Sledgehammer or scalpel? EU policy makers and industry debate digital regulation

By Francine Cunningham

12-2019

Plans for a new EU Digital Services Act were highlighted during a key note speech by Marcel Boulogne, Head of the European Commission's 'Observatory on the Online Platform Economy', during Bird & Bird's annual Regulatory & Public Affairs seminar in Brussels on 3 December. The forthcoming Commission proposal for a Digital Services Act will aim to update liability and safety rules for digital platforms, services and products, and complete the Digital Single Market.

Mr Boulogne confirmed that the Digital Services Act will most likely include a revision of the e-Commerce Directive, which has been the foundation for all digital services and the development of the Internet over the past 20 years. Among other provisions, the Directive includes liability exemptions and limitations for hosting service providers and specifies that no general monitoring obligations can be imposed by Member States on online intermediaries.

"Digital services have evolved, and so has the scale of their use and online behaviour," said Mr Boulogne. He added: "We need a new set of updated rules that reflect today's technological reality, keep users safe online, while providing simple interfaces with public authorities, and set minimum standards for transparency and accountability of digital services online."

The Observatory Head outlined what he described as significant challenges that the Act will address. Mr Boulogne said: "Firstly, we need online services to bear a set of clear responsibilities and obligations to fight against illegal content online and to protect freedom of expression online. Secondly, we need competent authorities to better cooperate across jurisdictions and in enforcing the law."

Member States are now starting to adopt legislation in this field and the Commission fears that this is fragmenting the single market. Mr Boulogne underlined that this situation creates challenges between large players who can more easily deal with the fragmentation and the approximately 10,000 small online platforms active in the European market.

He commented: "The new regime should help in particular smaller companies scale up and grow, while containing new challenges arising from the very large platforms."

Regarding the much-contested liability exemptions, the Observatory Head stated that Commission services are working under the assumption that "the core principles of a harmonised liability exemption for intermediaries will remain, as an essential foundation of internet regulation."

The Digital Services Act is expected to be a flagship initiative of the new European Commission which began its five-year mandate on 1 December, led by President Ursula von der Leyen. Its substantive details, orientation and eventual timing will be decided by the new College of Commissioners. The Commission services, (under the lead of DG Connect) are now carrying out preparatory work, including fact-finding and evidence gathering. A public consultation is likely to take place in early 2020.

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