Digital Services Act – a consultation on an evolution

Emma Keeling

On 2 June 2020, the European Commission announced that it had launched a public consultation on the much anticipated Digital Services Act package. This package was a fundamental part of the “Shaping Europe’s Digital Future” Communication in February and is a key step to creating a “Europe fit for the Digital Age”.

The consultation covers issues such as safety online, freedom of expression, fairness and a level-playing field in the digital economy and the European Commission’s proposals for the Digital Services Act are expected to be released at the end of 2020.

Two angles of development

The consultation is split into two work streams.

E-commerce

The first stream focuses on the evaluation and revision of the e-Commerce Directive and explores the options for modernising the rules on the role and obligations of EU and non-EU online intermediaries (including online platforms) active in the EU, and related supervision and enforcement mechanisms. The new rules will be complementary to the e-Platform-to-Business Regulation (EU) 2019/1150 that will become applicable from 12 July 2020. The revised rules are expected to affect, amongst others, providers of cloud services, content distribution networks, cloud-based software services, payment providers, data intermediaries and advertisers. The European Commission is considering:

  • introducing liability of online platforms for the content, goods and services they intermediate, and KYC schemes for their commercial users;
  • transparency and accountability requirements (e.g. reporting and independent audit) with regards to algorithmic systems for automated content moderation, online advertising and commercial communications, including micro-targeting aspects, that would go beyond rights and obligations covered by EU data protection law; and
  • sanctions for systemic non-compliance.

Competition

The second consultation stream addresses the digital market imbalances in the EU, which the European Commission considers arise from the dominance of large online platforms. The European Commission is considering expanding existing general rules under the e-Platform-to-Business Regulation (EU) 2019/1150 to all platforms of a certain scale, such as rules on self-preferencing (the way platforms treat their own products and services, compared to those provided by other entities) and on data access transparency. Other options include establishing general regulatory obligations for large online platforms acting as gatekeepers, restricting certain practices and including powers to impose tailor-made remedies against large platforms on a case-by-case-basis.

Our Antitrust law colleagues have published an alert here to explain more on this approach to a digital market level playing field. Not only does the article address the ex ante proposals but it also details the more radical proposal and associated consultation regarding a new competition tool that would itself allow the European Commission to address structural competition problems without finding an infringement to antitrust rules on anti-competitive agreements or abuse of dominance.

The consultation is open until 8 September 2020.

The press release is available here, the public consultation on deepening the internal market and clarifying responsibilities for Digital Services is available here, the consultation on ex ante regulation of very large online platforms acting as gatekeepers here, and the consultation regarding the new competition tool here.