European platform regulation is a multi-layered topic that spans several legal acts. These legal acts are of fundamental importance to IT lawyers, as they form the basis for understanding and applying the legal framework in the digital world. This is where it becomes particularly clear why IT law needs to think not only on a national level, but rather in terms of European IT law.
The following are some of the key pieces of legislation governing the regulation of platforms, websites and data in the EU.
Digital Services Act
The first step in European platform regulation is the Digital Services Act (DSA): The DSA is a proposal by the European Commission to create a modern legal framework for digital services. It is intended to strengthen the responsibility of online platforms and ensure that these services are secure and respect fundamental rights. The (DSA) is an essential part of a comprehensive regulatory package of the European Union to modernize and adapt the digital landscape in the EU.
The DSA sets clear rules to ensure that all digital services, including online platforms, protect their users from illegal content and harmful activities. The main objectives of the DSA are to create a safe digital environment, improve transparency and accountability of digital intermediary services, strengthen the protection of European fundamental rights and consumer rights, promote competition and innovation, improve legal certainty for digital service providers, and improve enforcement.
Impact on SMEs and website providers
- The DSA is not exclusive to very large online platforms (VLOPs) and very large online search engines (VLOSEs), but will have a significant impact on the entire digital economy.
- Companies can benefit from greater choice, lower prices and better access to EU-wide markets via platforms.
- The DSA’s requirements are tiered, with service providers with more than 45 million active users per month classified as “very large” and subject to stricter requirements than startups or SMEs, for example.
The DSA affects all online intermediary services that offer their services in the single market, regardless of whether they are established inside or outside the European Union. These include, among others, online marketplaces, social networks, Internet service providers or cloud and messaging service operators.
Importance of the DSA for SMEs
It quickly becomes apparent that the DSA is relevant to both SMEs and website providers when it comes to the topic of European platform regulation. The aim of the regulation is to create a fair and secure digital environment from which all providers of digital services should benefit. The graduated requirements are intended to help alleviate the burden on smaller providers compared to very large platforms and search engines. The DSA will be implemented in Germany by the Digital Services Act (DDG), which will replace the Telemedia Act (TMG) and NetzDG.
Digital Markets Act
The Digital Markets Act (DMA) is another important piece of legislation to promote fair and open digital markets in the EU. The DMA addresses the behavior of so-called gatekeepers – large online platforms with significant market power. It aims to ensure that these platforms comply with fair business practices and guarantee equal market access.
The European platform regulation is important for all commercial providers based or operating in the EU! On the one hand, with regard to their own obligations when operating digital services or selling digital products – but also in order to know their own options in disputes with “big players”.
Around European platform regulation, the Platform-to-Business (P2B) Regulation aims to create a fairer and more transparent environment for smaller businesses and merchants by regulating certain practices of online platforms. The regulation addresses the imbalance in business relationships between large online platforms and the businesses and merchants that operate on those platforms: The Platform-to-Business (P2B) Regulation is of great importance to small and medium-sized enterprises (SMEs) operating on online platforms.
In this P2B regulation, it strengthens the rights of commercial suppliers using online intermediary services and creates a fairer and more transparent environment for commerce. Below are some specific aspects of the P2B Regulation that are particularly relevant to small businesses:
- General terms and conditions and information obligations:
- The regulation requires that in case of blocking a trader’s account on a platform, the reasons for the blocking must be made transparent.
- Traders have the option of challenging a blocking or termination through a grievance procedure.
- Platform operators must formulate their GTCs clearly and comprehensibly and provide certain mandatory information.
- Out-of-Court Dispute Resolution:
- The regulation promotes the out-of-court settlement of disputes between the platform and the merchants operating on it.
- Platform operators must set up an internal complaints management system that can be used free of charge.
- Platform operators must also appoint two ombudspersons with whom they will cooperate in the event of a dispute.
- Disclosure of ranking parameters:
- Die Kriterien samt Gewichtung, die das Ranking auf einer Plattform beeinflussen, müssen in den AGB offengelegt werden.
- Platform operators must provide transparent information if the ranking can be influenced (for example, through special profile subscriptions).
The P2B Regulation thus addresses the challenges and disadvantages faced by small businesses on online platforms and provides mechanisms to address unfair business practices and ensure greater transparency and fairness.
These regulations of the P2B Regulation put small companies in a better position to assert themselves against large, market-dominating platform operators and offer them legal opportunities to protect and enforce their interests. In other words, small local providers who rely on platforms – for example, to market their own products or services (e.g., local restaurants or hotels) – are no longer at the mercy of them!
Further EU digital regulations.
