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#Tech, Media, Telecom

CERRE’s recommendations for the Digital Markets and Digital Services Acts

  • 30 November 2020
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The European Commission has published its proposals for the highly anticipated Digital Markets Act (DMA) and Digital Services Act (DSA).

CERRE released its research reports on the Digital Services Act and the Digital Markets Act, containing recommendations to foster safer, more competitive and fairer online markets and services.

Digital Markets Act

Defining Large gatekeeper platforms

The CERRE DMA report recommends a precise systematic framework of four cumulative criteria for defining large digital gatekeepers to which prohibitions and obligations should be imposed. To be categorised as gatekeepers, platforms should:

  1. Be large: based upon the number of unique users, time on site, or proportion of interactions;
  2. Hold a gatekeeper position on which users depend because the platform controls a high proportion of users with low ability or incentive to multi-home across different platforms, or switch between platforms;
  3. Enjoy enduring market power because of high entry barriers to  existing services due to network effects and the control of capabilities necessary for innovation within the digital economy, such as data;
  4. Orchestrate an ecosystem of products and services thanks to conglomerate presence across markets.

With great power comes great responsibility

Large gatekeeper platforms should be prohibited from imposing commercial terms and practices that limit competition and fairness. The DMA should prohibit conducts that prevent the mobility of users across platforms, as well as behaviours that unfairly leverage a gatekeeper’s position across different markets.

To increase digital markets contestability, platforms should also be subject to tailored and proportionate obligations, such as compulsory data sharing or services interoperability.

New ways of enforcement

The CERRE report recommends that the DMA be enforced by an EU institution to deal with the global presence of large digital gatekeepers. It calls for more participatory and experimental enforcement modes that reflect the characteristics of the digital economy.

When designing remedies, the authors state that all stakeholders should be involved (large gatekeeper platforms, their business users, consumers, competitors). Regulators should also make use of data-based technologies, artificial intelligence and other tools to ensure that large digital gatekeepers design their algorithm and applications according to the DMA rules.

“As much as we think about what should be done, we have to think about how we’ll do it. Having good rules is not enough. If we try to enforce these traditionally, it will simply not work in digital markets that evolve so quickly and often in an unpredictable manner.” – Professor Alexandre de Streel, Research Coordinator for the CERRE recommendations paper

CERRE’s DMA recommendations has been referenced by the European Parliamentary Research Service (EPRS) in its briefing “Regulating digital gatekeepers: Background on the future digital markets act“.

Digital Services Act

Europe’s rules governing online platforms’ responsibilities date back to 2000 when all agreed to impose as few obligations as possible on platforms to stimulate the development of the digital economy.

The CERRE research team identifies three priorities for the upcoming European Digital Services Act (DSA):

Every platform active in Europe should have legal representation in the EU

So as to ensure that no company active in the European market can avoid its rules, the DSA should apply to services provided to individuals or businesses in the EU. Companies that are not established in the EU should be required to designate a representative in the EU.

Rules should apply to all platforms in a proportionate way

Many online platforms have put in place voluntary measures to proactively detect and remove illegal content. The CERRE report argues that procedural accountability for platforms should now be an obligation written into European law, i.e. they should be obliged to have the right procedures in place to quickly detect and remove illegal content.

“The key here is to ensure algorithm-based detection systems protect European citizens and do not affect their fundamental rights such as freedom of speech. That is why we recommend that there must be a human in the loop and a court in the loop.”

The report also recommends that the DSA include principles to ensure regulators can access information held by platforms, such as on their content moderation and appeals records and the algorithms they use. This is of utmost importance given the information asymmetry between the digital platforms and the regulatory authorities. National regulators will need to be able to monitor the notice and takedown measures, the level of transparency in the process used by services, any evidence of due diligence in coordination with law enforcement, etc.

The DSA should set principles for information access. The authors assert: all platforms should abide by the same principles but the type of information, their level of granularity and the frequency of the reporting should be proportionate to the size and nature of their services.

“Platforms that represent a greater risk due to their nature and impact should be required to share more detailed information more frequently with regulators. Policy makers need to be wary of the sensitive balance that needs be found here to not kill start-ups and scale-ups in Europe.” – CERRE Research Fellow, Sally Broughton Micova.

The authors stress that there are some rules in place already with similar policy objectives and that policymakers should avoid duplication by ensuring cohesion and streamlining with existing regulation.

Public authorities should play their part

National regulators will have to play an active role in ensuring enforcement of these rules. Given the nature of digital services, coordination, cooperation and mutual assistance among national regulators will be crucial to enforcement and to their taking up new responsibilities that they are not used to. They will also require significant resources and means to carry such a colossal task.

The DSA should set out a formal mechanism, for instance with the establishment of an EU Board among the national supervisory authorities, for cooperation between national regulators. Cooperation among member state regulators and ones from non-EU states should also be encouraged due to the transnational nature of the services and the harms at stake.

CERRE recommendations have been featured, amongst others, in Politico, La Tribune, Le Soir, and La Libre.

Author(s)
Lauriane Giet
Lauriane Giet
Senior Manager
Communications

Lauriane was Senior Manager for Communications at the Centre on Regulation in Europe (CERRE) from April 2018 to December 2020. She led all aspects of the think tank’s communication, including relations with the press, online and offline communications.  

Previously in her career, Lauriane worked with Burson-Marsteller (BCW), a leading public relations firm, where she specialised in science and political communication. She has worked on numerous communication campaigns at UN, EU and national levels with a focus on Corporate Social Responsibility. 

She holds a Master in public relations and crisis communication from the IHECS (Institute for Higher Social Communication Studies). 

For media inquiries or requests regarding events or partnerships, you can reach us at info@cerre.eu

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