EUROPEAN COMMISSION PROPOSES NEW REGULATIONS FOR DIGITAL MARKET
Authors: Mgr. Michal Nulíček, LL.M., Mgr. et Mgr. Ing. Jan Tomíšek, CIPP/E, Mgr. David Sláma
The European Commission has presented an ambitious new proposal for two regulations aimed at introducing new rules for the digital market: the Digital Services Act (“DSA”) and the Digital Markets Act (“DMA”), which can be considered a major step towards updating the rules of the European digital market following the adoption of the so-called e-Commerce Directive 2000/31/ES 20 years ago.
The DSA will cascade to intermediary services (ISPs, domain registrars), which in turn include hosting services, from whom further obligations will be passed to online platforms (stores, social networks), and, finally, to large platforms (with more than 45 million users).
The aim is to set clear rules for the protection of consumers and their fundamental rights online, to establish a clear framework for transparency and accountability for online platforms and to foster innovations and competitiveness within the online market.
The rules and obligations under the DSA include:
- measures to combat illegal goods, services and content online;
- measures to protect users, including the possibility of challenging platforms’ content moderation decisions;
- obligations for large platforms to prevent the misuse of their systems by taking risk prevention measures and by independent audits;
- structure of supervision: EU states will have a leading role, with support from the new body composed of national digital services coordinators with special authority given by the Commission to supervise very large platforms, as well as a direct authority to penalize them;
- facilitated access for researchers to key data of the platform.
The DMA is supposed to regulate large online platforms, so-called “gatekeepers”, in order to ensure fair competition, which should also be beneficial for users. The regulation plans to achieve that by means of a system of obligations, such as:
- to allow third parties to inter-operate with large platforms;
- to provide business partners of large platforms with access to data generated by their use of the platform;
- to give advertisers access to information and tools for the evaluation of ads on those platforms;
- to enable business partners to promote their products and serve their customers outside the platform;
and prohibitions, such as:
- prohibition of self-preferencing, i.e. treating the products and services offered by the gatekeeper more favorably than similar services or products offered by third parties on the platform;
- prohibition of preventing consumers from interacting with gatekeeper’s business partners outside their platforms;
- prohibition of preventing users from un-installing any pre-installed software and applications.
As part of the enforcement of obligations, in case of non-compliance, a penalty amounting to 10% of worldwide annual turnover can be imposed on companies.
The proposals are now awaiting discussion in the European Parliament and in the EU member states. Once adopted, the regulations will be binding on all EU states.
We will keep you informed of the details of the DSA and DSM regulations and further developments.