In this edition of our ‘DSA decoded’ blog series, we take a look at the out-of-court dispute settlement (ODS) mechanism under the EU Digital Services Act (DSA), how it differs from existing alternative dispute resolution (ADR) mechanisms and the practical challenges that online platforms are facing when complying with the obligation to engage with certified ODS bodies in good faith.
1. The ODS mechanism under the DSA
Content moderation on online platforms is a central regulatory focus of the DSA. For online platform users, Article 21 DSA introduces a novel regime for out-of-court redress against platform moderation decisions that restrict users’ content, account or access to the service. ODS is distinct from the internal complaints mechanism under Article 20 DSA, which allows users to have content moderation decisions reviewed by the online platform itself. Through the new ODS mechanism, users can bring their complaint to a certified external dispute resolution body which must be easily accessible via online means. The ODS body must then review the complaint and any response from the online platform provider and issue a decision within 90 days. In highly complex cases, the decision period may be extended to 180 days.
2. User access to certified ODS bodies
Importantly, the external ODS bodies must meet specific independence, impartiality, expertise and accessibility criteria to obtain certification from the competent Digital Services Coordinator (DSC) in their EU Member State. To date, eight ODS bodies with different areas of expertise and operational languages have been officially certified by DSCs across the EU. The European Commission (Commission) publishes and updates a list of certified ODS bodies (see here). Online platform users can refer their disputes to any certified ODS body of their choosing, as long as their matter falls within the specific area of expertise of the body concerned.
3. How does ODS differ from other ADR mechanisms?
The ODS mechanism builds upon existing ADR mechanisms under EU law but introduces notable distinctions. For example:
- Scope of application: Traditional ADR and mediation mechanisms, e.g., under the Consumer ADR Directive (2013/11/EU) or the P2B Regulation (2019/1150/EU) primarily either address commercial disputes between consumers and traders or online marketplaces and traders. In contrast, Article 21 DSA focuses exclusively on disputes regarding content moderation on online platforms. As content moderation does not only occur in the relationship between platforms and consumers, but also between platforms and business users, the ODS mechanism generally applies to all online platform users (including individuals reporting a violation to the platform).
- Participation by online platforms: While the decisions of ODS bodies are non-binding (and users retain the option to pursue judicial remedies), online platforms are required to engage with the ODS body chosen by the user in good faith with a view to resolving the dispute. What good faith engagement actually means in practice still remains largely unclear. Exceptions to the requirement to engage in ODS do apply, e.g., where the same case has already been decided by the same or another ODS body.
Cost rule: Another major difference is the cost rule according to which ODS under the DSA must be available to users at either no costs or only a nominal fee. Even if the ODS body decides in favour of the online platform, the user must neither pay the procedural fees nor the costs incurred by the provider. As a result, ODS bodies typically charge their fees only to the online platforms, regardless of the outcome of the individual case. Exceptions from this one-sided cost rule apply where the user has manifestly acted in bad faith.
Procedural fees charged by the ODS body must be reasonable and must in any case not exceed the actual costs incurred by the ODS body. It is currently unclear what regulators and courts will consider as “reasonable costs” and how they will position themselves to ODS bodies that are clearly profit-orientated. Given the lack of legal clarity on this point, it seems conceivable to expect legal challenges to invoices issued by ODS bodies to online platform providers, including in court.
4. Practical challenges
ODS poses various practical challenges for online platform providers:
- Uncertainty with emerging mechanism: As the first ODS bodies were only certified in mid-2024, there remain many unknowns in how the ODS process will look in practice as it matures. ODS bodies set their own procedural rules, which are not necessarily tied to any civil litigation procedures implemented by national judicial systems. These procedural rules contain different degrees of detail and tend to differ between bodies. There are many unknowns in how ODS bodies will review and handle procedural and substantive legal questions when faced with questions for the first time. For example, while some ODS bodies (only) review the content moderation decision as to whether the relevant law or platform policy has been correctly applied, others seem to also consider whether the decision was “correct” from a due process and a fundamental rights point of view.
- Operational challenges: Online platforms will also need to set up compliance systems to receive and process ODS complaints from a variety of ODS bodies. This will pose practical challenges like accommodating ODS complaints in different EU languages, reviewing ODS complaints submitted in different formats and including varying levels of detail, and adapting to different technical requirements in communications with the ODS bodies.
- Case volumes: The novelty of ODS creates uncertainty in case volumes. It is still largely unknown how quickly users will begin using ODS at scale and what the flow of cases will be. This leads to challenges with ensuring that online platforms have sufficient workforce to review and process cases in good faith.
5. What online platforms should do
Online platforms are well advised to scope out the legal requirements of ODS and, to extent not yet established, build a system for receiving, reviewing and responding to ODS complaints in compliance with Article 21’s good faith engagement standard. This includes ensuring the availability of appropriate staff to process ODS complaints. The process also needs to be designed with the transparency reporting requirements for ODS under Article 24 DSA in mind, which requires reporting on certain statistics concerning ODS matter processing.
Freshfields has in-depths experience across ODS and similar out-of-court dispute settlement regimes in other digital regulations, such as the DMA, the P2B regulation or the Data Act. We have a multijurisdictional, cross-functional and tech-enabled team of experts able to assist in navigating ODS requirements.
