EU Commission initiative | Digital Services Act package: ex ante regulatory instrument of very large online platforms acting as gatekeepers
Confederation of Finnish Industries (“EK”) is the leading business organization in Finland. EK serves over 15,300 member companies, in all sizes and across all business sectors. EK thanks for the opportunity to participate in the consultation and presents the following remarks.
- We agree that rules for the platform economy need modernization. This should be done in a sustainable way, with respect to the principles of freedom of speech and freedom of establishment.
- Europe should advance its position by strengthening the Single Market, by harmonizing legislation and leveling the playing field. Importantly, EU should also use trade policy to strengthen rule based global economy to better enable EU-based platforms to operate and grow globally, and our businesses to utilize in other regions. We should avoid even appearance of trying to get protectionist, short term wins in the upcoming regulatory efforts.
- Finnish companies have so far been mostly on the user side of platforms, and most large platforms are based outside Europe. From this starting point, our short-term interest is to increase participation and rights of user companies in the platform economy. Long term the aim is to facilitate a good environment for platform innovations and growth within and beyond Europe.
- When platforms offer their services or goods to European consumers, the same level of protection of values, consumer rights and privacy must be respected.
Digital Single Market
- Country of origin must remain the cornerstone of any future regulation. This should not change. Another key principle is the free movement of information society services. Creation of rules and regulatory coordination must happen on EU-level. Pre-moderation and censorship must be avoided (except for content that has been deemed illegal on EU-level). Freedom of speech and expression, and free movement of information must be protected as fundamental rights.
- Exemption of intermediary liability should be kept as a starting point. These rules should be harmonized and conditional. Rules for the exemption should be renewed and adjusted to correspond the activities of new actors and platforms types that have developed since the original eCommerce directive. There is a need for predictable and clear categorization of different platforms.
- Platform economy is not a monolith, as platforms operate in different sectors and with diverse business models. The key to sustainable regulation is identifying market imbalances and respond with the right remedies in proportionate manner. Regulation must aim for equal treatment of platforms, but equal does not necessarily mean identical in this context.
- Platform responsibilities need to be proportionate and connected to the nature of their activities and their position in the value chain. This requires a good categorization and new definitions of different platform operators. Some organizations are actively influencing the content (social media and algorithmic influencing of content), others have a passive role (infrastructure, hosting). It is important that an active platform can still enjoy exemption of liability if it fulfills its conditions. The Commission must further specify, by category and context, the limitations of, and conditions for any exemption.
- Rules should reflect not only the online environment, but also sectoral responsibilities should be considered. For example, when assessing trade with goods, the responsibilities and liability should be assessed based on how the responsibilities and rights are fulfilled (consumer protection, product, and producer responsibility). The sales channel alone, online or offline, should not solely determine the rights and responsibilities of the seller or the platform.
Renewal of content liability rules
- Liability rules must be redrafted so that any disincentive to content management is removed. However, this is just the minimum level. At minimum, the eCommerce directive recital 40 should be elevated as a binding rule:” the provisions of this Directive relating to liability should not preclude the development and effective operation, by the different interested parties, of technical systems of protection and identification and of technical surveillance instruments made possible by digital technology within the limits laid down by Directives 95/46/EC and 97/66/EC.”
- Regulations on unlawful content and goods that are to be removed proactively should be coordinated on EU-level. These categories must be defined clearly and precisely enough (terroristic content, child sexual abuse), to avoid difficult borderline cases. The courts in the place of establishment must have jurisdiction in the matter, and any orders must be proportional and specified.
- Harmful, but not unlawful content. Platforms must be primarily engaged on voluntary basis in finding common, flexible solutions on EU-level, that can be adopted quickly and targeted to meet emerging harmful phenomena, such as Covid-disinformation and (undue) electoral influencing.
- Content published under editorial responsibility should not be removed without a court order. To promote multifaceted media and to guarantee media freedom, it is essential that platforms cannot remove content that is published under editorial responsibility. Lawfulness of media content should always be under jurisdiction of the publisher’s country of establishment.
- Harmonized responsibilities. Tools for platforms need to be harmonised at least on a minimum level. However, it is equally important that the solutions must be based on the nature, size and position of the platform. Regulation should be technology neutral to ensure that actors can use the best possible and most suitable tools.
