The European Commission is in the process of crafting the Digital Services Act (DSA), an update to the eCommerce Directive adopted in 2000. The DSA is an attempt to set the rules of the road for online platforms, big and small, for the foreseeable future. Given the growing importance of digital platforms to many parts of the EU economy, it is critical that EU policymakers get the DSA right. As such, there are at least four key provisions this framework should include.
First, the DSA should clarify the rules around liability and apply them consistently to online services because the existing rules omit some services. In particular, the DSA should abolish the existing distinction between “active” and “passive” online services, as in practice, this does not account for the diversity of online services or the degree to which they can effectively monitor content. The DSA should extend liability protections to all online services for content they neither produced nor had actual knowledge of being illegal. In addition, the DSA should refrain from requiring online services to remove online content that would be lawful offline, such as certain forms of disinformation and hate speech, and instead seek to address potential harms from these issues through voluntary codes of conduct developed in partnership between the public and private sector.
Second, the DSA should hold companies responsible for the timely removal of illegal content once they learn about such material on their services. While companies should not be liable for third-party content, the DSA should create penalties for service providers that consistently fail to respond appropriately to illegal content notifications, and it should require online services to provide more transparency about their policies and processes for responding to illegal content as well as the appeals processes available to users.
Third, the DSA should not allow EU member states to enforce competing content regulations laws in other EU countries or outside the EU. These laws vary considerably across the EU and allowing each EU member state to set its own standard would create conflicts between jurisdictions and negatively impact free speech online.
Finally, the DSA should not impose additional regulations on large online platforms. The Commission mistakenly believes that large online platforms harm European consumers and businesses, threaten EU sovereignty, and must be reined in with new competition tools. Many digital markets tend to be concentrated not because of anticompetitive practices, but because of network effects where the values of online platforms grow as they get larger. This growth results in diminishing costs, increased investment in R&D, and increasing value which largely benefits consumers, including through many free and low-cost online services.
The DSA represents a chance for the EU to modernize its approach to the data economy and reduce fragmentation of the digital single market. Getting these policies right will give the EU a chance to nurture scalable data-driven businesses that can lead in the global Internet economy.