Sat. Aug 13th, 2022

Brussels, 5 July 2022

Today marks a historic moment in digital regulation with the landslide vote by the European Parliament adopting the Digital Services Act (DSA) and Digital Markets Act (DMA) which I have been working on together with my teams from the very first day of my mandate.These two Acts, agreed upon in record time, have resonated around the world as landmarks – with front-page media coverage in many countries and even high-level political acknowledgements including by a former US President.The EU is the first jurisdiction in the world to set a comprehensive standard for regulating the digital space. 

We have created a common framework for digital services, which must be respected in the same way everywhere in a single market of 450 million consumers.

Europe is the first single digital market in the “free world”, with clear and predictable rules

Europe is the first single digital market in the so-called “free world”.

And in our European single market — which is also one of the largest democracies in the world, if not the largest — the DSA and the DMA will strengthen the rule of law and provide better protection for our citizens and provide new opportunities for our businesses in the digital space.

This means in concrete terms:

  • New strong obligations to tackle all forms of illegal content: counterfeit or dangerous products, incitement to violence, hate speech; as an intermediary, you might not be liable, but certainly you need to be responsible;
  • An innovative framework for the protection of fundamental rights and the fight against harmful content and disinformation;
  • More trust and protection for consumers in online marketplaces;
  •  More protection for social network users, especially children;
  • More opportunities for innovative businesses and a wider choice of innovative products and services;
  • A new framework for online advertising to limit the use of data and protect the most vulnerable users, especially children;
  • And finally, one point that I think is essential: opening up the “black box” of algorithms that are at the heart of platforms’ systems.

The DSA and DMA will allow us to have more transparency, more information and if that is not enough, to go directly to inspect the these “black boxes”  to find the information that the regulator needs to ensure the implementation and monitoring of platform obligations. Also vetted researchers will gain access to data to conduct research that will support our enforcement tasks.

Turning the page on “too big to care” platforms

Ten years ago, a page was turned on the so-called “too big to fail” banks.

Today, a new page is being turned, that of the “too big to care” platforms.

Russian disinformation, the revelations about the Capitol Hill attack, online harassment and hateful content… demonstrate the urgency of the DSA.

The difficulties experienced by SMEs, particularly against the abuses of gatekeepers, which undermines fair and free consumer and business choice, the race to conquer the Metaverse, etc., remind us of the urgency of the DMA.

In the future, very large platforms will have to perform an in-depth risk assessment and propose adequate measures to minimise these risks.

Gatekeeper platforms will have to finally adapt their technologies and business models to give more choice to consumers and stop creating obstacles to smaller innovative tech companies: no need to wait for a case by case decision, their obligations of interoperability, sideloading, no self-preferencing and more are by now clearly spelled out and will apply immediately. 

Enforcement is key

Introducing new obligations on platforms and rights for users would be pointless if they are not properly enforced.

The new harmonised rules will apply directly and uniformly anywhere in Europe. The Commission’s specialised teams will centrally supervise very large platforms and very large online search engines as well as gatekeepers, coupled with effective and dissuasive sanctions.

Each platform, big and small, will have to have a legal representative in Europe. So we will now know who to call if there is a problem. And each Member State will have a regulator with the necessary powers to enforce the rules. Orders sent by national public authorities will be more effective to tackle illegal content and get information about the wrongdoer, in particular cross-borders. We will also rely on a network of trusted flaggers, such as NGOs, hotlines or rightsholders, to ensure that platforms react to the flagged illegal content as a priority. Class actions against platforms breaking the rules will be made easier, and damaged consumers can be compensated.

New powers for the Commission to investigate and sanction platforms

For the first time, the European Commission will become the supervisor of “gatekeepers” and very large platforms and very large online search engines.

Under the DSA, the Commission will be able to apply supervisory fees on very large platforms and very large online search engines to cover the costs of these supervisory and enforcement tasks.  

Within the Commission, my teams will be responsible for designating these platforms, monitoring the application of the new rules and enforcing them – including new powers to investigate and sanction platforms.

Sanctions will be gradual and unprecedented in their scope. Fines will amount to up to 6% of the global turnover of the conglomerate for DSA violations.

And in the event of serious and repeated breaches, national courts can go as far as a ban on operating on European territory. These sanctions will be extremely clear.

Under the DMA, sanctions can go up to 10% of the global turnover and even beyond up to 20% that for repeated offenders, that may be also subject to the ultimate remedy of divestitures and structural separation when they systematically undermine their obligations.

The direct enforcement by the Commission of these internal market rules against private companies represents a historic and exciting new step for the Commission in particular.

But we are not starting from a blank sheet. I have had the pleasure to note in my everyday work with DG CONNECT (Directorate-General for Communications Networks, Content and Technology)that it has rightly earned its reputation for the quality of its policy work and its deep technical expertise, and can also build on its long-standing experience in enforcing internal market rules, for example through the so-called Article 7 procedures for electronic communications, working closely with National Regulatory Authorities.

A sneak peek at the future organisation implementing the DSA & DMA

Dedicated teams within DG CONNECT will be organised around thematic domains – including the societal aspects, the technical aspects, and the economic aspects.

To name a few examples: issues such as risk assessments and audits will be handled by the societal issues team.

The technical team will take responsibility for issues such as interoperability of messenger services or the use of non-fungible tokens for product tracing, or the development of standards supporting the new rules.

Finally, the economic team will cover DMA-related unfair trading practices, such as data access or so-called FRAND conditions; or ensuring respect to the DSA-related liability exemptions or“know-your-business customer” rules for marketplaces.

As platforms do not create challenges in only one (societal, technical, economic) level, but problems appear usually in combination, these three teams will work closely together, coordinated by a sort of “program office” that will also deal with international issues and litigation.

Building up specific expertise

It is also clear, we will need to increase our staffing levels and build up specific expertise, in particular in data science and algorithms.

We have started to gear the internal organisation to this new role, including by shifting existing resources, and we also expect to ramp up recruitment next year and in 2024 to staff the dedicated DG CONNECT team with over 100 full time staff, combining both DSA and DMA – the DMA together with DG Competition.

A share of this head count will be financed, for DSA-related tasks, through a fee, which I initiated, that the Commission will collect from very large online platforms and very large online search engines to cover the additional costs needed for their supervision.

A high-profile European Centre for Algorithmic Transparency

Some of the new tasks in the enforcement of the new rules require sophisticated competencies, too.

Most prominently, the DSA contains wide-ranging rules on algorithmic transparency and accountability for online platforms, and important data access obligations for the very large ones. In order to assist the enforcement of these new DSA rules DG CONNECT and the Joint Research Centre will establish a high-profile European Centre for Algorithmic Transparency.

This new Centre will attract world-class scientific talent in data science and algorithms that will complement and assist the enforcement teams.

The new DG CONNECT teams dedicated to the DSA/DMA implementation, together with DG Competition, the Commission Legal Service and the JRC, and in cooperation with enforcement authorities in Member States, will make a powerful new digital regulator that has technology baked into its DNA from the start.

There will be a before and an after to the DSA and DMA.

Many thought that regulation would take years, would be impossible, too complicated, the lobbying too strong…

Today’s vote shows that, when we work together, much can be done in the general interest of Europeans.

We are ready.

Source – EU Commission