I-Com replies to the European Commission Consultation on the Digital Services Act

Article
Mattia Ceracchi
Digital Services Act

The Institute for Competitiveness (I-Com) expressed its views on how to reform the current EU’s legal framework for digital services, providing its contribution to the European Commission’s consultation on the Digital Services Act (DSA). The DSA package was announced as a cornerstone of the von der Leyen Commission Digital Strategy, with the main objectives of strengthening the Single Market for digital services and fostering the innovation and competitiveness of the European online environment. According to the 2020 Work Programme, the Commission is expected to publish the legislative proposal on the DSA by the end of this year.

I-Com agrees that the gradual and massive transfer of many socio-economic activities to the Internet is highlighting the need to rethink the role and responsibilities for online platforms and other digital service providers. According to I-Com, in redesigning the rules, it is important to ensure an effective system of protection for users, but it is essential, at the same time, to avoid the risk that the regulatory system hinders the entry into the market of new companies (intermediaries and sellers) and discourages innovation and the provision of new services to citizens and businesses. Therefore, I-Com highlights that the regulatory framework should guarantee a trustful and reliable playing field, without overbearing platforms and forcing them to hold back new entrants and SMEs from their marketplaces. At the same time, full liability should be required for platforms selling their own labelled products.

In I-Com’s view, also, online disinformation needs to be tackled more vigorously than in the past. Source transparency and exposure to high-quality information are two key issues. Besides, authorities should be in a position to constantly monitor online disinformation and the effectiveness of digital platforms in fighting against it. However, regulation should be limited to specific aspects and light-handed, in order to keep innovation and market dynamics lively.

Regarding liability for online intermediaries and the different types of services set by the E-Commerce Directive, I-Com highlights that the current legislation looked at the Internet as a fairly unexplored terrain and favoured, with its rules, the search for new business models with low liability risk. Here a subdivision into a few specific categories was envisaged, that today needs to be rethought according to a logic aimed once again to refrain from hindering innovation and the creation of new businesses, key to a competitive economy, and, at the same time, ensure adequate protection for users.

Concerning the criteria to accurately identify large online platform companies with a gatekeeper role, I-Com argues that different criteria should be combined taking into account both static and dynamic competition. For example, if a large digital platform enters another market or provides new services, it may increase competition to the incumbent digital platform(s), other than bringing benefits to its users. This potential beneficial impact could be positively correlated with factors such as a large user base, existing assets, etc. At the same time, anti-competitive behaviour such as lock-in practices should be decisively tackled if associated with a dominant role in some areas of activity.

On the need to consider dedicated regulatory rules for large online platforms acting as gatekeepers, I-Com highlights that generally speaking large online platforms have provided huge benefits to users and a more restrictive regulatory framework could reduce innovation and raise costs or reduce services for consumers and businesses currently provided often for free or at low cost. However, some specific regulation ensuring information and commercial fairness should be adopted. In particular, users should be provided with clear information concerning the use of their data and its sharing with third parties, how to ensure data portability and the type of commercial link of other services and goods advertised or recommended on the platform to the same platform. As well, digital gatekeepers should treat potential competitors operating on their platform based on fairness and third-party principles.