- Harmonized responsibilities should contain (at least, for very large platforms)o Effective, reactive measures: ”notice & action” for unlawful goods and content.
– Commission should investigate possibilities to “extended” notice & action responsibility on marketplaces, in which clearly same or similar unlawful products should be removed, even without a separate notification on each individual case.
– Proactive risk management system, appropriately resourced and proportionate to technological development. Systematic risk management should promote each platforms’ own rules and their enforcement. This may include proactive (but passive), on-going surveillance combined with reactive action.
– Know-your-customer -schemes for professional users and seller responsibility management should be a key tool for risk management. At the same time, these systems should be used to increase awareness and promote capabilities to participate in e.g. producer liability schemes. It is important to balance the goals and measures in order to ensure a smooth entrance of especially SME companies to the platform and to avoid unnecessary administrative burden.
– Platforms must have effective channel for authority contacts and cooperation. Further, collaboration channel for trusted flaggers (associations, NGOs) should be considered, primarily on voluntary basis.
- Primarily, responsibility over content and goods remains with users and sellers. However, the Commission is encouraged to explore further in which situations it would be appropriate for a marketplace to have a secondary responsibility. As a starting point, this should be a secondary, proportionate responsibility and should not become a barrier to market entry.
- Limitations and possibilities of data portability and transfer of personal data should be evaluated and developed also from the perspective of making it easier to change service providers. Additionally, so called “MyData”-operators’ legal status should be clarified.
Gatekeeper Platforms // Ex Ante Rules
- Platform to business regulation is new, and it is too early to evaluate its efficacy. Although there may be some place for “positive discrimination” when it comes to SMEs in platform ecosystem, any additional legislative measure should be supported by evidence of its necessity.
- Coherence with competition regime and need for specific ex ante rules must be thoroughly assessed going forward. The object of any regulation, gatekeeper companies or like, must be clearly defined.
- It is imperative that any new ex ante -legislation is be clear, predictable, and proportional. One such form could be a “blacklist” where certain, well-defined unnecessarily restrictive contract clauses and trade practices are prohibited or presumed unlawful (e.g. self-preferencing, “most favored nation” clauses).The objective of and means to achieve it must be clearly connected, and gatekeeper companies must have in balance effective and proper remedies.
- We strongly encourage that the current competition regime should be reviewed. Based on that analysis, primarily the existing rules enforcement and practices should be developed to capture any issues. Only if this is deemed insufficient, should a new competition tool be used for the remaining, identified, and recognized issues. Any measure should be timely and effective. As mentioned above, competition rules should be assessed for coherence with other proposals, and for their direct and indirect impact.
- Access to data and its availability, and interoperability of services should be promoted in a balanced manner, taking both data users and data producers needs in consideration. It is important to ensure that companies have necessary incentives to invest in completely new data, and in services and products based on it. Sellers´ data access on marketplaces should be advanced. Coherence of the bigger questions in data sharing and access rights should be harmonized with eventual Data Act -proposal.
- Questions relating to personal data, ad targeting and cookies should be directed to be solved separately under GPDR and ePrivacy regimes.
- On “advertising walls”: already current legislation accepts that users can pay for the services with their data, and/or that they can be subjected to advertising. Advertising income is essential to business models for several services consumers and users enjoy for low or no monetary compensation. This applies to both online and built environment. Rules and best practices in advertising are best promoted by self-regulation and market driven efforts.
Authorities, transparency and access to information
- Platform economy supervision and guidance needs to be coordinated on EU level, in collaboration with platforms. A possible new authority should be capable of coordinating national and EU proposals, be agile, proactive, and an independent EU-level organization. Similarly, it is also important to secure that authorities and judiciaries have necessary expertise on platform economy matters.
- Collaboration by and between platforms and businesses and authorities should be made smoother and the platforms need to put in place effective communication channels.
- Any eventual rules on an authority´s right of access to information must be clearly connected to an identified and recognized need. Emphasis should be put on information to be used as basis of market analysis to identify possible issues and the remedies needed. Any access to information right must support flexible and fact-based guidance.
- Authorities jurisdiction, responsibilities and their limits must be set in advance, in a clear and precise manner. Right of access to information and data must be proportionate to the platforms or other subjects´ defense and refusal rights. Also, such access to information must not form a backdoor to “freeriders”, and therefore 3rd party access to such data and information needs to be limited and clearly defined in advance.