The Digital Markets Act (DMA) and Digital Services Act (DSA) proposed by the European Commission to curtail the ever growing power of digital giants in Europe are fit for purpose, in the EESC's view, provided they go hand and hand with the taxation of tech companies, better working conditions for platform workers and data governance.
In a package of opinions adopted at the plenary session last week, the EESC came out in favour of the DMA and the DSA proposed by the European Commission to revive competition on the internet.
DMA: it "does one thing only – but that's so much already!"
The DMA is a long awaited piece of legislation. "For over ten years EU representatives have been calling for a level-playing field with big online platforms," said Emilie Prouzet, rapporteur of the EESC opinion on the law. "With the DMA, the European Commission is introducing a process specifically designed for these very large players. And we do support, as a good solution for Europe, most of what they propose. The DMA deals with online gatekeepers, that's all it does – but that's so much already!"
The DMA targets the handful of huge platforms that effectively call the shots on the internet by controlling core platform services (search engines, social networking services, operating systems, etc.) that link a business and its customers. Because they very often function as a bottleneck, forcing all companies to use the same tool to reach the vast majority of their market, they are called gatekeepers.
With Amazon recording a USD 108.5 million turnover in Q1 2021 and Alibaba over USD 1000 billion in business volume in 2020, there is a need to redress the balance.
The DMA establishes criteria (turnover and capitalisation together with the number of users) to determine if a platform qualifies as such, imposes obligations to prevent them from abusing their power and lays down actions the EU will take (market investigations into alleged violations) to limit their dominance, with fines of up to 10% of the company's worldwide annual turnover.
While supporting the DMA in its own right, the EESC insists on the need to complete this legal ecosystem with regulations tackling the other crucial issues surrounding the digital economy.
The Committee vows to keep a very watchful eye on planned legislation to cover the taxation of Big Tech, working conditions for platform workers, consumer protection on global markets and other thorny issues that need to be addressed to make sure everyone can benefit – consumers and workers as well as businesses.
The DSA as a potential global standard setter
The EESC is also, on the whole, supportive of the DSA, which is intended to regulate services that have been shaping and transforming the ways people communicate, connect, consume and do business.
In the EESC's view, it is important to support the Commission's efforts to maintain uniform rules across the bloc in its efforts to make legislation "fit for the digital age", as this will give Europe greater leverage on the global stage.
"We must prevent the internal market being fragmented by a proliferation of national rules and regulations that could undermine the system and prevent all European companies benefiting from a strong single market," says Gonçalo Lobo Xavier, rapporteur of the EESC's opinion on the DSA.
The EESC argues that having common rules is also an opportunity for Europe to set global standards ensuring consumers a high level of safety and protection as regards online goods and content, much as the GDPR has done for data protection.
Current EU rules on digital services have remained largely unchanged since the e-Commerce Directive of 2000, while recent developments such as the spread of illegal and harmful products (e.g. counterfeit goods) and content (e.g. hate speech, disinformation and misinformation) have come to dominate the debate over online platform regulation in the EU.
European countries have started regulating online platforms and online intermediaries independently. Germany is amending for the second time a law on improving law enforcement in social networks first passed in 2017. In France, draft legislation on political separatism would enshrine in national law wide-ranging content moderation obligations for online platforms. Poland appears to be drafting social media laws to prevent platforms from removing content which does not specifically break Polish rules. Hungary is also working on legislation on content moderation and so are other Member States.
The DSA will require online platforms to do more to limit the spread of illegal content and goods and the largest platforms to provide regulators with greater access to internal data. It will also ensure people greater transparency over who targets them with online advertisements and how.
Data governance: sharing data the "European way"
With data becoming the "new oil" in today's increasingly digital economy, the European Commission is stepping in with measures to encourage safe data sharing under common rules across Europe.
The EESC stands firmly behind this proposal. The idea is to increase the amount of data available for re-use within the EU by allowing public sector data to be used for purposes other than the one for which it was originally collected. The creation of data intermediaries to handle the data in full respect of protective measures as a European alternative to the existing major tech platforms should inspire the necessary public confidence.
One key aspect of the regulation the EESC has focused on is the different treatment of data managed for commercial purposes and for "altruistic" purposes such as research and general interest, or the very interesting possibility of setting up cooperatives for data management where there is a pooling and exchange of data, as as a way of favouring SMEs, self-employed workers and the professions.
"This legislation offers a very interesting possibility of promoting a European digitalisation path, as the EU is at the moment the only organisation which is thinking seriously and in detail and about how to manage digital data," said Giuseppe Guerini, rapporteur of the EESC opinion on the data governance proposal. "We don't want to go down the path of an excessive liberalisation, and we also want to make sure that data is not used for purposes which are not subscribed to by the citizens. We encourage the EC to continue down this path with the necessary support for the implementation of this system of data governance."
According to European Commission estimates, the new measures could enhance the value of data in the EU by up to EUR 11 billion by 2028.
To learn the details of the EESC proposals regarding the DMA, the DSA and data governance regulation visit the following pages: