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European Commission launches consultation on online regulation and new competition tool

Posted on 03 June 2020

On 2 June the European Commission launched a consultation into a Europe-wide Digital Services Act, seeking to upgrade liability and safety rules for digital platforms, services and products, and to ensure that the EU single market for digital services remains competitive and open to innovation. The consultation, which will run until 8 September 2020, covers such issues as safety online, freedom of expression, fairness and a level-playing field in the digital economy.

Companies who have a European presence, or whose products and services are available in European online markets, will especially want to be aware of the consultation, but even those companies who might not have such operations will need to be aware that debates about online harms, liability and competition are concurrently taking place across the globe.

The consultation builds on the two work strands previously announced by the Commission as part of the Digital Services Act package.

Under the first strand, the Commission aims 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".

In furtherance of this aim, the consultation addresses such questions as how to effectively keep users safer online in the context of illegal goods and content, as well as in the context of "harmful" (i.e. not necessarily illegal) activities, and asks for comments and experiences around the flagging and removal of online material (including where material has been removed erroneously). Fundamentally, it raises the question of what responsibilities should be legally required from online platforms and under what conditions.

The second strand addresses the issue of the level playing field in European digital markets. In relation to this strand, the Commission is exploring different possible ways to address market imbalances and 'gatekeeper' platforms, including:

  • Prohibiting or restricting certain unfair trading practices by large online platforms (such as self-preferencing activities).

  • Empowering a competent regulatory body to impose tailor-made remedies, such as platform-specific non-personal data access obligations, specific requirements regarding personal data portability, or interoperability requirements

The Digital Services Act consultation is open to all, but specifically invites submissions from: the general public, digital service providers including online platforms, businesses who reach their consumers online, authorities, NGOs, academics and other concerned parties.

It is also worth noting that on the same day that it launched the Digital Services Act consultation, the Commission also launched a separate second consultation relating to a possible new competition tool. Such a tool would aim to fill gaps in the current EU competition rules and allow for timely and effective intervention against structural competition problems across markets. The Commission decided to run these consultations in parallel to ensure consistency and avoid possible overlaps. The new tools being considered by the Commission include:

  • Allowing the Commission to address competition concerns arising from unilateral conduct by dominant companies before a dominant company successfully forecloses competitors or raises their costs. This could either apply generally across all sectors or be limited to sectors of concern such as digitally enabled markets.
  • Enabling the Commission to impose behavioural and, where appropriate, structural remedies where the internal market is prevented from functioning properly. Unlike the above, this would not be limited to dominant companies. Again, the Commission is considering whether such a tool should operate generally or be targeted at (e.g. digital markets).

 

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