There is a growing global appetite to tackle the issue of online harms and protecting online consumers and users. But who should bear the responsibility for preventing, policing and removing harmful online content or products? Who decides what is and is not acceptable and how can that be fairly enforced? These are not easy questions. What is clear is that regulation is coming and the responsibilities and liabilities of online marketplaces, platforms and digital content hosts will change.

In this series Kemp Little’s experts look at the problem, current solutions, consultations and recent developments in shaping a safer digital world.

We hope you enjoy this KL Series.

Please also join us on 11 June for a webinar covering the EU’s new Digital Service Act and consultation and the UK’s progress in its online harms initiative.

Issue # 2: The EU Parliamentary Committee’s Report on Recommendations for the Digital Services Act

The President of the European Commission has committed to “upgrade the Union’s liability and safety rules for digital platforms, services and products, with a new Digital Services Act” (the DSA). A public consultation on the DSA is due and various interested bodies have started to publish reports and recommendations.

On 24 April, The European Parliamentary Committee on the Internal Market and Consumer Protection (IMCO) published its draft report of recommendations to the European Commission on the DSA.

The IMCO report first explains the context and the need for updated regulation:

• While the E-Commerce Directive (2000/31/EC) has been a successful piece of EU legislation, it was adopted 20 years ago and no longer accommodates the realities of modern e-commerce, which covers a wide range of services, providers and challenges. This can be seen by the fragmented approaches of different member states in tackling illegal online content.
• Voluntary actions and self-regulation by platforms have brought some benefits, but this does not go far enough and regulation is required.
• The spread of illegal content online threatens confidence in the digital ecosystem and harms the development of healthy platform ecosystems and legitimate markets for digital services.
• Online platforms, whilst benefiting consumers by offering more choices and lower prices, have allowed sellers to offer products which do not comply with EU safety rules or guarantee consumer rights. Non-EU sellers, who sit outside the relevant EU laws, present a particular problem in this regard.
• Given the cross-border nature of digital services supervision, cooperation between member states is essential to ensuring effective regulation under the new DSA.

The report then sets out the IMCO’s recommendations as to the content of the DSA. These are summarised below.

• A revision of the E-Commerce Directive, including:
• A revised framework with clear due diligence, transparency and information obligations.
• Clear procedures and measures regarding the removal of illegal content online, including a harmonised and legally-binding European notice-and-action mechanism.
• Effective supervision, cooperation and sanctions.
• An internal market legal instrument imposing ex-ante obligations on large platforms with a gatekeeper role in the digital ecosystem, complemented by effective institutional enforcement mechanisms.

The EU will most likely retain the E-Commerce Directive’s legal liability regime for internet intermediaries for online harms, which include the exemption for passive hosts and no general monitoring obligation. However, IMCO has called for further clarity regarding whether hosts are deemed to be active or passive, including editorial functions and the degree of control of the data, which it says should lead to a loss of safe harbour provisions due to their active nature.

For more information see our Digital Content & Reputation Risks hub.

Contact our Digital Content & Reputation Risk team here.

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