The Commission has proposed today an ambitious reform of the digital space, a comprehensive set of new rules for all digital services, including social media, online market places, and other online platforms that operate in the European Union: the Digital Services Act and the Digital Markets Act.
European values are at the heart of both proposals. The new rules
will better protect consumers and their fundamental rights online, and
will lead to fairer and more open digital markets for everyone. A modern
rulebook across the single market will foster innovation, growth and
competitiveness and will provide users with new, better and reliable
online services. It will also support the scaling up of smaller
platforms, small and medium-sized enterprises, and start-ups, providing
them with easy access to customers across the whole single market while
lowering compliance costs. Furthermore, the new rules will prohibit
unfair conditions imposed by online platforms that have become or are
expected to become gatekeepers to the single market. The two proposals
are at the core of the Commission's ambition to make this Europe's
Digital Decade.
Margrethe Vestager, Executive Vice-President for a Europe fit for the Digital Age, said: “The
two proposals serve one purpose: to make sure that we, as users, have
access to a wide choice of safe products and services online. And that
businesses operating in Europe can freely and fairly compete online just
as they do offline. This is one world. We should be able to do our
shopping in a safe manner and trust the news we read. Because what is
illegal offline is equally illegal online.”
Commissioner for Internal Market Thierry Breton said: “Many
online platforms have come to play a central role in the lives of our
citizens and businesses, and even our society and democracy at large.
With today's proposals, we are organising our digital space for the next
decades. With harmonised rules, ex ante obligations, better oversight,
speedy enforcement, and deterrent sanctions, we will ensure that anyone
offering and using digital services in Europe benefits from security,
trust, innovation and business opportunities.”
Digital Services Act
The landscape of digital services is significantly different today
from 20 years ago, when the eCommerce Directive was adopted. Online
intermediaries have become vital players in the digital transformation.
Online platforms in particular have created significant benefits for
consumers and innovation, have facilitated cross-border trading within
and outside the Union, as well as opened up new opportunities to a
variety of European businesses and traders. At the same time, they can
be used as a vehicle for disseminating illegal content, or selling
illegal goods or services online. Some very large players have emerged
as quasi-public spaces for information sharing and online trade. They
have become systemic in nature and pose particular risks for users'
rights, information flows and public participation.
Under the Digital Services Act, binding EU-wide obligations will
apply to all digital services that connect consumers to goods, services,
or content, including new procedures for faster removal of illegal
content as well as comprehensive protection for users' fundamental
rights online. The new framework will rebalance the rights and
responsibilities of users, intermediary platforms, and public
authorities and is based on European values - including the respect of
human rights, freedom, democracy, equality and the rule of law. The
proposal complements the European Democracy Action Plan aiming at making democracies more resilient.
Concretely, the Digital Services Act will introduce a series of new,
harmonised EU-wide obligations for digital services, carefully graduated
on the basis of those services' size and impact, such as:
- Rules for the removal of illegal goods, services or content online;
- Safeguards for users whose content has been erroneously deleted by platforms;
- New obligations for very large platforms to take risk-based action to prevent abuse of their systems;
- Wide-ranging transparency measures, including on online advertising and on the algorithms used to recommend content to users;
- New powers to scrutinize how platforms work, including by facilitating access by researchers to key platform data;
- New rules on traceability of business users in online market places, to help track down sellers of illegal goods or services;
- An innovative cooperation process among public authorities to ensure effective enforcement across the single market.
Platforms that reach more than 10% of the EU's population (45 million
users) are considered systemic in nature, and are subject not only to
specific obligations to control their own risks, but also to a new
oversight structure. This new accountability framework will be comprised
of a board of national Digital Services Coordinators, with special
powers for the Commission in supervising very large platforms including
the ability to sanction them directly.
Digital Markets Act
The Digital Markets Act addresses the negative consequences arising
from certain behaviours by platforms acting as digital “gatekeepers” to
the single market. These are platforms that have a significant impact on
the internal market, serve as an important gateway for business users
to reach their customers, and which enjoy, or will foreseeably enjoy, an
entrenched and durable position. This can grant them the power to act
as private rule-makers and to function as bottlenecks between businesses
and consumers. Sometimes, such companies have control over entire
platform ecosystems. When a gatekeeper engages in unfair business
practices, it can prevent or slow down valuable and innovative services
of its business users and competitors from reaching the consumer.
Examples of these practices include the unfair use of data from
businesses operating on these platforms, or situations where users are
locked in to a particular service and have limited options for switching
to another one.
The Digital Markets Act builds on the horizontal Platform to Business Regulation, on the findings of the EU Observatory on the Online Platform Economy,
and on the Commission's extensive experience in dealing with online
markets through competition law enforcement. In particular, it sets out
harmonised rules defining and prohibiting those unfair practices by
gatekeepers and providing an enforcement mechanism based on market
investigations. The same mechanism will ensure that the obligations set
out in the regulation are kept up-to-date in the constantly evolving
digital reality.
Concretely, the Digital Markets Act will:
- Apply only to major providers of the core platform services most
prone to unfair practices, such as search engines, social networks or
online intermediation services, which meet the objective legislative
criteria to be designated as gatekeepers;
- Define quantitative thresholds as a basis to identify presumed
gatekeepers. The Commission will also have powers to designate companies
as gatekeepers following a market investigation;
- Prohibit a number of practices which are clearly unfair, such as
blocking users from un-installing any pre-installed software or apps;
- Require gatekeepers to proactively put in place certain measures,
such as targeted measures allowing the software of third parties to
properly function and interoperate with their own services;
- Impose sanctions for non-compliance, which could include fines of up
to 10% of the gatekeeper's worldwide turnover, to ensure the
effectiveness of the new rules. For recurrent infringers, these
sanctions may also involve the obligation to take structural measures,
potentially extending to divestiture of certain businesses, where no
other equally effective alternative measure is available to ensure
compliance;
- Allow the Commission to carry out targeted market investigations to
assess whether new gatekeeper practices and services need to be added to
these rules, in order to ensure that the new gatekeeper rules keep up
with the fast pace of digital markets.
Next steps
The European Parliament and the Member States will discuss the
Commission's proposals in the ordinary legislative procedure. If
adopted, the final text will be directly applicable across the European
Union.
Background
The Digital Services Act and the Digital Markets Act
are the European answer to the deep reflection process in which the
Commission, EU Member States and many other jurisdictions have engaged
in recent years to understand the effects that digitalisation – and more
specifically online platforms – have on fundamental rights,
competition, and, more generally, on our societies and economies.
The Commission consulted a wide range of stakeholders in preparation
of this legislative package. During the summer of 2020, the Commission
consulted stakeholders to further support the work in analysing and
collecting evidence for scoping the specific issues that that may
require an EU-level intervention in the context of the Digital Services
Act and the New Competition Tool, which served as basis for the proposal
on the Digital Markets Act. The open public consultations in
preparation of today's package, which ran from June 2020 to September
2020, received more than 3000 replies from the whole spectrum of the
digital economy and from all over the world.
For More Information
Questions and Answers on the Digital Services Act
Questions and Answers on the Digital Markets Act
Facts page: The Digital Services Act
Facts page: The Digital Markets Act
Results of the public consultation on the Digital Services Act
Results of the public consultation on a New Competition Tool
Website on antitrust procedures
European Democracy Action Plan
Political Guidelines of President von der Leyen
Brochure - How do online platforms shape our lives and businesses?
Commission
© European Commission
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