Filenews 10 July 2022 - by Theano Thiopoulou
The last twenty years have included a strong growth of the online world, the rise-expansion of new technologies, new ways of working (especially after the outbreak of COVID), new ways of shopping, bookings of places to stay or even ordering food and transport.
However, the electronic world wanted regulation and a relevant EU Directive, it was approved in 2000, when platforms such as Amazon, Google, Booking.com, Facebook, Airbnb and Instagram were created.
Last week, the European Commission welcomed the adoption of the Digital Services Act and the Digital Markets Act by the European Parliament, which were proposed by the Commission in December 2020. The Commission, in its Communication, notes that "the Digital Services Package establishes the first comprehensive rulebook for online platforms, on which the daily lives of all of us depend. These new rules will apply across the EU and create a safer and more open digital space, based on respect for fundamental rights." Following the adoption of the Digital Services Package at first reading by the European Parliament, the texts now need to be formally adopted by the Council of the European Union. Once signed, the Digital Services Act and the Digital Markets Act will be published in the Official Journal. Both acts will enter into force 20 days after they are published in the official gazette this autumn.
Consumer protection
The act will improve the protection of users and fundamental rights online, create a strong transparency and accountability framework for online platforms and provide a single and uniform framework across the EU. The rules will make the online experience safer to allow citizens to freely express their ideas, communicate and shop online, reduce citizens' exposure to illegal activities and dangerous goods and ensure the protection of fundamental rights.
Online marketplaces should know who their business users are and clarify who sells a product or provides a service. This will help identify fraudulent traders and protect online shoppers from illegal products such as counterfeit and dangerous products. Where an online marketplace becomes aware of the illegality of a product or service, it should inform the consumers who purchased that product or service of (a) the illegality, (b) the identity of the trader and (c) any relevant remedies.
Citizens' rights
At the same time, citizens will be able to report any illegal content, including products, and challenge the decisions of online platforms regarding the removal of their content: platforms are obliged to notify them of any decision they take and the reason for that decision, as well as to have a mechanism in place to challenge it.
Specific rules will be introduced for very large online platforms and very large online search engines that resonate with over 45 million users, given their systemic impact on facilitating public debate, financial transactions and the dissemination of information, opinions and ideas. When these platforms recommend content, users will be able to modify the criteria used and choose not to receive personalized recommendations. Citizens will not have to rely only on what these companies say, they will be able to control their actions through reports by independent auditors and approved researchers.
Fakes
The Digital Services Act will provide for effective means for all actors in the online ecosystem to contribute to the fight against illegal goods. Platforms will have mandatory procedures in place to remove illegal products. Online marketplaces will also be required to track their merchants ("meet your business customers"). This will ensure a safe, transparent and trustworthy environment for consumers and discourage traders who misuse the platforms from selling unsafe or counterfeit goods.
Online platforms will also be required to organise their online contacts in a way that allows traders to comply with information obligations towards consumers. A new system of reliable sources of flagging of illegal content will also be available, e.g. for trademark holders who help fight counterfeit goods and for faster and easier labelling and removal of counterfeit goods. Public authorities will have new tools to directly order the removal of unsafe products.
Fines when there is no compliance
The Digital Services Act, in line with the Directive, covers all types of advertising, from digital marketing to advertising on specific issues and political advertising, and complements existing rules, such as the General Data Protection Regulation, which, for example, already sets out rules on users' consent or their right to object to targeted digital marketing.
To ensure the effectiveness of the new rules, it provides for the possibility of imposing sanctions in case of non-compliance with prohibitions or obligations. Where gatekeepers do not comply with the rules, the Commission may impose fines of up to 10% or 20%, in case of repeated infringements, on the total annual turnover of the company concerned worldwide, as well as periodic penalty payments of up to 5% of the total daily turnover of the company in question worldwide.
Prohibition of deception
Under the new rules, "misleading patterns" are prohibited. Providers of online platforms will be obliged not to design, organise or operate their web interfaces in a way that materially misleads, manipulates or distorts or limits the ability of users of their services to make free and informed decisions.
The ban complements, but does not replace, the bans already in place under consumer and data protection rules, as a large number of 'misleading patterns' misleading consumers have already been banned in the EU.
