EU Floats New Rules for Online Platforms

Major "gatekeepers" such as social media services would face tighter supervision under proposed legislation unveiled by the European Commission Tuesday. The Digital Services Act (DSA) and Digital Market Act (DMA) aim to give users better, more reliable services, allow smaller companies to scale up across the EU and prevent unfair conditions imposed by online platforms that are or are expected to become gatekeepers to the single market, the EC said. They are "milestones in the journey to making Europe fit for the digital age," said EC Vice President Margrethe Vestager. The goal is to ensure internet users have access to a wide range of digital services, all companies can compete online as they do offline, and users can trust what they see online, she said. The DSA contains measures to counter illegal content and has transparency rules for platforms and requirements for very large platforms to prevent abuse of their systems. The DSA builds on existing intermediary liability rules in the EU e-commerce directive. Very large platforms that fail to comply would face fines of up to 6% of global revenue. The DMA applies specifically to gatekeepers, to be defined by their role in the market according to factors such as size, whether they operate as gatekeepers between businesses and users, and whether they have an entrenched position. Gatekeeper obligations, the EC said, would include giving companies that advertise on its platform access to the performance measuring tools it uses. Gatekeepers would need to allow business users to promote their own offers and give such users access to the data generated by those activities. Large platforms would be barred from blocking users from uninstalling and preinstalling software or apps, using data obtained from their business users to compete with those companies, and restricting users from accessing services they found elsewhere. Companies would self-verify as gatekeepers if they meet DMA quantitative thresholds. The EC would then designate them as gatekeepers, and within six months, they would need to comply with DMA rules. Platforms that ignore the rules are subject to fines of up to 10% of revenue, and, if there are systemic infringements, the EC can impose additional remedies such as forcing a unit's sale. The proposed legislation needs approval by the European Parliament and the Council.