Open letter from industry players:
Strengthen the fundamental principles of the e-Commerce Directive in new Digital Services Act.
This year, the European Commission will propose a new Digital Services Act (DSA) to clarify the role of online platforms. This is a great opportunity to examine the role of online platforms in our economy and society, and update the 20-year-old e-Commerce Directive.
We welcome the joint position paper published by D9+ countries this May on ‘The creation of a modern regulatory framework for the provision of online services in the EU’ and its call to keep the core e-Commerce Directive principles in any new regulatory framework to make sure that the EU digital economy can grow and scale. The e-Commerce Directive has made it possible for our members to launch, grow and flourish in the EU market. It has allowed them to innovate, to find users and to build products based on the free flow of information, all while promoting responsible behaviour and providing untold benefits to Europe’s citizens.
Our industry group represents a range of organisations – from startups to unicorns to fast-growing scaleups and business associations. We thank the D9+ countries for their leadership in fostering Europe’s digital businesses, and we hope to see more EU countries follow their lead. The D9+ countries should broaden and deepen their emerging coalition and other EU countries should show their support for the statement and work together with the D9+ countries to ensure that Europe has a thriving digital economy built on an evidence-based and tailored approach, basing new DSA proposals on Better Regulation principles to ensure a balanced and proportional level of regulation.
Director EU Policy, Allied for Startups
Peter J. Kofler
Chairman, Danish Entrepreneurs
1. Learning from the crisis
As governments and the tech sector continue their efforts to respond to the COVID-19 crisis, this is a timely opportunity to review plans for the DSA, particularly in light of the lessons we have learned over these difficult weeks. We have seen the positive effect of internet-based services as they have mitigated chilling effects on the business sector, especially on small business, by allowing commercial activity to continue while public life has been restricted.
As the European Commission prepares to launch its consultation on the DSA, we hope that the joint position from the D9+ countries will make the case for a DSA that unleashes the full potential of digitalisation and fosters responsible innovation by Europe’s platforms and by the startups of the future. Both are important engines of growth and jobs to power us through the economic recovery ahead.
2. A future-oriented and flexible approach
The D9+ countries take a future-oriented and flexible approach to technology policy domestically, and recognise the dangers of imposing rules that are quickly outgrown by the new technologies they are designed to regulate.
We are aware that governments feel the common political pressure to ‘do something’ and to 'fix' the internet. We are looking forward to this debate and have concrete suggestions to make. Nevertheless, we caution that there are no easy fixes and no one size fits all, and that poorly designed regulations could undermine foundational and effective principles of the e-Commerce Directive. Without those principles, countless opportunities for new innovation will potentially be lost.
3. Complex regulation favours the largest players
Above all, the innovation sector needs legal clarity and a manageable regulatory framework if they are to take the risks involved in doing what they do. We are concerned that complicated new regulatory approaches, designed to ‘rein in Big Tech’, could have severe unintended consequences for our members, who simply lack the resources to implement complex mechanisms to deal with some of the issues under discussion – for example to liability.
Already our members are working hard to comply with the GDPR, copyright and other regulations. A new layer of complexity in the form of a DSA will only favor the largest players, and exempting SMEs would not work for growth-oriented startups.
Simply put, an overly broad or unclear scope on what requirements need to be met will cost time and money that our members simply do not have, and will undermine Europe’s efforts to be the first choice for startups, scale-ups, and investment-at-large.
4. The principles of the e-Commerce Directive are key
The e-Commerce Directive enshrines an important balance between the intermediary’s responsibilities and the user’s right to expression and information. Making platforms liable by default, regardless of their knowledge of any illegal activity and without providing any guidance how they could mitigate increased liability, would add an untenable amount of legal risk for any small company. Obviously, we understand that platforms big and small have a responsibility when they bring together content, people or products and consumers need to be protected. But be assured: No platform wants to host illegal content, but only a comprehensive, multi-stakeholder approach to tackling this problem will work. It’s important to preserve the limited liability regime as well as the prohibition of general monitoring obligation as fundamental cornerstones of the European platform economy.
It is also important to retain the country of origin principle. Watering down this principle, or reverting to a country of destination principle, would interfere with businesses’ choice of entering new markets and hence the scalability of our startups too.
Transparency and trust is fundamental to startups. In the DSA it will be important to strike the right balance between doing what is necessary to tackle bad actors and preventing possibilities to game the systems and compromise user privacy and security. At the same time, the DSA should not overlap with the Platform-to-business regulation, which is currently being implemented in Member States. Moreover, there needs to be a clear line to prevent businesses from revealing precise details about their business model.
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