EC Targets Transparency, Disinformation on Online Platforms

The European Commission ramped up pressure on online platforms Thursday, telling them to be more open in dealings with other businesses and take more responsibility for fighting fake news. The platform transparency rules, aimed at creating a fairer business environment for smaller companies, include requirements that platforms make terms and conditions for professional users clearer and resolve disputes more efficiently. The disinformation proposal calls for an EU-wide code of practice and the possibility of regulation if significant changes aren't apparent by October. It won praise from the tech sector and others, while the transparency regulation prompted a mix of reactions.

Meanwhile, controversial language on platform liability for infringement could soon be OK'd as part of negotiations on the copyright reform package.

Online search engines and platforms generate the vast preponderance of internet traffic for big businesses and small and mid-sized companies, an EC fact sheet said. "The current position of the online platforms as intermediaries of business customer relationships allows them to engage in unfair trading practices that can cause significant economic harm to the businesses that use them." The proposal "aims to establish a fair, trusted and innovation-driven ecosystem in the online platform economy." The regulation would cover online intermediaries such as Amazon Marketplace, app stores such as Google Play, and social media sites for business and price comparison sites such as Google Shopping.

While the transparency proposals are a "strong step in the right direction, I fear it may be too little, too late," emailed Shivaun Raff, CEO of search engine Foundem, the lead complainant in EC's Google Search comparison shopping competition case. She urged the EC to couple transparency requirements "with clear and enforceable non-discriminatory obligations" or risk "providing the tools to uncover discrimination without providing the teeth to do anything about it."

DigitalEurope welcomed the "measured approach," urging lawmakers not to impose further rules that could hamper innovation. "Understanding the functioning of platforms is key to build trust with users," but "disproportionate requirements could undermine" the market's growth, said Director-General Cecilia Bonefeld-Dahl.

Online platforms "go to great lengths to maintain good relations with their business users because it's in their own interest," said Computer & Communications Industry Association Vice President-Competition & EU Regulatory Policy Jakob Kucharczyk. There's no evidence of a systemic problem that would justify regulation, he said. GSMA, however, said the EC didn't go far enough. Despite risks identified by the EC, "some crucial issues such as discrimination and unfair practices linked to major platforms characterised as 'gatekeepers' have not been considered," said Afke Schaart, head-Europe. The rules will "help address the 'power gap' between the bargaining power of some online services compared to that of small and mid-sized suppliers," said the Independent Music Companies Association.

Fighting Disinformation

Disinformation online is a "kind of combat" without rules of engagement, EC Security Union Commissioner Julian King told a news briefing. Digital tools let it spread at a scale and speed not seen before, but there's a lack of understanding of how fake news works and what can be done about it, he said. Platforms have a key role in countering disinformation so the EC hopes to see progress by July on the development of a common code of practice, he said. If voluntary measures don't work, the EC will consider other options, he said.

The code must ensure transparency about sponsored content, particularly political advertising, and restrict targeting options for political ads and reduce revenue for purveyors of disinformation, the EC said. It must also give more clarity about how algorithms work, enable them to be verified by third parties, and make it easier for users to find and access different news sources with alternative viewpoints, it said: There must be measures for identifying and closing fake accounts and tackling automatic bots.

The proposal envisions an independent European network of fact-checkers, a secure online platform on disinformation, and support for governments to make elections resilient against cyber threats. It's not about censoring content or limiting speech, King said.

"People want accurate information on Facebook -- and that's what we want," emailed a spokeswoman. "The company has invested heavily in fighting false news on its platform by disrupting the economic incentives for its spread, building new products and working with third-party fact-checkers." The tech industry takes the spread of disinformation online "very seriously," said CCIA Europe Senior Policy Manager Maud Sacquet. She praised the EC's multistakeholder approach but said CCIA is concerned that the October compliance deadline seems "rushed." Google and Twitter didn't immediately comment.

European Digital Rights and others urged the EC "not to rush into taking binding measures regarding 'fake news'" but to consider the expertise of civil liberties and digital rights experts. Measures aimed at addressing online disinformation should clearly and narrowly define the problem and be based on "clear empirical data of actual harms that are on a scale that merits intervention," said EDRi, the Civil Liberties Union for Europe and Access Now.

Copyright Concerns

EU efforts to finalize updated copyright rules are expected to inch forward April 27 when government representatives consider whether to accept as the Council negotiating position compromise language floated by the Bulgarian EU Presidency. Of the three key remaining issues, the most controversial remains Article 13, which deals with the "value gap" created by the use of protected content by online content-sharing service providers, those we spoke with said.

The new text says such providers perform an "act of communication to the public" when they give public access to works or other subject matter uploaded by their users, the presidency note said. They should obtain authorization from rights owners via licensing agreements before allowing access to protected material, it said. Without authorization, the service providers must prevent the works from being made public or be considered liable for copyright infringement, it said. They can avoid liability by applying preventive measures and showing they made best efforts to keep the content from being accessed; and, if some content is still published, they're subject to notice-and-stay-down obligations to remove the work quickly.

The wording creates a new and additional form of communication, said Hogan Lovells (London) intellectual property lawyer Alistair Shaw in an interview. The proposed provisions are clearer and more easily understood yet "radical," he said. They create a different kind of safe harbor for online content-sharing service providers from that given to online intermediaries under the EU e-commerce directive, Shaw said.

EU countries' permanent representatives to the Council are meeting Friday to consider whether the compromise text should be used in talks with Parliament, said CCIA's Sacquet in an interview. It could be adopted Friday or next week, she said. Many people are worried about the proposal, with 145 organizations from across Europe telling the Council in an April 26 letter the text "in no way reflects a balanced compromise" but "represents a major threat" to freedoms and competitiveness. The letter urged the Council to take more time to discuss the provision, given lawmakers won't vote on copyright reform until the end of June. Signers include CCIA, the Center for Democracy & Technology and the Electronic Frontier Foundation.

The main problem with Article 13 is its scope, Sacquet said. It would affect all websites where users can interact by posting videos, comments and so on -- including open source software platforms, social media sites and YouTube -- and providers will be directly liable for those users activities, she said. It will be impossible for content-sharing sites to negotiate licenses with all rights holders for all uploaded content, she said.