Hanover

4 Nov 2020

A flagship initiative to regulate online platforms and services, the Digital Services Act (DSA) is set to be released in little over a month, and stakeholders have started gearing up for the “expected-to-be-hottest-debate” of this legislative term in Brussels’ digital scene.  

We organised a virtual session at the end of last month to take a deep dive into the DSA and what to expect from the upcoming rulebook for the platform economy. In this webinar, we brought together stakeholders and a key policy-maker, Werner Stengg, Cabinet Member of the Executive Vice President Margrethe Vestager, to exchange views on this topic.

The plan is ambitious, not only will the Commission aim at reforming parts of the 2000 eCommerce Directive (ECD) with the DSA, but it will also seek to introduce ex ante regulation competition and a new competition tool with a separate proposal known as the Digital Markets Act (DMA) 

While the DSA will look into platform accountability, content moderation, enhanced transparency requirements, and appropriate enforcement measures, the DMA will focus on digital markets and ways to ensure these remain competitive and contestable. The question is: how will this be achieved? 

The DSA will not target platforms per se, but rather activities and behaviours (regardless of whether it is a digital platform or not putting it in place). It will not even drastically amend the core principles of the ECD and, in particular, the existing and highly disputed liability framework. Nonetheless, the Commission will aim at further clarifying it. Among others, the new initiative will encourage platforms to act (more) responsibly, allowing them to use relevant technologies (or similar) to act proactively without risking losing their liability exemption – But will a “Good Samaritan clause” be used as a safe harbour? The Commission certainly does not think nor wish so. In the fight against illegal content – note that the Commission will refrain from determining what is legal or illegal with updated definitions – the interpretation of illegal content will be based on the definitions under EU and possibly national law.  

It is due diligence that will be key. If not strengthened liability, what is foreseen is the introduction of a harmonised noticeandtakedown mechanism, as well as of a new Know Your Business Customer principle. Noncompliance may be subject to sanctions and systemic failure will be penalised.  

Despite being widely debated, the DSA does not raise the same level of ‘suspense’ and does not prove to be as controversial as the DMA. Confusion and concern was initially sparked among stakeholders on the Commission’s (blurred?) intentions. However, some clarity has now been shed and the Commission promises that potential overlaps will be prevented. The DMA will embed two instruments that were originally announced to be separate, notably a flexible ex-ante regulatory framework for platforms acting as gatekeepers and a New Competition Tool (NCT) for market investigations, aimed at addressing structural competition problems. The DMA will address issues related to market power of big platforms’ without naming and listing them, but by outlining the criteria to identify gatekeepers (i.e., cumulative power, economic activity, locking-in practices). The criteria will be evolutive in their nature to avoid stigmatisation of gatekeeper platforms and will be accompanied by a ‘black’ list of ‘dos and don’ts’, a potential grey list too 

Despite early fears that the DMA, and the NCT, could target the whole economy (e.g., not only digital markets), it has now been confirmed that the intervention is limited to market failure in the digital markets and not beyond. Different options are under review by the Commission, but we can expect data sharing and interoperability to be targeted. 

The Commission has ambitious plans, which are currently being fine-tuned, guided by the ultimate goals of allowing for the well-functioning of the Digital Single Market, restoring trust in the digital economy, and ensuring the rules are better enforced in a marketfriendly manner 

The details are yet to be disclosed but, rest assured, we will hear more of this for quite some time!