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Regulating the Internet: Tighter Restrictions and More Accountability

Digital Services Act on the horizon for end of 2020


In March 2020 The European Commission launched a public consultation on a proposed new Digital Services Act package, which could have significant implications for online operators and all those impacted by their activities. The consultation, which is open until 8 September 2020, covers a wide range of issues including online harms, online advertising, online competition, smart contracts and governance. A key part of the consultation and subsequent legislative process will be a review of the current limitations of liability enjoyed by online intermediaries for user-generated content and the need for increased regulation for large gatekeeper platforms.


The EU Commission is set to announce the Digital Services Act 2020 later this year in order to 'better regulate the internet'. Yes, you read that right and no, it actually isn't ridiculous. For those of you that have never given the topic much thought, this isn't that shocking.


The legal framework for digital services has been unchanged since the adoption of thee-Commerce Directive in the year 2000. Ever since, this Directive has been the foundational cornerstone for regulating digital services in the European Union. Alongside the EU GDPR (General Data Protection Regulation), this e-Commerce Directive has successfully regulated the internet for over twenty years, but the ever-changing nature of modern technology means there are more stringent measures required. With the aim of strengthening the market for digital services and harbouring innovation and competitiveness online, the new Act will replace the e-Commerce Directive 2000.


The new Act attempts to protect users from misinformation, hate speech and aims to ‘level the playing field’ of power for tech companies. The scope of the act and its basis will no doubt provoke some heated conversation, particularly since social media platforms have commenced "fact checking" posts (whatever your view of the Minority Report style direction of the world).


The objectives of the Act?


To enable broader reform, the EU Commission has addressed a need to modernise the existing Directive. There are two main targets for the Act:


1. Clear rules and responsibilities of digital services to address the risks faced by users and protect their user rights by:

  • Making platforms liable for user content and online disinformation;

  • Avoiding obstruction of the fundamental right to freedom of expression; and

  • Develop a more effective regulatory system across Member States supported at the EU level, where Member States can deal with illegal content, goods or services online.

2. Keep ‘ex ante rules’ to ensure large online platforms acting as gatekeepers remain fair and contestable for small businesses, new entrants and start-ups by:

  • 'Levelling the playing field’ by giving consumers increased choice;

  • Ensuring the EU single market for digital services remains competitive; and

  • Including additional rules for online platforms on self-preferencing, regulatory obligations, dispute resolution and personal and non-personal data access obligations.

Supposedly, by increasing the liability and safety rules for digital platforms, services and products means giving greater choice to users. Apparently it should also boost innovation.


The Takeaway


Just as the EU GDPR applies to entities, minds must also be turned to the new regulations and what it will mean for businesses online.

The prospects of the Digital Services Act mean businesses should consider:


  • The binding consequences (if any) of the new Act;

  • The compliance they already have with any EU GDPR entities and users;

  • The ACCC and Digital Platforms Enquiry from earlier this year;

  • Competition and market regulation in a modern tech world; and

  • How to best equip their business to adhere to user data and information protection.


Watch this space for updates regarding internet regulation and how it will actually affect Australian businesses.



If you would like to speak to someone about content publishing, cyber security or the potential for the Digital Services Act to apply to you, you can send us an email to info@melbournelawstudio.com.au or book a confidential and obligation free consultation via our website www.melbournelawstudio.com.au.


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