Editorial – DSA and DMA: Can the EU take on Big Tech?, March 2021, by Arnaud Castaignet

Editorial – DSA and DMA: Can the EU take on Big Tech?, March 2021, by Arnaud Castaignet

by | 23 Mar 2021 | Editorial

In December 2020, the European Commission presented the Digital Services Act (DSA) and Digital Markets Act (DMA). Both are aimed at regulating digital platforms and clarifying the policing responsibilities. These new pieces of legislation are billed as urgent pieces of regulation, mostly because of concerns that the likes of Google and Facebook have become too powerful.

Last week, Margrethe Vestager, the executive vice-president of the EU and competition commissioner, even quoted David Bowie when she urged MEPs to speed up adoption of the legislation, saying “so now’s the moment when you can be heroes”. The European official has said she hopes an agreement between the European Parliament, member states and the European Commission can be reached by “spring 2022”.
The DMA focuses on gatekeepers’ behaviours and their impact on market dynamics, while the DSA seeks to consolidate various separate pieces of EU legislation and self-regulatory practices that address online illegal or ‘harmful’ content and to harmonise the rules applicable to the provision of digital services across the EU.

The context in which the two texts are now being discussed is highly favourable to a tough position for the EU against platforms. The suspension of the social media accounts of former U.S. President Donald Trump by Twitter, Facebook, Instagram, Snapchat, and others this winter sparked a lot of controversy in Europe. Without defending Donald Trump’s quotes, German Chancellor Angela Merkel considered the move “problematic.” The EU Commissioner for the internal market, Thierry Breton, found it “perplexing” that Twitter’s CEO Jack Dorsey could simply pull the plug on POTUS’s loudspeaker “without any checks and balances.”. From a European point of view, governments and institutions should regulate, not the company themselves without any legal framework but their internal rules. Governments and institutions ensure the freedom of expression, and set boundaries such as hate speech and incitement to violence, and companies must comply to laws.

Paradoxically, for some time now, European politicians have been trying to convince online platforms to “do more” to police the content of their users. National laws such as the German NetzDG, the Austrian KoPlG and the unconstitutional French Avia bill all require more effective moderation of online spaces, including more and faster removals. But “online gatekeepers” making arbitrary decisions about speech they allow online remains an issue.
The key here is that the DSA aims to regulate the process and not to regulate the speech. The idea is to strengthen due process, clarify notice and take down procedures, improve transparency of the decision making and ensure redress mechanism for removal or blocking decisions. Platforms would face the prospect of billions of euros in fines unless they abide by new rules across fields including advertising transparency, illegal content removal, and data access.

The DMA is the other key legislation that the Commission wants to implement to tackle the complex challenges facing the EU Digital Single Market, and improve the gatekeepers’ behaviour. While the Commission has not named any companies, it has proposed criteria that are sure to catch Google, Facebook, Amazon, Apple, Microsoft and SAP, among others. In the DMA, it defines a gatekeeper as a platform that operates in one (or more) of the digital world’s eight core services (including search, social networking, advertising and marketplaces) in at least three EU countries and:
  • Has a significant impact on the internal market (defined quantitatively as an annual turnover of €6.5 billion or a market capitalisation of €65 billion);
  • Serves as an important gateway for business users to reach end-users (user base larger than 45 million monthly end-users and 10,000 business users yearly);
  • Enjoys an entrenched and durable position or is likely to continue to enjoy such a position (meets the first and second criteria over three consecutive years).

A platform that meets these quantitative thresholds is labelled a gatekeeper. The Commission would also be empowered to alter the thresholds as technologies change, and to conduct market investigations to look for new gatekeepers.

Consequently, the DMA only targets the truly massive corporations. This way, companies and potential competitors to the Big Tech companies are not burdened with undue regulation. Basically, the DMA would list “Do’s” and “Don’ts” for big tech companies.
For instance, no self-preferencing: a prohibition on ranking their own products over others;
Data portability: an obligation to facilitate the portability of continuous and real-time data;
No ‘spying’: a prohibition on gatekeepers on using the data of their business users to compete with them;
Interoperability of ancillary services: an obligation to allow third-party ancillary service providers (eg payment providers) to run on their platforms;
Open software: an obligation to permit third-party app stores and software to operate on their OS.

