September 07, 2020

BRUSSELS – Today, global tech trade association ITI responded to the European Commission’s public consultation on the forthcoming Digital Services Act (DSA). ITI’s comments on the e-commerce, gatekeeper, and competition aspects of the DSA initiative underscore its support for the Commission’s plans to enhance legal certainty, clarify roles, and define responsibilities for actors in the online context.

“As representatives of the world’s leading innovation companies across all the segments of tech, we recognise our shared responsibility to maintain a safe, inclusive, and innovative online environment. All relevant stakeholders need to work together to ensure that the internet has sufficient protections for users, smaller businesses, and brands,” said Guido Lobrano, ITI Vice President of Policy for Europe.

“We support the EU’s efforts to safeguard citizens from harmful and illegal content online and maintain a well-functioning, competitive online ecosystem. Our latest comments point to many best practices already undertaken by the tech industry to stop the spread of illegal content online, and also reflect our industry’s perspective on how these policy initiatives can foster consumer welfare and economic efficiencies.”

In its comments, ITI continues to advocate for a differentiation in approaches to illegal as opposed to harmful content, and outlines considerations on new tools such as trusted flagger or know-your-customer schemes to help fight illegal content in particular. There is also value in exploring a single EU-wide coordinated oversight model to enhance legal certainty and help companies take reasonable, feasible, and proportionate measures.

We support the European Commission’s thoughtful consideration of the existing legal principles underpinning the provision of digital services and products and acknowledging their importance for the economy at large. In pursuing initiatives on gatekeeper effects, ITI recognises that EU policymakers need to carefully consider effects on consumer welfare, the freedom to conduct a business, and preservation of competitive markets. Any initiatives should be focused on the characteristics of a market, specific activities by a company, and interactions with other businesses and users – these being more indicative of a potential market failure than just the characteristics of a particular player, such as market share, number of users, or number of services offered. Proportionate instruments that guarantee a consistent policy approach and fair competition should be considered wherever necessary, with the goal of ensuring market access for innovative challengers, safeguarding consumer welfare and economic efficiency, and focusing on resolving proven market failures.

ITI’s latest comments further develop many of the recommendations put forward in its April and June 2020 papers on the DSA, while also highlighting new ideas including:

  • Trusted flagger schemes can be a useful tool to enhance collaboration among all actors in the timely removal of illegal content online, where a notifier (e.g. corporate entities or neutral third-party organisations) has built a reputation for accuracy and a lack of abuse. A cooperative and dynamic trusted flagger scheme should set out the criteria a trusted flagger would need to meet, to obtain, maintain and retain this status. Such systems can bring efficiency gains for both intermediaries and rightsholders and create a smoother removal process for illegal content in general.
  • ‘Know your customer’ (KYC) schemes for commercial users of marketplaces, if developed and implemented in a way that does not introduce disproportionate or burdensome obligations on the parties involved, could create a positive scenario for improving accountability.
  • We recognize the challenge in pursuing creating ex ante rules to address gatekeeper effects without creating unintended consequences on innovation, consumer experience, or business growth. Better understanding how certain practices may impact a specific market and correcting potential imbalances and failures is important. Any potential restrictions or limitations to a company’s behaviour or practices should be narrowly focused to achieve the intended goal. Ex ante rules require very careful consideration in a dynamic industry that has multiple business models, types of users and business partners.
  • Competition policy reform should focus on a company’s conduct and not on structural issues, like the amount of data a company holds, or its size. Nevertheless, all of the options under consideration in the IIA would allow the European Commission to impose behavioural or structural remedies even in absence of any infringement. Enforcement of competition law should focus in particular on consumer welfare, not on protecting competitors.

The European Commission is expected to publish a legislative proposal to regulate digital services online later this year.

Read ITI’s full submission here.