Luke Golding, commercial technology senior associate at law firm Kemp Little, assesses the potential implications of the Digital Services Act
The European Union is currently developing a new legislative proposal, which is aimed at imposing greater levels of regulation on online platforms and modernising the current legal framework for digital services across the European single market.
Major regulatory reform in this area is arguably long overdue, as the last significant attempt to regulate digital services came in the form of the e-Commerce Directive of 2000.
However, the digital landscape in 2020 is dramatically different to what it was at the turn of the millennium.
The last twenty years has brought a dramatic change in the way individuals interact, communicate and consume digital services online; with the extraordinary growth of online marketplaces, social media and search engines.
In many respects, the existing legal framework has struggled to keep pace with that change.
Proposals are therefore being explored by the EU to modernise the legal framework applying to digital services and those proposals currently take the form of the Digital Services Act (DSA).
As things currently stand, the DSA will seek to introduce two new ‘pillars’ of regulation:
- The first will require digital service providers to take greater levels of responsibility for tackling illegal content, disinformation and for the third-party content that they host on their platform;
- The second will more heavily regulate very large online platforms, who are deemed to be acting as ‘gate-keepers’, in a stated effort to prevent those platforms from abusing their market position.
It is the second of those pillars that hit the news in recent weeks, for its potential to impact the travel industry.
This is following reports that the EU is debating guidelines that would classify both Airbnb and Booking.com as ‘gatekeeper’ platforms.
We don’t yet know precisely what new rules the EU will seek to impose upon ‘gatekeeper’ platforms, but early indications suggest that measures could include:
- the restriction or prohibition of certain unfair trading practices;
- a prohibition on the platform giving preferential treatment to its own products and services;
- restrictions relating to the imposing of commercial conditions on users of the platform, that have little connection with the underlying contractual relationship;
- restrictions on online advertising services; and
- the ability for a regulatory body to impose tailored measures, on a platform by platform basis.
At this stage, the thrust of the proposals seems to be aimed at curbing the power and market position of very large, gatekeeper, platforms; partly to promote the growth and development of wider businesses and SMEs.
However, the suggestion that the scope of those regulations will extend to cover the likes of Airbnb and Booking.com has been met with criticism; with the suggestion that the proposals will overly handcuff those platforms, to the benefit of well-funded industry disruptors.
Whatever the outcome, the new regulations will be of interest to many in the travel industry – whether from the perspective of the very large platforms who face greater regulation or the businesses who feature their services on those platforms and who may gain additional rights or protections.
Either way, we don’t have too long to wait before more light is shed on the EU’s proposals.
The European Commission has stated that it intends to publish draft laws in December 2020; so, we should have a great deal more clarity as to what the new regulations will do, very soon.