As had been announced in the Digital Single Market Strategy, the Commission has recently launched a public consultation on “the regulatory environment for platforms, online intermediaries, data and cloud computing and the collaborative economy”. This is a relatively new area for European public policy, and thus many of the questions are rightly aimed at documenting existing practices and helping the Commission to build its knowledge base on the topic. Commissioner Ansip has said that the Commission would “carefully consider if new measures are needed”, and apart from a possible revision of the 2000 E-commerce Directive (in the context of intermediary liability), no specific policy instruments have been so far put forward. Rarely has a policy issue been so open-ended ; therefore it might be informative to look at how other administrations are tackling the issue. In this blog post, we examine the French proposed legislative package (link in French) that was unveiled in late September and how it addresses the question of online platforms, comparing it with the Commission approach.
The Commission consultation defines “online platforms” as “undertaking operating in two (or multi)-sided markets, which uses the Internet to enable interactions between two or more distinct but interdependent groups of users so as to generate value for at least one of the groups.” This is an extremely vague definition. By contrast, the French proposed definition says : “[any professional provider of] activities classifying or referencing content, goods or services offered or posted by third parties, or to connect electronically several parties for the sale of goods, provision of a service, including unpaid, or exchange or sharing of a good or service.” Agreeing on a precise, clear definition of what is covered by the term “online platforms” would seem to be essential in order to set the right expectations and ensure legal clarity. For instance, it is currently unclear whether streaming services such as Spotify or Netflix would be covered by the Commission definition, considering they are technically not two-sided markets. Crowdfunding platforms would presumably fall under the definition, but are not mentioned anywhere else in the consultation.
Agreeing on a precise, clear definition of what is covered by the term “online platforms” would seem to be essential in order to set the right expectations and ensure legal clarity.
Transparency & clear expectations
The French proposals include a set of top-level transparency principles that would require online platforms to “deliver a fair, clear and transparent information about the terms and conditions of the service [proposed] and about the terms of referencing, classification and de-referencing of content, goods or services to which the service provides access.” Most online platforms already offer this information – so the aim of this measure appears to be to level the playing field from the top and ensure a consistent minimum level of transparency across all platforms. Transparency is crucial to clarify expectations both for the suppliers and the end-users of the platform, and prevent arbitrary and anti-competitive practices. Also proposed in the French draft legislative package is a new measure to address the problem of false user reviews, whereby the platforms would be required to specify whether public reviews or comments have been verified, and to set up a reliable verification system if they decide to do so. Again this would seem relatively sensible – false reviews are akin to false advertisement in the sense that it can generate confusion for the end-users, and create mistrust which ends up negatively impacting the whole ecosystem. We just have to ensure that online platforms do not end up forced into setting up a reliable (and potentially complex / expensive) verification system if they do not need to do so – but at the same time be transparent to their end-users about the level of verification that they offer.
Awareness raising and promoting best practices
A slightly more “exotic” proposal included in the French draft package is the idea of setting up “rating agencies” in the form of a new administrative authority. These would be responsible for ensuring that the online platforms comply with the new rules, but would also be tasked to develop “indicators to assess and compare the practices implemented” by the platforms. This is arguably the most controversial French proposal on the issue, and the one whose practical implications are least clear. We could for example imagine to see something like official versions of the Disconnect Privacy Icons, which can inform users in a quick and easily understandable way about how their data is being collected, used and handled. But this could equally become a top-heavy, unwieldy system applying outdated principles to a fast-evolving marketplace.
As the European debate around online platforms unfolds, it will be interesting to monitor relevant national debates, and track the success rate of the implementation of new measures. Another one to watch out for is the UK House of Lords’ own consultation on the issue, which is meant to feed into the European one.