The DMA states that the European Commission alone will be responsible for enforcement, meaning they would investigate any alleged violations and hand out penalties to any gatekeepers that violate the DMA’s new rules. Sanctions could go from fines, to periodic penalty payments, additional penalties, including potential “structural remedies”.

Time will tell if the DSA and the DMA manage to change the way the Internet operates and tackle the accumulation of power in the hands of a few companies that happened in the last decade. In any case, before we can create an internet that puts people first, it is important to regulate the domination of a few and support competition. The proposals for a Digital Services Act and a Digital Markets Act are therefore meant to protect Europeans as consumers if technology poses a risk to fundamental rights.



Author
Arnaud Castaignet, Tech European expert and Administrator of SOGA EU
Tallinn, Estonia
March 2021
The role of social economy in a fair and sustainable recovery: input for the future Action Plan on social economy

The role of social economy in a fair and sustainable recovery: input for the future Action Plan on social economy

by | 11 Mar 2021 | Editorial

The first European Social plan, which will be driven by European associations and announced by Commissioner Nicolas Schmit, raises several questions. The consequences of the economic and social crises we are experiencing are putting the social economy at the forefront, which has shown its resilience capacities in the recent months. This is why the European Economic and Social Committee organised a public hearing on February 17th focusing on the role of the social economy in the European recovery.

 

“The circular economy can only work with fair regulation”

The European Union has been able to propose new legislative instruments that will strengthen the adaptability of its public policies and the resilience of its citizens. New levers for action were recommended in the recent strategic foresight report. Giuseppe Guerini (EESC) highlighted the appropriate response the social economy provided in the crisis and in the recovery. That is why there is a need for “a more harmonised fiscal policy among Member States, which would allow greater recognition of the general interest function of social economy organisations”, he said. This issue is also perfectly fits with the programme of the Portuguese Presidency of the Council that began last January, which focuses on the European social rights basis and also corresponds to the action plan announced by Mr. Schmit. It should be noted that this presidency is resolutely focused on the digital dimension, and that this dimension will be pursued during the forthcoming Slovenian and French presidencies.

 

The MEP Sven Giegold then focused on the role of the European Parliament in promoting social economy. According to the MEP, “the EU must support this sector as much as possible, in particular by going further in terms of public policies”. For example, it would be appropriate, according to Mr Giegold, to create a stronger statute for associations at the European level. “There is a real need for a new offensive from the European institutions to recognise the social economy in its diversity, to facilitate the procedures related to it and to create a clear and transparent status” he said. The MEP supports the idea that the social economy can only function on the basis of fair regulation, while relying on a long political agenda and continued support from public authorities.

“The role of the state must be reassessed to improve our resilience”

Nevertheless, the EU is defined by the Treaties as a social market economy, which at present still seems to be lacking. It is necessary to find a good balance to bring business into this debate. Thus, the major economic sectors are seen as inactive in this area, according to Maxime Cerutti (Business Europe).

There is a need for help, especially financial help, in this sector, which has been weakened by the current crises. Filipa Farelo (CASES, Portugal) took the opportunity to point out that “the social economy should be given greater prominence in order to guarantee a better European transition, particularly in view of its importance in terms of resilience”. According to her, the social economy has demonstrated its capacity for inclusion and diversity, in terms of the good representation of women and people with reduced mobility it shows, compared to other sectors.

 

“The current crisis allows for change in some sectors”

Juan Pedreno (Social Economy Europe) pointed out the importance of supporting democratically functioning start-ups. Such initiatives would allow for a more active participation of European citizens, while strengthening protection systems and cooperation with the public sector to build innovative projects. Thus, the digital transition is a crucial issue for revitalising the social economy in Europe, especially in rural areas affected by the crisis through collective enterprises. The role of the state must therefore be reassessed to improve the resilience of each and every individual.

 

The social economy is therefore a priority for many actors at the European level, as Jordi Canas, MEP, stated at this public hearing. He therefore regretted the fact that the social economy is not a priority of the Commission, but an objective. Ann Branch (DG Empl) stated that “the Commission attaches full importance to the common base and the social economy”. This therefore poses problems of legal interpretation at the level of European standards related to this theme.

This position is all the more regrettable since the role of the social economy is clear in job creation, without being fully recognised, according to Gianluca Pastorelli (DIESIS). This is why the current crises could be a real window of opportunity to change certain sectors, such as “tourism, which can be made more sustainable and local”, in connection with the social economy.