BRUSSELS – Today, global tech trade association 91快活林 reacted to the European Commission’s legislative package to reform fundamental pillars of the internet, the Digital Services Act (DSA) and the Digital Markets Act (DMA):

“As representatives of the world’s leading companies across all the segments of industry, we recognise our shared responsibility to maintain a safe, competitive, and innovative online environment,” said Guido Lobrano, 91快活林’s Vice President of Policy and Director General for Europe. “All relevant stakeholders need to work together towards these goals. While 91快活林 and its members will develop detailed views on the legislative proposals in the coming weeks, we support the Commission’s effort to safeguard citizens from illegal content online and will continue to advocate for rules that maintain a well-functioning, competitive online ecosystem. We look forward to discussing these and further aspects of today’s proposals with the European institutions in the coming weeks. We are committed to serving as a useful resource to all stakeholders involved in the process.”

“The DSA is an opportunity to enhance collaboration among all stakeholders in the online ecosystem through workable mechanisms,” continued Lobrano. “The initiative underscores our focus on enhancing legal certainty, clarifying roles, and defining responsibilities for actors in the online context. With respect to the DMA, 91快活林 and our members stand ready to support the Commission in its endeavor to find proportionate policy tools to guarantee a consistent approach and fair competition in Europe. We fully support the goal of ensuring market access for innovative challengers, safeguarding consumer welfare and economic efficiency, but believe the Commission’s proposal would benefit from further focus on a company’s conduct and its interaction with users, rather than the size of a particular player, like revenues, users or the number of services it offers.”

While still reviewing the full text, 91快活林’s initial analysis of the two proposals is below:

DSA

91快活林 welcomes the Commission’s maintained commitment to a limited liability regime for online platforms as a pillar for innovation in Europe. 91快活林 also supports the EU’s efforts to safeguard citizens from illegal content online and maintain a well-functioning, competitive online ecosystem by clearly differentiating between illegal and harmful content and proposing legislative action only for illegal content while continuing to address harmful content through self- and co-regulatory approaches. 91快活林 particularly supports provisions clarifying that voluntary measures to detect illegal content do not exclude intermediaries from liability exemptions (Article 6) and welcomes the continued commitment to avoid general monitoring obligations (Article 7).

91快活林 also highlights the following key provisions in the DSA:

  • Trusted flagger or know-your-customer schemes: The Commission’s consideration of new, innovative tools and ways of collaboration between relevant stakeholders including trusted flagger or know-your-customer schemes to help fight illegal content online is welcome; but it is important to note that these are complex issues that require further consideration.
  • European Board for Digital Services: A single EU-wide coordinated oversight model gathering national Digital Services Coordinators can enhance legal certainty through consistent application of the Regulation. Still, 91快活林 believes the Board should also play an important role in providing guidance and help companies take reasonable, feasible, and proportionate measures.
  • Additional obligations for very large platforms: 91快活林 notes the asymmetric approach singling out certain platforms based solely on their size (number of users) and subjecting them to differentiated obligations. The criteria to determine the active users of a very large online platform should be defined in the law and not be deferred to delegated acts by the European Commission. More importantly, a careful and balanced approach is needed to ensure any new obligations targeting only certain “selected” platform are not unduly discriminatory. In this context, 91快活林 appreciates the Commission’s commitment that any risk-mitigation measures must not only be effective but also reasonable and proportionate.
  • Enforcement: 91快活林 agrees with the need for effective enforcement, the proposed level of fines seems disproportionate to the type of violations. In addition, given the seriousness of the sanctions, the companies concerned should be provided with the possibility to contest the Commission decision before a penalty is imposed.

DMA

91快活林 underscores that there should be no negative implication attached by default to companies designated as gatekeeper under the DMA criteria, and does not believe it is appropriate for legislation to label the designated companies with an inherently negative definition as “gatekeeper.” This designation is only a prerequisite to attach more stringent obligations to platforms that play a systemic role in a market. Talking about a “provider of core platform services” would be, for example, more appropriate.

91快活林 also highlights the following key provisions in the DMA:

  • Rigorous, objective process for the identification of a so-called gatekeeper: It is crucial that the process of designation of gatekeepers is conducted on the basis of objective criteria. It is also very important that these criteria are not designed to lead to define certain companies by default; or on the other hand, to exclude a priori certain companies. It is not clear as to how turnover may be an indicator of significant impact, while relevant criteria like market shares are not taken into account.
  • Tailored application: It is important for that the application of gatekeeper designation remains precise in scope and only applies to a specific market or service, not to an entire corporation. This is not clear from the proposals.
  • Due process: 91快活林 appreciates the possibility for a company that is designated as a gatekeeper to challenge that decision, either on the merits or for example if relevant market circumstances have changed. It is important that this process is smooth and effective.
  • Assessing a platform’s user base: When it comes to assessing a platform’s user base as a criterion to define gatekeepers, having an unequivocable definition of what constitutes a user is key. As is also the case for the DSA, the criteria to determine the active users of a very large online platform should be defined in the law and not be deferred to delegated acts by the European Commission.
  • Conduct justifications: As regards the list of obligations in article 5, a business should always have the possibility to justify its conduct based on efficiency or objective justifications, for example protecting the security or integrity of the platform.