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  • Writer's pictureEUEW

The Digital Service Act

Setting the legal frame for a level playing field in an innovative and competitive digital single market respecting European values.

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The E-Commerce directive facilitated the rapid and widespread development of intermediary digital services over the last decade, which had a huge impact on electrical wholesalers: On the one hand, electrical wholesalers were confronted with unfair competition from products imported from third countries via online platforms in third countries without establishment in the EU, which did not comply with European and national rules and obligations on safety and taxation. On the other hand, the use of digital tools led to new business models in electrical wholesale and the development of B2B platforms, new digital services for business clients and customers and the possibility to offer these services on a digital single market. The COVID pandemic with its restrictions on movements and personal contacts and the challenges resulting from a more circular and sustainable economy further stimulated the digitalisation in the ecosystem of electrical wholesalers.

For these reasons the political debate and formulation of legal proposal to update the E-commerce directive has retained the attention of the EUEW, starting with an DSA advocacy call on 2 September 2019 to present the first stages of policy formulation regarding the review of the E-commerce Directive (and of which the presentation is available in the member section of the website).

In a second DSA advocacy call on 23 March 2021, we presented the EU Commission's legal proposal of the Digital Services Act (DSA). This proposal establishes a comprehensive horizontal framework with harmonised rules for all Intermediary Online Service Providers (IOSP) including cloud services, web hosting services and online platforms (online marketplaces, content sharing platforms, social networks and app stores). While the Commission proposal maintains the exemption of liability of the E-Commerce directive, it sets-up a set of harmonised due diligence obligations, which have to be respected by the IOSPs and are cumulative and differentiated according to their type and their impact. The due diligence obligations relate to transparency and reporting requirements, the cooperation with authorities, the interaction with users and the respect of their rights and the handling of illegal content. Online platforms in third countries targeting the EU market and without establishment in the EU will have to appoint a legal representative in one of the EU member states and thus have to respect the due diligence obligations. Further details can be consulted on the Commission webpage.

The proposal of the DSA goes currently through the ordinary legal procedure at the European Parliament (EP) and the European Council. The state of affairs of the legal dossier in this procedure was presented at the EUEW Advocacy Call of 27 June 2021.

Of particular interest for electrical wholesalers is that the draft report of the European Parliament sets stricter and clearer rules for the liability of all online marketplaces (B2C platforms) and specific ones for online platforms in third countries. Further, the report establishes requirements on online marketplaces concerning the assessment of the reliability of the traders using their services and the publication of specific information on those traders (Know Your Business Customer), including checks whether the information given is reliable, random checks on products and requesting traders to demonstrate that compliance of their products. For hosting services strict timeframes are set to remove illegal online content after having received a notification.

Further amendments which may be of interest for electrical wholesalers are the following:

  • the draft EP report does not exclude micro and small enterprises from the due diligence obligations for online platforms while the Commission does,

  • while the Commission establishes the threshold for very large online platforms to those online platforms reaching more than 45 million consumers in Europe, the EP report sets a threshold of a turnover of 50 million €.

A question still be answered is whether the due diligence obligations would apply to B2B platforms.

EUEW, CECAPI and Lightening Europe exchanged information and views on the DSA and the state of affairs in the ordinary legal procedure on 1 July. It was agreed that unfair competition from products not complying with EU legislation should be addressed and a level playing should be achieved. The amendments of the EP draft report related to stricter and clearer rules on liability for online platform would go in the right direction. The threshold for very large online platform of 50 million € may cause concern and the threshold based on consumers is preferred. A further concern is the short period of 6 months after publication in the Official Journal for the entry into force and application of the DSA.

It was agreed at the conference call to look into the amendments to the draft report of the EP, which were due by 1 July. After the summer break a further conference call will be organised to discuss the amendments and the need of a common action.


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