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National initiatives risk derailing the DSA

Date

09 Mar 2021

Sections

Innovation & Enterprise

What is being proposed? 

In December 2020, Austria approved its national anti-hate speech law (“KoPI-G”) along with the ‘Hate on the Net Fighting Act’. German lawmakers are currently updating the network enforcement act (“NetzDG”). Hungary will propose new rules for the tech industry in the coming months. Other countries are rumoured to consider their own rules. Perhaps, most ironically, while the French European Commissioner is spearheading the EU-wide DSA rules, his home country is moving ahead with its own national rules. Back in January, Cédric O, the French Junior Digital Minister, announced “an amendment to the bill on republican principles, introducing content moderation obligations for social networks, in anticipation of the DSA.”

Why are multiple different rules in multiple countries a problem?

While it might sound surprising, there are more than 10,000 online platforms in the EU. Many will each have to comply with the EU rules and with the emerging patchwork of national initiatives creating barriers to their growth and increasing compliance costs. 

National rules do not mirror the new EU rules and are often contradicting the DSA. 

If we take the example of rules in France, the notion of “online platforms” as defined by the national Consumer Code, differs from the one suggested by the DSA. In practice this means that the type of companies falling under the French or European framework won’t be the same and due diligence obligations will differ considerably. 

Naturally, the French rules will not only apply to platforms established in France but also those established in other EU countries.

A cornerstone in the EU single market is the fundamental ‘country of origin’ principle which is set out in the e-Commerce Directive. This principle essentially means that companies that trade in the EU Single Market only have to deal with the rules and regulators in the EU country they are established in, rather than in each EU Member State. The French draft bill seems to jeopardize this important principle.

With the French example, we can see how a company might end up being subject to several, potentially conflicted national and EU laws. If we were to consider each distinct national initiative and consider how it contradicts EU efforts or creates additional burdens, we quickly see that the level of complexity and contradiction becomes unworkable. 

Needless to say, while it will be extremely challenging for companies to enforce so many different rules, it will be particularly burdensome for small and medium-sized enterprises (SMEs). 

What should be done? 

While national politicians’ concerns and impatience is understandable, the solution must be to prioritise the EU-wide Digital Services Act rather than rush ahead with conflicting national legislative initiatives. As the European Commission mentioned to the Austrian authorities, “while pursuing a legitimate policy objective, national measures in this field are likely to add to the existing legal fragmentation in the Single Market”.

If the European Commission wants to achieve its objective of harmonising rules across the EU, then they must prevent this patchwork quilt being developed across the EU and ensure that the DSA builds one unified framework to allow online platforms certainty, a clear set of rules and the avoidance of unnecessary costs of compliance and barriers to growth.

 

 

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