DSA: European Commission wants very large online platforms to pay for their supervision

Press conference by Executive Vice-President Margrethe VESTAGER and Commissioner Thierry BRETON, on the Digital Services Act and the Digital Markets Act in Brussels, Belgium on Dec. 15, 2020. [Alexandros Michailidis/Shutterstock]

While getting ready to enforce the Digital Services Act on very large online platforms, the EU executive has come back with a proposal to charge these big players a supervisory fee directly.

The EU digital chief Margrethe Vestager proposed charging the very large online platforms (VLOPs) to give the European Commission enough resources to monitor their compliance during the third political trilogue between member states,  the European Parliament and the Commission on Tuesday (15 March).

A similar mechanism is already in place with the European Central Bank, which charges a supervisory fee to all supervised banks parallel.

Although both the EU Council representing the member states and the Parliament resisted the proposal in the past, the respective lead negotiators, French Minister Cedric O and MEP Christel Schaldemose (Social Democrats), have shown openness to it.

However, the other political groups in the Parliament pointed out that an amendment including a supervisory fee was voted down during the plenary vote in January.

MEPs adopt Digital Services Act with significant last-minute changes

A large majority of MEPs voted in favour of the Digital Services Act on Thursday (20 January), after plenary amendments introduced important changes to the text.

Entirely delegating the enforcement of very large online platforms (VLOPs) to the Commission was a central point in the negotiations among member states. During the last trilogue, Internal Market Commissioner Thierry Breton made clear that the EU executive was getting ready for the DSA implementation.

On VLOPs designation, the negotiations are moving in the direction of the Council, putting the Commission, rather than national authorities, in charge of the process.

Moreover, MEPs agreed on moving the methodology to designate VLOPs to the recital, the preamble of a legal act that is meant to clarify the text rather than creating binding obligations, hereby giving ampler discretion to the EU executive.

DSA: enforcement for very large online platforms moves toward EU Commission

The European Commission will have ‘exclusive power’ to enforce obligations on very large online platforms, according to the most recent compromise text on the Digital Services Act (DSA).

Several other points were on the table of the high-level meeting, notably risk assessment, risk mitigation, online marketplaces, dark patterns, search engines. On these points, MEP Schldemose told her colleague in a public hearing on Wednesday (16 March) that positions were getting closer.

“We did not make specific deals, but on these topics, I believe it is possible soon to close them,” Schaldemose said.

On the risk assessment and search engine, the Commission is now expected to circulate a compromise text in the coming days. Provisions to clarify the inclusion of search engines in the scope was another top concern for the member states.

“On search engines, the Parliament seems open to including it in principle, but the question is what it gets in return,” an official of the European Parliament told EURACTIV. By contrast, on dark patterns, “the Parliament does not intend to move, so it waits for the Council to make a move on it”.

For what concerns online marketplaces, the Council’s position was largely accepted. The French EU Council presidency showed the willingness to delete a provision obliging platforms to conduct random checks to identify illegal products. The measure does not have a wide majority in the Parliament.

DSA: MEPs gear up for negotiations ahead of kick-off trilogue

The lawmakers representing the different political groups met on Wednesday (26 January) to iron down the political priorities in view of the first political trilogue of the Digital Services Act (DSA) that will take place on 31 January.

Schaldemose also mentioned there was an ‘exploratory debate’ on the compensation for platform users in case of infringement, online advertising, and recommender systems.

The principle of compensation was introduced in the Parliament’s text upon the initiative of consumer organisations, which however consider the wording too limiting as it only refers to direct damages, namely when there is a proven, direct relationship between the loss and failing to comply with the EU regulation.

“We welcome compensation but the current proposed wording might end up being a trap,” said Cláudio Teixeira, legal officer at the European Consumer Organisation.

“By focusing only on ‘direct damage or loss’ for consumers, this text might lead to a more stringent and difficult to prove right to redress than in already existing EU consumer law.”

The French presidency showed openness to accept the principle of compensation, but the wording was sent back to the technical level. The Council text already expanded the right to representation giving users the possibility to mandate a representative body like consumer organisation to challenge platforms in court.

On targeted advertising, the Council made clear it is only willing to accept the provisions protecting minors, upon insistence from the German government that circulated a compromise text last week. The Commission is now expected to draft a possible compromise on this topic.

Accepting these provisions would remove a major obstacle for the negotiations on the DSA’s sister proposal, the Digital Markets Act, which has a much more limited scope.

DSA parliamentary agreement set to hold in key committee vote

The major political groups of the European Parliament reached common ground on the Digital Services Act (DSA), which is set to be largely confirmed in a key committee vote as alternative amendments have so far gathered only limited support.

For recommender systems, the filtering platforms use to offer content to the user, the Parliament insisted with its demand to have at least one system that is not based on profiling, another topic that was sent back to the technical level with the rest.

Minister Cedric O requested a new political meeting at the end of March, which would leave only two weeks to nail down potential solutions in technical meetings.

“Let’s see if in two weeks something will magically appear,” the Parliament official concluded.

[Edited by Zoran Radosavljevic]

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