DSA – a new framework for the Digital Economy for many years to come 

A fragmentation in the approaches between different Member States to monitoring illegal content online further highlights the need for an update. The EU is therefore working to upgrade its common liability and security rules for digital service providers. This work is now in its final phase, with the European Commission, European Parliament and the Council (the co-legislators) negotiating a final Digital Services Act (DSA) in trilogue discussions. This regulation is one of the priorities under the current French Presidency of the council of the EU, and intense negotiations are expected to reach a conclusion on the DSA before the summer.

In the ongoing trialogue, the Confederation of Swedish Enterprise urges policymakers to be mindful of the Commission’s original proposal and its intention to create a horizontal piece of legislation. The Confederation of Swedish Enterprise is particularly concerned by the many additional article proposals that were voted through just at the final stage of the legislative work. These concerns particularly apply in the case of the European Parliament’s version of the DSA, which risk slipping through the negotiations or otherwise being used as bargaining chips in the trilogue discussions. For businesses, it is important that all new regulation is preceded by careful impact assessments to ensure that, inter alia, proportionate and predictable rules contribute to innovation and a good investment climate. Such analyses have not been carried out on several of the new articles, which justifies a restrictive approach.

Among the new article proposals voted through by the European Parliament in its version of the DSA are a ban on dark patterns and a ban on certain targeted marketing. The Confederation of Swedish Enterprise has already commented on the ban on targeted marketing, as the European Parliament had also voted through the corresponding amendment at a late stage ahead of the ongoing trilogues on the Digital Markets Act (DMA). The Confederation of Swedish Enterprise believes that in maintaining the horizontal character of the DSA rules on marketing and the protection of individuals’ personal data should not be addressed in the DSA (nor the DMA) but rather in other vertical legislation.

Businesses need principle based and technology neutral regulation that will remain relevant over time. It has therefore been important for the Confederation of Swedish Enterprise that the existing principles in the e-commerce Directive are maintained, something that the co-legislators seem to agree on. This means that the current limited­ liability regime for intermediaries is maintained, and that no general obligation to monitor illegal content should be introduced. Similarly, the co-legislators agree to maintain the current principle of origin, which makes it easier, for small- and medium-sized enterprises in particular, to expand and scale up business activities quickly, without the need to adapt to specific laws in other Member States.

The Confederation of Swedish Enterprise believes that the supervision of digital markets should be a public, not a private, function. The starting point should therefore be that operators receive an order that clearly states which content is illegal and should be removed. The Confederation of Swedish Enterprise therefore supports the clarifications proposed by both the European Parliament and the Council, which aim to avoid legal uncertainty or burdensome administration for operators receiving an order. This is particularly important, as such orders may also come from authorities in other Member States. For example, it is relevant that the order contains a direct reference to the appropriate URL and that - where there are several alternative addressees - the order should be addressed to the recipient best placed to act upon the order. The Confederation also supports the action and notice mechanism that allows for others to flag content as illegal. At the same time, however, we would like to highlight that the possibility for ‘any individual’ or ‘entity’ who ‘believes’ that information may be illegal risks creating unintended consequences such as mistakes or misuse. We would therefore encourage the co-legislators to put in place safeguards to prevent such misuse.

In order to combat illegal content online, the DSA proposes new obligations for digital service providers by introducing progressively stricter requirements on transparency towards public authorities and end-users. Sharing information is always a sensitive topic as it raises concerns over the disclosure of potentially sensitive business information. Companies’ data sharing policies reflect, among other things, many complex issues and jurisdictional challenges such as customer integrity protection, compliance with data protection rules, commercial considerations, and interoperability issues. The adopted DSA version must thus ensure for proportional and clear transparency requirements that are equipped with the appropriate safeguards and aligned with the existing Union law.