In December 2020, at the end of a year characterized by the coronavirus and the rise of digital services, Margrethe Vestager, Vice President of the European Commission in charge of Competition, and Thierry Breton, Commissioner for the Internal Market and Digital, unveiled two legislative initiatives aimed at putting an end to what Mr Breton calls the "Digital Wild West.
Firstly, the Digital Services Act (DSA), that completes and clarifies a directive dating from the 2000s. The objective of the DSA is to update the rules of the E-commerce Directive to better meet the issues raised by the development of new digital services. The second piece of legislation is the Digital Markets Act (DMA), aimed at addressing the negative consequences arising from platforms acting as digital “gatekeepers”.
The Commission is developing its new approach to digital services with a mantra: "What is illegal offline is also illegal online". Behind this objective, and while tough negotiations have opened in Brussels since the presentation of the DSA, it is necessary to discuss the major issues behind this piece of legislation and the way in which users could be impacted.
Very soon, the DSA should put an end to the proliferation of illegal content on the Internet. The legislative vehicle chosen by the Commission for this text means that the DSA will apply to all the countries of the European Union without the need to be transposed into national laws.
All illegal content, including goods sold on the Internet, are concerned here. Confronted with the urgency of this regulation, several states are planning to anticipate the directive through national laws. This strong political will suggests that the battle against illegal content will have tangible effects for users and consumers.
From the point of view of e-commerce, the application of the DSA will have effects both online and offline. Online, some e-commerce sites will have to be more careful about the products they host and catalogs that used to mix authorized and counterfeit products will have to evolve to make the latter disappear. At the same time, it will logically have an effect on the ability of platforms to engage consumers: some of them, well known for their very competitive prices, will be more impacted. And it will also have an effect on physical stores by making price competitiveness one of the major challenges, as online platforms are pulling prices down.
While the regulation of content on platforms will incite debate, the example of e-commerce suggests that the first effect of the DSA will be visible as soon as it is implemented. Indeed, the scope of the legislation and its legally binding nature will encourage companies to anticipate these transformations.
In addition to illegal content and products, the DSA is governed by two principles that will gradually change the way users interact with digital services - transparency and interoperability - which will become prerequisites for access for EU citizens.
The word "transparency" has become a major issue in public debate, but nowhere is it more important than when it comes to digital services. Why am I seeing this ad? Why should someone who owns a smartphone of a certain brand be forced to store their photos in the cloud owned by the same brand? The information provided to end users by service providers is lacking in detail. The issue is rather that we depend too much on algorithms and there is not a sufficient amount of control.
In the future, DSA enforcement will require digital service providers to incorporate information about how their tools work to keep consumers as well informed as possible. This will have consequences on the way web pages are displayed, on the information you receive when browsing and ultimately on the services you trust. For example, this is the case for tracking cookies, which can no longer be used without the user's consent.
The other major change stems from the European scope of the legislation: harmonizing measures across the European Union will create conditions for the interoperability of digital services. It will take longer to implement but its effect on citizens will be major. To envisage this principle in concrete terms, we can take the example, already in place, of roaming and access to the Internet from any country in the European Union at no extra cost to the consumer.
In the near future, thanks to the DSA, users will have more power and ability to choose between digital services. Ultimately, this will allow us to have a better understanding of our digital practices. Like the GDPR, which put the topic of personal data on the table, the ultimate effect of the DSA will be that people will question the trust they place in digital services and platforms and the power they give them.
If the DSA aims to regulate the entire digital sphere, the legislation is also concerned with the power of the tech giants. The Commission is not ignoring this issue as it has devised various obligations for them. And as this issue is so important it has devoted an entire piece of legislation to it, the Digital Markets Act.
Frederik Claessens, e-Commerce expert