How should the EU handle online platforms?

Speakers: Rogard Pascal, Gren Jörgen, Weibel Fabienne, Sorvillo Pia
Moderator: Drozdiak Natalia

On Tuesday 13th of October in Brussels, PubAffairs Bruxelles hosted a debate on how the EU should handle online platforms. The debate was moderated by Natalia Dordziak, Correspondent at The Wall Street Journal, while the discussants were Mr Jörgen GrenMember of Cabinet of Vice-President AnsipMr Pascal Rogard, Counsellor for Telecommunications and Information Society for the Permanent Representation of France to the European Union, Mrs Fabienne Weibel, Head of Public Policy at BlaBlaCar, and Mr Antanas Guoga MEP (ALDE/LT). The event was moderated by Natalia Drozdiak, Reporter at The Wall Street Journal.

In the first part of the debate, Natalia Drozdiak introduced the speakers, the theme of the debate and the main topics which the discussion should investigate into, by making reference to the European Commission’s public consultation on online platforms and their handling of consumer data. She then gave the floor to the discussants by asking their opinion on how and if online platforms should be regulated. The speakers could subsequently proceed to give their preliminary statements and discuss the issues at stake.

Mr Gren started by stating that the Commission is in a fact-finding mode as exemplified by the public consultations recently launched by the EU executive body, and further revealed that similar initiatives are on their way. Mr Gren explained that the Commission has taken notice of online platforms as central entities in EU citizens daily life as well as for SMEs. He also acknowledged that a wide-spread use of online platforms lead to new questions, such as “gatekeeping”, market power, control of access to online markets, remuneration of players, transparency of conditions, pricing and advertisement. As Mr Gren explained, the questions currently faced are compounded by the fact that the current legislative system is outdated  to tackle such developments. Mr Gren added that such aspects have led to a discussion about online platforms with special regard to their responsibility, duty of care, and handling of illegal content.  Mr Gren concluded his opening statement by listing the main topics covered by the current public consultation, namely the role of platforms, with particular regard to the domains of transparency, use of information and access, especially for SMEs, the tackling of illegal content and liability of platforms, specifically the understanding of what the e-commerce intermediaries liability limits are. The third part of the consultation concerns the use of data and cloud systems as notably the flow, access and localization of data are relevant phenomena in the IT sector. He finally said that the last part of the public consultation regards the collaborative economy not only in terms of service development, but also in terms of consumer rights and regulatory concerns.

Mr Rogard started by highlighting that France was among the countries to ask the Commission to investigate the role of online platforms, as they have become new and important players in the economy. Mr Rogard agreed with Mr Gren that online platforms play an important roles as “gatekeepers” and that it would be important to understand their implications in the digital economy. He continued by considering that we have first to wait the results of the consultation launched by the Commission before deciding on which manner online platforms might be regulated. Nonetheless, Mr Rogard revealed that the debate within France has highlighted some concerns. For this reason, France has recently put forward a public consultation on a draft legislation which should seek to increase the transparency of online platforms vis-à-vis the consumers. Mr Rogard went on to list a few examples of the initiatives present within the draft legislation, namely the addressing of consumer data and obliging platforms portability to assist in the transfer of such data to other platforms.. Mr Rogard clarified that although the draft legislation will be discussed in the French Parliament, it would not be a B2B initiative, as B2B requirements would be better addressed at the European level. A further concern Mr Rogard revealed is the adequacy of current competition law to address issues related to online platforms. By drawing on the example of the Google case, Mr Rogard questioned whether a fast track procedure would be beneficial for digital competition law cases. Mr Rogard concluded his opening statement by questioning whether lessons could not be learned from the telecoms sector in order to drive competition and access to the digital market share.

Mr Guoga opened his statement by praising Vice-President Ansip for his progressive attitude towards the Digital Single Market. Mr Guoga added that he believed that the Digital Single Market would be beneficial for European citizens, especially for the young part of Europe’s population. He went on to question the over-regulation of business and questioned how that had effected competition, as, most of the time regulation had the contrary effect than its initial intentions. Mr Guoga acknowledged that the digital world is developing fast and urged therefore the legislation to remain flexible in order to not impede the competition increase, especially in terms of SMEs access. Mr Guoga concluded his statement by reflecting that online platforms are in essence services, and their regulation if need be should be based on evidence and only after thorough impact assessment. He also added that regulating platforms in a fair and proportional manner would be a difficult task for European institutions.

