Two minutes to understand the new European Digital Services Act

02/11/20
Two minutes to understand the new European Digital Services Act

1.The Digital Services Act: What is it?

With no doubt, “online platforms are now playing a crucial role in our lives, in our economy and in our democracy” (Thierry Breton, commissioner in charge of the internal market). 

 

Yet the legal framework governing digital services is still mainly ruled by the so-called “Electronic Commerce” directive adopted on 8 June 2000, despite the fact that it has been widely criticised for several years now for being outdated and no longer providing an effective response to the new digital challenges and the difficulties posed by the emergence of Web giants, often referred to by the acronym “GAFAM” (Google, Apple, Facebook, Amazon and Microsoft).

 

In this context, the European Commission has officially announced plans to modernise the regulatory landscape for digital platforms. The forthcoming new legislation, called the Digital Services Act, is expected by the end of the year.

 

The Digital Services Act is therefore a very ambitious project that should cover many subjects such as platforms’ liability, the fight against the dissemination of illegal content and against disinformation on the Internet, the ex ante monitoring of the major structuring platforms, the case of self-employed individuals online, online advertising, etc.

 

2. What is the current status of the work on the Digital Services Act?

To shed light on its proposals, the European Commission has first of all carried out, between June and September 2020, an extensive public consultation intended to gather the opinions of stakeholders (government, business, lobbies, etc.) on the future legislation.

 

The public consultation focused on the following two areas:

  • First aspect: digital platforms’ liability towards the content they publish

The above-mentioned “Electronic Commerce” directive established the principle of the limited liability for web hosts who, unlike publishers, are not aware of the content published or transiting via their services.

 

Since they only play a neutral, purely technical and passive role with regard to the content hosted, web hosts can only be held liable if they do not promptly remove content of which they have been made aware that it is manifestly illegal.

 

The “Electronic Commerce” Directive also stipulates that web hosts cannot be held to obligations of generalised monitoring of content.

 

It is this “de-responsibility” of platforms at the heart of the discussions – and obviously of the tensions – on the Digital Services Act.

 

This first part of the consultation addressed the issue of platforms’ legal status and the obligations they may be subject to in terms of moderation of illegal content.

 

  • Second aspect: promoting a healthy and fair competition through stricter supervision of gatekeepers.

This involves the supervision of “structuring” digital platforms which have now become the indispensable gateway for economic and social relations (such as Facebook or Twitter, for example) and which have the potential to prevent new actors from entering the market.

 

Accordingly, the Commission’s declared objective is to redesign the competitive framework for digital services, which could in particular lead to the introduction of specific obligations (e.g. on data sharing with competing companies, interoperability of services, etc.) applicable to certain players only.

 

Many contributors took the opportunity to express their views on this vast European project. Among the most commented contributions, we note, for example, that of Google or Facebook in which these Web giants notably stressed the need to maintain the limited liability of hosting providers.

 

Edima, the main lobby in Brussels for digital platforms, has also adopted a similar position in line with that expressed by Google and Facebook, from which it emerges that the Web giants say they are open to reform, but would like to see the principle of the limited liability of hosting providers maintained, while reiterating the need to put in place clear and balanced procedures for moderation of illegal content.

 

Other point of attention: the identification of platforms that could be qualified as “gatekeepers”, a very detailed issue mentioned in ARCEP’s contribution, providing some examples of criteria and indicators that could help to better target the actors concerned. For its part, Microsoft insists on the fact that the new European legislation should set a high and demanding threshold so that only a few platforms would be subject to more stringent obligations.

 

Alongside this public consultation, several committees of the European Parliament have also been working on own-initiative reports to be sent to the Commission to feed into its proposal for a Digital Services Act (see here, here and here). These reports were voted in a plenary session and adopted by the European Parliament on October 20th, 2020.

 

Some structuring ideas that emerge from these reports are as follows:

  • The need for stricter rules (while respecting fundamental freedoms and in particular freedom of expression and communication) to fight against illegal content online: this should partly lead to the implementation of a binding procedure enabling Internet users to more easily notify intermediaries about potentially illegal content or activities;
  • With respect to harmful content, hate speech and disinformation, this data “should be dealt with by strengthening transparency obligations and helping citizens to become media and digital literate concerning the dissemination of such content”;
  • A better level of consumer protection against illegal, counterfeit and dangerous products is also at the heart of the concerns;
  • The Parliament also wants users to be less dependent on algorithms, which means, among other things, a stricter regulation of the targeted possibility and the possibility to use digital services anonymously whenever technically possible;
  • Here again, the idea is to introduce specific rules for the major platforms, the “gatekeepers” of market access.

Finally, to ensure the effectiveness of the new legislation, MEPs ensure that “all digital service providers established in third countries [will] have to comply with digital legislative package when their services are also intended for EU consumers or users”.

 

3. The next step: the publication in December 2020 of the European Commission’s proposal

The European Commission has now enough food for thought in its proposal, expected by the end of the year. What can we expect?

 

The Financial Times, in particular, has published a first draft of the Digital Service Act, though it has not been made public, and has revealed a few snippets of it.

 

As far as the fight against illegal online content is concerned, Thierry Breton told the Financial Times that there are no plans to go back on the limited liability regime provided for in the “Electronic Commerce” Directive, even though stricter rules in terms of moderation will undoubtedly be envisaged.

 

Several other approaches seem to be on the way, including the obligation for Web giants (“gatekeepers”) to share with competitors the data collected in the course of their services that they would like to use for their own commercial activities.

 

The new legislation could also prevent web giants from advantaging their own services to the detriment of competitors, for example by pre-installing their own applications on devices.

 

However, this is not yet a foregone conclusion, as the text is still at the draft stage: still to be seen is to what extent and in what way the European Commission will take into account the sometimes-antagonistic positions of the various stakeholders.

 

 

4. And what about the United States?

Awareness is not exclusively European: in the United States, too, things are changing, as the American antitrust authorities have opened investigations against Google, Facebook, Apple and Amazon.

 

Lawsuits were launched on  October 20th against Google, accused of abusing its dominant position.

 

This news seems to reflect a growing “mistrust” of the Web giants.

 

A new era for the GAFAMs then? In any case, this is the message that seems to be carried on both sides of the Atlantic.

 

 

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