No Legal Vacuum: Commission Proposes New Rules for Digital Platforms

These acts aim to establish a wide set of new rules for all digital services, including social media, online marketplaces, and all other online platforms that operate in the EU single market — regardless of whether their registered office is located in or outside of the EU.

The two main objectives of the Digital Services Act package are:

To create a safer online environment for all users of digital services.
To establish fairer and more open digital markets for everyone.

This reform programme will provide Europe with a coherent regulatory framework for the digital economy. Finally, there will be more transparency and clear accountability. It will also promote innovation, investment, and competitiveness — both within the internal market and at a global level. Ultimately, consumers will benefit from new, better, and more reliable online services.

The principal purpose of the DSA is to ensure that fundamental rights (such as privacy or personal data protection) are better respected and protected online. To achieve this purpose, certain measures are implemented to stop manipulation and misinformation.

New rules and obligations will be established for intermediary services (e.g. Internet access providers), hosting services (e.g. cloud services), and online platforms in general (e.g. app stores). The rules for global players that reach more than 10% of the EU’s population will be even stricter.

For example, a provider of digital services should:

Enable consumers to flag illegal goods, services, or content online
Be transparent about algorithms used for recommendations
Help identify and trace sellers of illegal goods

The EU member states and the new European Board for Digital Services will monitor compliance with these rules. As far as the largest platforms are concerned, the Commission will even be able to enforce compliance with the rules in force.

Another significant problem has been detected: some large online platforms act as ‘gatekeepers’ to the EU’s digital single market. They can do so because they have a dominant and stable market position in several EU member states. Far too often, intermediary platforms (such as booking intermediaries or online marketplaces) abuse their market power by using unfair business practices towards smaller businesses. For example, ‘gatekeepers’ tend to prevent consumers from contacting companies directly and outside of their platform, or they misuse data collected from businesses that use their platform. This impairs fair competition and slows down innovation.

In response to this specific issue, the Commission created the DMA. It aims to ensure ‘gatekeepers’ follow certain rules and prohibits them from using unfair business practices. To ensure compliance with these rules, the Commission will conduct regular market investigations. Furthermore, the consequences of noncompliance will include high fines and penalty payments.

The next step in the legislative procedure will be for EU member states to try and find a common position on the DSA and DMA. You can track any progress made on the website of the European Parliament.

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