Luxembourg has adopted the law of 4 April 2025, marking a significant step toward the national implementation of Regulation (EU) 2022/2065 on a Single Market for Digital Services (the Digital Services Act, or DSA).
As a reminder, the DSA is a cornerstone of the European Union's digital strategy and introduces a comprehensive legal framework for digital service providers, aimed at fostering a safer, more transparent online environment across the EU.
This development marks an important milestone in the EU-wide rollout of a unified framework for digital service providers.
Overview of the DSA
The DSA applies to a wide range of online services, including:
- Online platforms (e.g., marketplaces, social media, app stores)
- Hosting services (e.g., cloud and web hosting providers)
- Intermediary services (e.g., internet service providers (ISPs) and domain names system (DNS) services)
Key obligations under the DSA include:
- Mechanisms to detect and remove illegal content
- Transparency in algorithmic systems and advertising
- Enhanced duties of care for very large online platforms (VLOPs) and very large online search engines (VLOSEs). Both qualified as such if they record over 45 million users in the EU a month.
- Stronger protections for users' fundamental rights
- New cooperation mechanisms between national authorities and the European Commission
Luxembourg Implementation: Role of the Competition Authority
Under Article 2 of the law of 4 April 2025, Luxembourg designates the Competition Authority (Autorité de la Concurrence) as the national Digital Services Coordinator. In this capacity, the authority will be empowered to:
- Oversee compliance by digital services established in Luxembourg
- Assist the European Commission in supervising systemic platforms (VLOPs and VLOSEs)
- Act as the national liaison point for cross-border regulatory cooperation
- Enforce transparency and due diligence requirements (including advertising and recommender systems)
- Impose penalties of up to 6% of global annual turnover for DSA breaches
The law further expands the Competition Authority's investigatory powers, including rights to conduct inspections and request information. It also establishes cooperation protocols with other Luxembourg bodies, such as CNPD (Commission nationale pour la protection des données, for data protection), ALIA (Autorité luxembourgeoise indépendante de l'audiovisuel, an audiovisual authority), ILNAS (the Luxembourg Institute for Standardisation, Accreditation, Safety and Quality of Products and Services), and law enforcement.
Key Implications for Businesses
The DSA applies extraterritorially to any provider offering services to users in the EU, regardless of establishment. Affected businesses must prepare for:
- Implementation of robust notice-and-action mechanisms for illegal content
- Verification of third-party traders on online platforms
- Prohibition of targeted advertising to minors
- Transparency reporting obligations and independent audits (for VLOPs and VLOSEs)
- Engagement with trusted flaggers and dispute resolution systems
Noncompliance may result in significant financial penalties, reputational harm, and operational disruptions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