The European Union has taken important steps in recent years to harmonize the digital single market and strengthen consumer rights. All these steps, which have already been implemented, have triggered a considerable need for advice among companies – in particular, the changes in contract law in Germany should be an urgent reason to review existing contracts (whether with consumers or companies!).
A central element of these efforts is the Fundamental Data Protection Regulation (GDPR), which came into force on May 25, 2018. The GDPR sets out the rules for the protection of individuals with regard to the processing of personal data and for the free movement of such data within the EU. This regulation builds on the high data protection standards that the EU has set for decades and also provides modern tools for international data transfers. These include adequacy decisions by the European Commission, pre-approved standard contractual clauses and binding corporate rules.
In parallel with data protection measures, the EU has also made important progress in the area of contract law to promote digital commerce and strengthen consumer rights. For example, the Directive on certain aspects of contract law relating to the provision of digital content and digital services was adopted on May 20, 2019. The member states of the European Union had to implement this directive by January 1, 2022. It regulates contractual relationships between providers and consumers in the area of digital content and digital services.
In the same period, the Directive on the Sale of Consumer Goods (Directive (EU) 2019/771) was also issued, which governs the contractual law aspects of the sale of consumer goods. This directive was also to be implemented in Germany by January 1, 2022, and has led to significant changes in German contract law. The aim of the directive is to strengthen consumers’ rights in the event of defects in purchased goods and to create a uniform level of consumer protection throughout the internal market. This directive has largely replaced the law on contracts of sale contained in the German Civil Code (BGB) and adapted it to the new EU requirements.
Data in the EU
The Data Act (DA) and the Data Governance Act (DGA) are two pieces of legislation on the subject of European platform regulation that focus on the regulation of data. While the DA aims to set the framework for access to and use of data, the DGA aims to promote the flow of data within the EU and between sectors while ensuring citizens’ data sovereignty. More on the Data Act with us.
AI and IT security
Finally, it is important to mention that the European platform regulation also provides for the regulation of artificial intelligence and IT security at EU level with a central role. It helps to ensure that the digital transformation takes place securely and in line with European values.
By setting standards for artificial intelligence and IT security, European platform regulation ensures that technologies are used for the benefit of all and creates a legal framework that promotes both innovation and the rule of law. On IT security, see our notes on the NIS2 Directive and the German NIS2 Implementation Act.
The EU is pursuing the topic of AI with attention. According to the EU Commission, its goal is to build trustworthy AI for a secure and innovation-friendly environment. To this end, the Commission has launched three interconnected legal initiatives in particular:
European Platform Regulation: Consulting and advising on Digital Law in the EU
Our law firm specializes in IT law and naturally positions itself when it comes to European platform regulation: A lawyer specializing in IT law is familiar with the complex legal situation in the field of information technology and can help small businesses understand and comply with the legal requirements and framework in the digital environment.
Professional IT contract law
Our specialist IT law attorney advises and represents companies in IT contract matters, particularly in relation to artificial intelligence and cloud services, in order to minimize legal risks and ensure compliance with relevant regulations.
Our law firm advises companies on IT law, with particular emphasis on the following points of advice, taking into account the topic of “European platform regulation”:
- Knowledge of the legal framework:
- A specialist lawyer can inform companies about relevant EU legislation such as the Digital Services Act (DSA), Digital Markets Act (DMA), Platform-to-Business Regulation (P2B), Data Act (DA), and Data Governance Act (DGA), and advise on how these laws affect business practices.
- Because of the tiered requirements of the DSA, depending on the size of the service provider, IT lawyers can help small businesses understand what specific duties and responsibilities apply to them.
- Compliance Consulting:
- IT lawyers can help small businesses develop and implement compliance strategies to ensure they meet legal requirements, especially those related to data privacy, consumer protection, and competition law.
- Contract Law:
- Assisting companies in drafting and reviewing contracts, particularly in the areas of IT and e-commerce, to ensure that they comply with legal requirements and protect the company’s interests.
- Dispute Resolution:
- In the event of disputes, IT lawyers can help companies resolve disputes, whether through negotiation, mediation or in court.
- Intellectual Property Protection:
- IT lawyers can also advise on the protection of intellectual property, specifically trade secrets, trademarks and copyrights in the digital or technological environment.
- Technology Transfer and Licensing:
- Specialist lawyers can also advise on technology transfer and licensing issues, which is especially important for technology-based companies.
- Cybersecurity and Data Protection:
- Advising on the implementation of effective cybersecurity measures and compliance with data protection regulations is another area where IT lawyers can provide valuable assistance.
The ever-changing digital landscape can be challenging for small businesses – especially when it comes to regulatory compliance. An IT lawyer can play a critical role here by providing legal clarity, minimizing the risk of legal issues and helping to achieve business goals within the legal framework.
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