The EU Sets a Course for a New Digital Future

Laura Groenendaal,
Susan Ness,
Karen Kornbluh
GMF Experts React to the Digital Markets Act and Digital Services Act 

GMF Experts React to the Digital Markets Act and Digital Services Act 

What Are the Digital Markets Act and Digital Services Acts?

Laura Groenendaal, Research and Projects Associate, Brussels

The proposals for the Digital Markets Act (DMA) and Digital Services Act (DSA) are the European Commission’s ambitious bid to shape Europe’s digital future. Together with last week’s European Democracy Action Plan and Wednesday's EU Cybersecurity Package the proposals are part of Von der Leyen’s so-called Europe’s Digital Decade that is characterized by digital sovereignty to catch up with the United States and China in the digital domain. By leveraging its regulatory power, the Commission’s proposals provide ex ante rules to boost the EU’s digital market and innovation by creating a level playing field and stimulating competitiveness, and to protect European citizens’ fundamental rights by tackling illegal content and creating greater transparency of digital services. Violations of these rules can lead to significant fines; 6 percent of global annual turnover in the case of the DSA and 10 percent for violations of the DMA. 

However, critical voices in Europe expressed concerns about the potential negative impact of the proposals on the transatlantic relationship as the rules will primarily target U.S. tech giants. Others point to the need for stronger enforcement policies and collaboration with the incoming Biden administration.  

 

What Are Some of the Pros and Cons of the Proposed Legislation?

Susan Ness, Distinguished Fellow, Washington

The European Commission has taken a major step in proposing comprehensive regulations to address online platform behavior that will have global impact, as did GDPR, its privacy standard. Great Britain also just announced its online safety bill. With the Biden administration and Congress tackling platform governance in 2021, the time is ripe for greater coordination on both sides of the Atlantic to align online governance frameworks based on shared democratic values. That would improve the online experience for users, enhance enforcement, and avoid further fracturing of the internet with competing standards.

There is much to applaud in the DSA: It prioritizes transparency with robust accountability. It mandates disclosures and redress for user posts erroneously deleted and requires transparency around advertising. It gives vetted researchers access to key information to investigate platform behavior. And it requires very large platforms to conduct risk assessments of societal impacts and mitigate them. Independent auditors evaluate platform performance.

Provisions of the DSA can be improved during the upcoming debate. Greater stakeholder engagement to update the rules of the road would increase agility in a rapidly evolving digital ecosystem. Finetuning is needed to ensure that the notice and action rules do not inadvertently curtail free expression. And overlaying the DCA and DMA on top of all of the recent EU digital marketplace regulations may weigh heavily on innovation and consumer choice.

The Commission has advanced the ball on platform governance.  It is time for the U.S. to join it on the field.

Related Work:

 

Why Is the DSA and DMA needed now? 

Karen Kornbluh, Director, GMF Digital

The Digital Services Act and Digital Markets Act won't be law for years and won't be translated enforced for some time after that. The digital world will continue to evolve in the meanwhile. But with the Democracy Action plan released last week, they provide a roadmap for how to move beyond the current system of whack-a-mole which is now clearly insufficient for restoring integrity to the information ecosystem.

As the coronavirus creates real urgency around the need to curb disinformation and lift up the voices of credible scientific experts, it's increasingly clear that what's needed is to change the incentives of the major players.

The U.S. and Europe have different legal contexts, but the EU’s short-term proposal to enforce their disinformation code of practice through risk assessments, transparency, and accountability—like the code proposed by GMF’s Digital New Deal—could be a point of transatlantic cooperation. The EU’s crisis protocol—plus a circuit breaker—would help ensure dangerous disinformation or harassment is addressed before it causes harm.

Related Work:

The experts above are available for further comment or analysis on the DSA/DMA and other related topics. For more information, please reach out to [email protected].