standards, address legal uncertainties, and improve consumer trust across the EU’s single market.
DANIELA WERBENIEC accentuated the potential challenges posed by the DFA for SMEs in Poland, while recognising its bold approach in regulating key areas such as data protection and transparency. Representing over 21,000 companies in Poland, she expressed concerns about the added regulatory burden the DFA could impose on SMEs, especially when combined with existing regulations like GDPR, the Digital Markets Act (DMA), the Digital Services Regulation (DSR), and the Consumer Rights Directive. She highlighted that these regulations, in their current form, could increase operational costs for SMEs by as much as 25%, or even 35% for start-ups, potentially stifling growth and innovation. This is particularly concerning given that SMEs generate nearly 50% of Poland’s GDP, making them the backbone of the country’s economy.
Ms. Werbeniec also raised concerns about the EU’s ability to maintain a competitive investment environment, noting that venture capital investment in the EU is significantly lower compared to China and the United States. She referenced the EU Competitive Compass, which underscores the challenges SMEs face in adopting advanced technologies like artificial intelligence, with only 13% of EU enterprises currently utilising AI, even though such technologies are expected to generate the majority of global value in the coming years. She cautioned that the DFA, if not carefully considered, could exacerbate these challenges and further hinder the competitiveness of EU businesses. In conclusion, she called for a balanced approach, urging policymakers to assess the potential negative impacts on SMEs before introducing new regulations that could undermine their growth and innovation.
The continuation of the discussion and the subsequent Q&A session delved into several key concerns regarding the DFA and its potential impacts, particularly for SMEs and the advertising sector. The issue of online advertising emerged as a critical topic, with concerns raised about how new regulations might affect SMEs, particularly those reliant on digital advertising as a revenue source. It was confirmed that unfair advertising practices, including influencer marketing and targeted ads, would be addressed by the DFA, with emphasis placed on ensuring fairness rather than imposing outright bans.
The debate was shifted to the challenges in finding the right balance between consumer protection and fostering a healthy business environment. It was highlighted that while personalised ads might be welcomed by younger consumers, older generations might be more skeptical, underscoring the generational divide in attitudes toward online advertising. The need for transparency was also touched upon, with concerns raised about manipulative practices and the line between helpful and exploitative advertising.
Further contributions from panelists emphasised the need for clear, understandable guidelines to avoid overwhelming SMEs, many of whom were already struggling with the administrative burden of existing regulations. It was agreed that a tailored approach, rather than a one-size-fits-all solution, would be essential for the DFA’s success.
Additionally, the importance of platform design in mitigating risks was raised, suggesting that the DFA could benefit from considering the structural aspects of digital platforms to enhance consumer protection without stifling innovation.
The session was concluded with a call for ongoing collaboration between businesses, consumers, and regulatory bodies, with emphasis placed on the need for clarity and a balanced approach in the development of the DFA. A general agreement was reached that any regulatory framework should focus on creating an environment of trust, not only protecting consumers but also ensuring that businesses can thrive in a fair and transparent digital landscape.