Mrs Weibel opened her statement by describing the operations and functioning of BlaBlaCar, attributing its success to the cost-effectiveness, access and safety for consumers. Mrs Weibel went on appreciating the fact that the Commission is focussing on the domain of online platforms as their business models are successfully growing across all sectors. Nonetheless, she urged caution on regulating online platforms due to the multitude of typologies and formats which online platforms and sharing-economy companies can take. In this regard, Mrs Weibel made specific comments about the current public consultation and the definition of platform which the Commission adopted as, according to her view, in  the one hand, it is a good technical definition, while in the other hand, it may incur the risk of  not differentiating between economic sectors, business models and functionalities. Mrs Weibel reminded the audience that online platforms are already being regulated, specifically by a consumer protection and privacy requirements angle, contrarily to a recurrent claim which states the contrary. She concluded by remarking that, in her opinion, the Commission should not only focus on the fact that there are legislation gaps, but also open the debate on the most appropriate means to address them.

A first point of discussion concerned the legislative gaps how these should best be addressed.

With regard to this topic, Mr Gren reiterated that the Commission, through the Digital Single Market strategy, committed itself to have a thorough understanding of the issue. He explained that the current public consultation is an exercise to define the problem and gather evidence, in order to understand where gaps may need addressing. Mr Rogard reiterated that the French government believes that some issues need to be tackled when dealing with online platforms, specifically referencing to a fast track procedure for competition law claims, and the need to investigate commercial restrictions that online platforms may impose. Mr Rogard concluded by stating that a general regulation would not be beneficial, and believed that the different sectors, along with the development of innovation and the economical and societal significance of online platforms, would have to be respected. Mr Guoga stated that at the moment he did not see any substantial legislation gaps as that there are already laws that are applicable to online platforms. He added that it would be important to first fully understand what online platforms are, as otherwise one would unnecessarily risk impeding their development and innovation. Mr Guoga added that due to the way online platforms operate, they are consistently being self-regulated, predominantly through customer trust and use Mrs Weibel stated that the benefits of regulation would really depend on the content of the regulation proposed. She believed that regulation stances should not be tailored according to the players, but rather to sectors and business models. She further added that the real difficult task for the legislator is to find commonalities within the various models. For this reason it would be more reasonable to look at sectors and sets of issues. Mrs Weibel concluded by stating that mapping the development of  the services that online platforms currently provide might help to find clear definitions.

A second point of discussion looked at whether different approaches to addressing online platforms are being developed in Europe.

Mr Gren acknowledged the fact that the French government adopted a novel approach in its recently published draft legislation, although he also stated that there is already a fragmentation in the Digital Single Market (DSM) and that a series of national diverging initiatives may hinder the integration of the DSM. Nonetheless, Mr Gren praised the fact that certain provisions in the French draft legislation were made in relation to developments happening at an EU level. Mr Rogard clarified that it has been clear since the beginning of the French legislation drafting that there should have been a complementarity with the Commission’s approach. In fact, the draft legislation provided some provisions on consumer rights in the digital areas, instead of specifically regulating online platforms. Additionally, Mr Rogard clarified that online platforms, and the regulation thereof, formed only a small part of the French consultation. Mr Rogard also remarked that the French government would actively participate in the current public consultation launched by the Commission by providing the evidence emerged during the legislative activities. On the same issue, Mrs Weibel added that further European harmonization would be welcomed, specifically in areas such as VAT and payments services, as online platforms have become payment intermediaries in their business operations. Mrs Weibel concluded by stating it may be advisable to achieve such harmonisation before new regulations are  brought about.

The final part of the debate and the Q&A session also covered the following issues: the Commission’s standpoint on platforms, the individual member states countries approach, increasing transparency of online platforms, using B2B online platforms to help the real economy and increase efficiency and productivity, the multitude of online platform definitions arising from different legislative initiatives, ensuring artistic creators and performers receive fair remuneration in the digital world, impact of online platforms on the informal economy, regulation of online platforms according to sector, competition law proceedings.

Do you want to go further into the issues discussed in our debate? Check our list of selected sources which we have provided for you 

Digital Agenda for Europe – Consultations

Public consultation on the regulatory environment for platforms, online intermediaries, data and cloud computing and the collaborative economy

Regulatory environment for platforms, online intermediaries, data and cloud computing and the collaborative economy

Commission takes first steps to broaden access to online content and outlines its vision to modernise EU copyright rules

Allegro Group Blog

Real Time Brussels – Wall Street Journal

Wall Street Journal – Topics, Natalia Drodziak