With the EU Digital Services Act (DSA) now fully in effect, digital businesses that serve users in the EU face new compliance obligations, including the requirement to appoint a legal representative if they are based outside the EU and lack a local establishment.
So, what happens if you skip this step? The consequences can be serious, legally, financially, and reputationally. Below, we break down the risks of non-compliance and explain why taking action is essential for any digital service provider subject to this obligation in the EU.
Appointment of a legal representative
Under Article 13 of the DSA, non-EU online intermediary service providers that offer services to or target users in the EU must appoint a legal representative within the Union. This representative acts as the primary point of contact for EU regulators and users.
Online service providers must make information about their legal representative easily accessible on their website. They are also required to notify the Digital Services Coordinator (DSC) in the relevant EU Member State of the representative’s name, address, email, and phone number, and keep this information up to date. DSCs are independent authorities responsible for enforcing the DSA and coordinating with other relevant regulators within their jurisdiction.
Enforcement and penalties for non-compliance
The DSA allows for fines of up to 6% of a company’s global annual turnover for violations, including failure to appoint a legal representative when required. Enforcement is coordinated at both the national and EU levels, with support from the DSCs appointed in each Member State. DSCs have the authority to:
- initiate investigations and enforcement proceedings;
- impose financial penalties proportionate to the nature, gravity, and duration of the infringement; and
- monitor how platforms adapt their systems to meet DSA obligations
Failure to appoint a legal representative can lead to additional risks, including:
- Formal investigations: appointing a representative constitutes a breach of the DSA and can trigger regulatory scrutiny and proceedings.
- Difficulty in responding to notices: without a representative, you may be unable to properly respond to regulatory notices, take-down requests, or user complaints, exposing your company to further legal liability.
- Injunctions or service bans: authorities in EU member states can order the online service provider to cease services in the region if they lack a valid EU representative. This “last resort” measure is reserved for services that deliberately ignore their obligations despite prior warnings.
Reputational harm
Legal actions and fines aren’t the only risk. Failing to comply with the DSA can also damage your brand:
- Loss of trust: without a legal point of contact, EU users, partners, and regulators may view your business as evasive or unreliable.
- Negative press: non-compliant platforms may attract media attention or be cited in NGO reports for failing to manage illegal or harmful content.
- Business disruption: EU-based advertisers, marketplaces, and strategic partners may avoid working with non-compliant companies, especially as DSA mandates that legal representative details be published on your website in a clear and accessible location.
Proactive Compliance: A Strategic Investment
Appointing a DSA legal representative is not merely a regulatory checkbox, it’s a smart move to ensure smooth business operations in the EU. With a local point of contact, your company can:
- Respond promptly to official requests;
- Build credibility with regulators and users;
- Avoid legal blind spots and reduce liability exposure.
If you’re offering digital services in the EU but haven’t yet appointed a legal representative, now is the time to act. The cost of non-compliance far outweighs the effort involved in meeting this requirement.
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