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DSA Trilogue: Six Things Negotiators Must Get Right

· January 27, 2022

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Next week, EU negotiators will kick off the final negotiations on the Digital Services Act (DSA) proposal. The DSA will define what users can see, how consumers buy and interact online. It will frame how digital services operate and moderate content in a transparent way for years to come. Ambitiously, EU lawmakers want to “make the new gold standard for the world”. To make that happen here are six things negotiators need to get right.

Provide more user transparency and control 

Who is best positioned to decide on what people see online: users themselves or policymakers? Users and consumers engage with a wide range of content every day and have different preferences for what they want to see online. The European Commission and the Council of the EU want to strengthen transparency tools when it comes to content preferences and personalisation. The European Parliament, however, wants to go beyond this and introduce strict limits on targeted advertising. EU lawmakers will want to think twice when crafting  workable rules that keep in mind the interests of European small businesses, consumers, and news publishers. 

Protect the data of users and businesses

How would consumers, users, and businesses react if they knew that the DSA were to require platforms to grant law enforcement, “vetted researchers”, and “vetted not-profit bodies” access to their highly sensitive information? The DSA must further clarify this by including safeguards around confidentiality, the scope and nature of what data may be requested, the purposes for which the data may be used, and how that data may be accessed. Also, the processes and criteria to obtain the “vetted researchers” and “vetted not-profit bodies” status should be strengthened (e.g., by including transparency requirements on the funding that researchers may receive for their academic projects, and by giving platforms the right to appeal the vetting of a particular researcher). Calls to force platforms to disclose user data to NGOs and journalists should also be restricted to public transparency reports. The EU has been a standard-setter on data protection; let’s make sure that any obligation meets those standards, and is aligned with the existing data protection rules. 

Make marketplaces liable only for what they can reasonably verify

The European Parliament’s text requires online platforms to run “random checks on the products and services offered to consumers”. While lawmakers’ intentions are legitimate, such measures are impossible to put into practice given specificities such as the speed of upload and huge amounts of content to process. The measures therefore wouldn’t meet the policymakers’ objectives. 

If the DSA sets disproportionate liability and due diligence obligations, online marketplaces may become very cautious, especially in light of the risk of high fines — up to six percent of the platform’s annual turnover. In other words, online marketplaces might only allow large, established third-party sellers to offer products to users via their platform, as these present a lower risk of non-compliance. This could have adverse impacts, not only on small and mid-size enterprises’ (SMEs) ability to scale, but also on consumer choice and on pricing throughout the EU. 

Inform without overwhelming users

Users risk receiving an overwhelming amount of notifications; and intermediary services risk an unmanageable scale of transparency and user redress requirements. The DSA includes  “demotion” or “other actions” within the categories of content moderation decisions that users receive notifications for, or that could be contested. Notifications and redress should be focused on protecting free expression and be limited to removals or account suspension. If obligations are disproportionate, they will put content moderation practices at risk

Clarify how due diligence obligations work 

It appears the different institutions have different interpretations of due diligence obligations and “know-your-business-customer” (KYBC). Ambiguity can be detected between the positions of the European Parliament and Member States, and even each of their texts. It’s crucial that the DSA ensures that due diligence obligations are clear and unambiguous about who they apply to and how they apply. The obligations should remain reasonable and proportionate. 

Be channel-neutral 

Policymakers agree on ensuring a level playing field between the online and offline world. “What is illegal offline, is also illegal online” is their mantra. But the fervour of this ambition leads to the possibility of overreach. Online obligations might extend beyond those applying to offline or “brick and mortar” companies. 

As negotiators seek to finalise the negotiations on the DSA, hopefully they will ensure that Europeans can continue to enjoy all the economic and social benefits of digital services.

European Union

DisCo is dedicated to examining technology and policy at a global scale.  Developments in the European Union play a considerable role in shaping both European and global technology markets.  EU regulations related to copyright, competition, privacy, innovation, and trade all affect the international development of technology and tech markets.