Debbie Heywood

Senior Counsel – Knowledge

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Debbie Heywood

Senior Counsel – Knowledge

Read More

16 November 2020

Radar - November 2020 – 3 of 3 Insights

EC set to tackle regulating the digital environment

  • Quick read

What's the issue?

The EU looks set to focus on regulating the online environment next year, tackling the issues of online harms, competition, data and consumer protection, and tax.

What's the development?

The European Parliament has adopted legislative initiative resolutions for the planned Digital Services Act, and the Commission has set out its Work Programme for the coming year.

European Parliament adopts DSA legislative initiative resolutions

The European Parliament adopted two legislative Resolutions setting out its recommendations for issues to be included in the Commission's Digital Services Act. These include:

  • foreign service providers to be required to adhere to EU rules where their services are aimed at EU consumers or users in the EU
  • a binding 'notice and action' mechanism to help intermediaries identify potentially illegal online content or activities
  • a strict distinction to be made between illegal and harmful content with the liability regime to focus only on the former
  • platforms should not use upload filters or any form of ex-ante content control for harmful or illegal content. The final decision about whether or not content is legal should always be taken by an independent judiciary and not private undertakings
  • harmful content, hate speech and disinformation should be dealt with through enhanced transparency obligations and a digital literacy campaign
  • consumer protection, user safety and following the principle that anything illegal offline is also illegal online should be guiding principles of the DSA
  • platforms and online intermediation services need to get better at detecting and taking down false claims and tackling rogue traders. A 'know your business customer' principle should be introduced to require platforms to check and stop fraudulent companies using their services to sell illegal and unsafe products and content
  • specific rules are needed to prevent (rather than merely remedy) market failures and to open up markets to new entrants
  • users should be given more control over what they see online, including being able to opt out of content curation and making them less dependent on algorithms
  • targeted advertising should be regulated more strictly in favour of less intrusive contextualised forms of advertising that require less data and do not depend on previous user interaction with content
  • The Commission should further assess options for regulating targeted advertising, including a phase-out leading to a ban
  • anonymous use of digital services should be a right
  • The Commission should assess options for an enforcement regime to include a regulator and penalties.

The EP also adopted a non-legislative resolution by the Civil Liberties Committee which focuses on fundamental rights, calling for content removal to be "diligent, proportionate and non-discriminatory" and for the protection of freedom of expression and information as well as privacy and data protection, and asking for transparency on the monetisation policies of online platforms.

The Commission has reportedly put out for tender an information gathering contract to look at the adtech industry and its impact on privacy and the economy. It will consider whether publishers need behavioural ads given the bulk of the revenue goes to Google and Facebook. Reports from the New York Times and the Dutch public service broadcaster suggest there was no drop in advertising revenue when it ceased to be targeted.

EC 2021 Work Programme

The European Commission has published its 2021 work programme. Initiatives of interest include:

  • following the principles of right to privacy and connectivity, freedom of speech, free flow of data and cybersecurity
  • legislation covering safety, liability, fundamental rights and data aspects of AI
  • a Data Act to set conditions for better control of data and data sharing for citizens and businesses
  • a new EU digital identity to make it easier to do tasks and access online services across Europe
  • working towards an international agreement on a fair tax system but, failing this, proposing a digital levy in the first half of 2021
  • legislating to level the playing field regarding foreign subsidy
  • a review of competition rules
  • a new industrial strategy for Europe to take account of the impact of COVID-19
  • a legislative proposal to improve the working conditions of people providing services through platforms
  • swift action on the Cybersecurity Centre Regulation and the ePrivacy Regulation
  • a review of the Database Directive as part of the data package
  • a legislative initiative for new design requirements and consumer rights for electronic products.

What does this mean for you?

The Commission has set an ambitious agenda for next year. Questions around the dominance of certain platforms, how to tax digital businesses and how to regulate harmful as well as unlawful online behaviour are extremely challenging and unlikely to have clearcut solutions. Whatever the EU decides in this area is likely to have an impact in the UK which is considering the same issues. Whether this will be because the UK's approach ultimately diverges from the EU's or because it reflects it, remains to be seen.

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