European Commission launches consultation on Digital Services Act package
The European Commission is seeking views on a new legal framework for the provision of digital services across the EU Single Market.

  

The European Commission is seeking views on a package of reformative legislation to shape the online world for individuals and businesses through implementing a new legal framework across the digital market. 

Consultation on the Regulation of Digital Platforms

On 2 June 2020, the European Commission launched a wide-ranging public consultation on the new Digital Services Act (DSA), a package announced by the Commission President, President von der Leyen in her political guidelines and in the Commission's Communication “Shaping Europe's Digital Future” of 19 February 2020.  The DSA proposes new rules to shape the future rulebook for digital services. The consultation runs until 8 September 2020.

The Commission is expected to release its proposals for the DSA in late 2020. This, if enacted, will represent the most significant piece of legislation in the digital market since the e-Commerce Directive. The Commission states that the aim of the DSA is to reinforce the single market for digital services and help provide smaller businesses with the legal clarity and level playing field they need. 

The consultation calls for views on the following issues concerning digital services and online platforms:

  1. How to effectively keep users safe online.
  2. Reviewing the liability regime of digital services acting as intermediaries.
  3. What issues derive from the gatekeeper power of digital platforms.
  4. Other emerging issues and opportunities, including online advertising and smart contracts.
  5. How to address challenges around the situation of self-employed individuals offering services through online platforms.
  6. What governance for reinforcing the Single Market for digital services.

 The Department of Business, Enterprise and Innovation has also launched a consultation to seek views from stakeholders on the DSA proposals, this consultation runs until 24 July 2020. 

The European Commission is building on achievements already undertaken to improve and adapt consumer legislation to keep pace with digital market developments. These improvements take place as part of the  Digital Single Market Strategy, which sets out the European Commission's vision for the best possible access to the online world for individuals and businesses.

EU New Deal for Consumers

Another pillar of the Digital Single Market Strategy is the EU "New Deal for Consumers" (New Deal) initiative which was announced in 2018. This is aimed at enhancing existing consumer protection rights and modernising consumer law to promote transparency online and protect online consumers.

The New Deal focuses on the following areas:

  1. Transparency for online consumers. Online marketplaces will have to inform consumers whether they are buying from a trader or a private individual and provide further information around issues including the parameters for the ranking of search results on platforms.
  2. Providing remedies for consumers through collective redress. The New Deal allows for qualified entities, such as consumer organisations, to seek redress on behalf of a group of consumers that have been harmed by an illegal commercial practice. Our litigation experts will be considering these collective redress actions in further detail through a follow-up article.
  3. Introducing effective penalties for violations of EU consumer law. The New Deal introduces 'GDPR' style fines for traders in breach of consumer law. For infringements affecting several Member States, national consumer authorities will be able to impose fines of 4% of the trader's annual turnover in each respective Member State.
  4. Tackling dual quality of consumer products. The New Deal will update the Unfair Commercial Practices Directive to make explicit that the misleading practice of marketing products as being identical across several Member States where the products are significantly different can be investigated by national authorities. 

One key part of the New Deal is the European Commission's Enforcement and Modernisation Directive (EU) 2019/2161 (the 'Omnibus Directive'). This Directive is required to be transposed into Irish law by 28 November 2021 and must enter into force in Ireland by 28 May 2022. 

The Omnibus Directive is one of the topics we propose to address in a series of articles on e-commerce legal developments over the next few months. 

If you need support preparing submissions on the Digital Services Act consultation or need advice on any aspect of e-commerce, please contact Leo Moore, Michelle Clancy or your usual William Fry contact.

 

Contributed by Michelle Clancy and Jack Feehan

Key Contacts

Leo Moore Partner

John O'Connor Partner

David Cullen Partner

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