EU

From February 17, 2024, the Digital Services Act (“DSA”) will apply to providers of intermediary services (e.g., cloud services, file-sharing services, search engines, social networks and online marketplaces). These entities will be required to comply with a number of obligations, including implementing notice-and-action mechanisms, complying with detailed rules on terms and conditions, and publishing transparency reports on content moderation practices, among others. For more information on the DSA, see our previous blog posts here and here.

As part of its powers conferred under the DSA, the European Commission is empowered to adopt delegated and implementing acts* on certain aspects of implementation and enforcement of the DSA. In 2023, the Commission adopted one delegated act on supervisory fees to be paid by very large online platforms and very large online search engines (“VLOPs” and “VLOSEs” respectively), and one implementing act on procedural matters relating to the Commission’s enforcement powers. The Commission has proposed several other delegated and implementing acts, which we set out below. The consultation period for these draft acts have now passed, and we anticipate that they will be adopted in the coming months.

Pending Delegated Acts

  • Draft Delegated Act on Conducting Independent Audits. This draft delegated act defines the steps that designated VLOPs and VLOSEs will need to follow to verify the independence of the auditors, particularly setting the rules for the procedures, methodology and templates used. According to the draft delegated act, designated VLOPS and VLOSEs should be subject to their first audit at the latest 16 months after their designation. The consultation period for this draft delegated act ended on June 2, 2023.
  • Draft Delegated Act on Data Access for Research. This draft delegated act specifies the conditions under which vetted researchers may access data from VLOPs and VLOSEs. The consultation period for this draft delegated act ended on May 31, 2023.

Continue Reading Draft Delegated and Implementing Acts Pursuant to the Digital Services Act

In the early hours of December 14, 2023, the Council of the EU (“Council”) and the European Parliament (“Parliament”) reached a provisional political agreement on the Corporate Sustainability Due Diligence Directive (“CSDDD”). Described as a “historic breakthrough” by Lara Wolters, who has led this file for the Parliament, the CSDDD will require many companies in the EU and beyond to conduct environmental and human rights due diligence on their global operations and value chain, and oblige them to adopt a transition plan for climate change mitigation.

Given the CSDDD’s relevance for companies’ ongoing compliance planning on environmental and human rights matters, this blog aims to advise clients on the basic elements of the CSDDD agreement based on press releases from the CouncilParliament, and the European Commission (“Commission”), even if much uncertainty remains. Although a political agreement has been reached, the text of the agreement is not publicly available and a number of details of the legal text will need to be finalized in follow-up technical meetings. Covington will publish a more detailed alert on “how to prepare” for the CSDDD once the full text is available (likely in early 2024).

In Short

After intense negotiations since the Commission published its proposal in February 2022, the Directive is set to lay down significant due diligence obligations for large companies regarding actual and potential adverse impacts on human rights and the environment, with respect to their own operations, those of their subsidiaries, and those carried out by their business partners.Continue Reading Provisional Agreement on the EU’s Corporate Sustainability Due Diligence Directive (CSDDD): Key Elements of the Deal

On 31 May 2023, at the close of the fourth meeting of the US-EU Trade & Tech Council (“TTC”), Margrethe Vestager – the European Union’s Executive Vice President, responsible for competition and digital strategy – announced that the EU and US are working together to develop a voluntary AI Code of Conduct in advance of

Companies doing business in Eastern Europe are likely to face an uncertain political climate in the near future.  Part of this is the fallout from the Russian Ukraine controversy.  Another factor is the residual effects of the 2008 economic collapse and the inability of economies to recover.  A third is political growing pains accompanying the