Europe asks for views on platform governance and competition tools

Natasha Lomas

The European Commission is asking for views on how online platforms should be regulated in future, launching a public consultation today on the forthcoming Digital Services Act (DSA).

This pan-EU legislative proposal, due before the end of the year, is slated to rework the regional rule book for digital services, including tackling controversial issues such as liability for user-generated content and online disinformation.

Modernising and updating rules related to e-commerce and online marketplaces to foster competition by ensuring a level playing field in digital markets is another stated aim. 

Whether the DSA will prove as divisive as the EU's copyright reform remains to be seen -- but the stakes are high indeed.  

In parallel today, the Commission is soliciting views on possible updates to pan-EU competition regulation, asking whether a new tool is needed to beef up enforcement powers in the digital era.

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The DSA consultation, which runs until September 8, covers issues including safety online, freedom of expression, fairness and a level playing field in the digital economy, per the Commission, which says it's seeking input from people, businesses, online platforms, academics, civil society and "all interested parties" to shape the planned governance framework for digital services.

Of course it's already heard plenty on this topic from tech giant lobbyists.

Facebook CEO Mark Zuckerberg even sat down for a live-streamed discussion alongside European commissioner Thierry Breton last month -- only to be lectured on the need for digital giants to pay their fair share of taxes.

But the Commission wants businesses of all stripes and sizes to chip into the consultation. After all, the most dominant platforms have the most to lose from any change of pan-EU rules.

And perhaps especially from changes that result in defining a specific set of "responsibilities" for the largest platforms.

Commenting in a statement, Commission EVP Margrethe Vestager said: The Internet presents citizens and businesses with great opportunities, which they balance against risks that come with working and interacting online. At this time, we are asking for the views of interested citizens and stakeholders on how to make a modern regulatory framework for digital services and online platforms in the EU. Many of these questions impact the day-to-day lives of citizens and we are committing to build a safe and innovative digital future with purpose for them.”

“Online platforms have taken a central role in our life, our economy and our democracy. With such a role comes greater responsibility, but this can happen only against the backdrop of a modern rulebook for digital services," said Breton in another statement. "We will listen to all views and reflect together to find the right balance between a safe Internet for all, protecting freedom of expression and ensuring space to innovate in the EU single market."

The DSA package will contain a number of strands, with one set of rules focused on updating the EU's existing eCommerce Directive -- which dates back two decades at this point.

"Building on these principles, we aim to establish clearer and modern rules concerning the role and obligations of online intermediaries, including non-EU ones active in the EU, as well as a more effective governance system to ensure that such rules are correctly enforced across the EU single Market while guaranteeing the respect of fundamental rights," the Commission said today.

A second component is aimed at ensuring fairness in European digital markets, which have become dominated by a few large online platforms that act as gatekeepers.

EU institutions have already adopted one legislative measure aimed at platform marketplace fairness -- due to come into force next month. But the Commission believes more is needed and is now exploring building on that foundation with additional rules to foster competition -- potentially around (non-personal) data sharing.

"We will explore rules to address these market imbalances, to ensure that consumers have the widest choice and that the EU single market for digital services remains competitive and open to innovation. This could be through additional general rules for all platforms of a certain scale, such as rules on self-preferencing, and/or through tailored regulatory obligations for specific gatekeepers, such as non-personal data access obligations, specific requirements regarding personal data portability, or interoperability requirements," it said today.

The consultation is also asking for views on other "emergent" issues related to online platforms -- including working conditions for platform workers who are providing a service via these marketplaces.

Gig economy platforms continue to face legal challenges in Europe over their classification of platform workers as "self employed," a status that reduces the benefits they are entitled to as a result of their labor.

On competition policy, the Commission has today published an inception impact assessment and opened up another public consultation -- inviting comments on whether EU regulators need a new competition tool to allow them to address structural competition problems in a timely and effective manner.

The pace of competition enforcement versus the speed of internet-enabled disruption has led to criticism that current remedies applied to problematic digital business practices come far too late to be effective.

Commenting on this in another supporting statement, Vestager, who also heads up EU competition policy, said: “The world is changing fast and it is important that the competition rules are fit for that change. Our rules have an inbuilt flexibility which allows us to deal with a broad range of anti-competitive conduct across markets. We see, however, that there are certain structural risks for competition, such as tipping markets, which are not addressed by the current rules. We are seeking the views of stakeholders to explore the need for a possible new competition tool that would allow addressing such structural competition problems, in a timely and effective manner ensuring fair and competitive markets across the economy.”

The Commission says it has concluded that ensuring the "contestability" and "fair functioning" of markets is likely to require a "holistic and comprehensive approach" -- emphasizing that this should involve continued vigorous enforcement of existing EU rules (including the use of so-called "interim measures," where appropriate; an old tool Vestager has recently dusted off and unboxed).

But -- additionally -- it's considering supplementing existing antitrust rules with ex-ante regulation of digital platforms ("including additional requirements for those that play a gatekeeper role"); and the aforementioned possible new competition tool for dealing with structural competition problems that have proven tricky to tackle with current measures (such as preventing markets from tipping).

"The new competition tool should enable the Commission to address gaps in the current competition rules and to intervene against structural competition problems across markets in a timely and effective manner," it writes.

"After establishing a structural competition problem through a rigorous market investigation during which rights of defence are fully respected, the new tool should allow the Commission to impose behavioural and where appropriate, structural remedies. However, there would be no finding of an infringement, nor would any fines be imposed on the market participants."

Stakeholders have until June 30 to submit views on the Commission's inception impact assessment, while the public consultation on the potential new competition tool is taking submissions until September 8.

Subject to the outcome of the impact assessment the Commission adds that a legislative proposal is scheduled for Q4.

Interestingly, for Commission watchers, the consultation on the possibility of ex-ante regulation of digital platforms -- which is clearly forming part of Vestager's thinking on ensuring functionally competitive markets, given it's included in the competition reform discussion -- has not been included in the competition consultation -- but rather slotted into the DSA consultation, which is being led by Breton.

The two commissioners not only have very different personal styles but appear opposed on policy substance, with Vestager being comfortable voicing support for regulating digital technologies while Breton continues to express reluctance to do so, preferring to court industry engagement -- and couching regulation as a last, unwelcome resort.

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