European Commission’s tech agenda for autumn
On 17 July, the European Commission issued its official calendar for fall including expected dates of publication for its upcoming proposals. Here is an overview of the Commission’s digital plans until the end of the year:
- 14 September: Policy programme on Europe’s Digital Decade.
- 13 October: Roadmap on security and defence technologies; connectivity communication
- 19 October: Commission work program for 2022.
- 27 October: Supervisory Data Strategy; review of competition policy; sustainable corporate governance.
- 10 November:
- 23 November: Proposal for greater transparency in paid political advertising.
- 1 December: Data Act, Legislation to tackle child sexual abuse online.
- 8 December: Initiative to improve the working conditions in platform work; initiative to extend the list of EU crimes to all forms of hate crime and hate speech.
- 14 December: Sustainable products policy initiative, including a revision of the Ecodesign Directive; initiative to empower the consumer for the green transition.
ITRE committee publishes amendments on Digital Markets Act
The rapporteur for opinion in the European Parliament’s Committee on Industry, Research and Energy (ITRE), MEP Carlos Zorrinho (Portugal, S&D), published his draft opinion on the DMA. In the opinion, Zorrinho proposes to include subscription video on demand (SVOD), voice assistants, browsers and payment services in the core businesses targeted by the Digital Markets Act (DMA), without the list being exclusive. He argues that the definition of core platform services should also take better account of Internet of Things (IoT). Moreover, the MEP supports „high standards of interoperability” for core messaging and media services. The amendments highlights also that gatekeepers must comply with rules that “do not jeopardise diversity in Europe’s digital environment or stifle an economic ecosystem in which SMEs play a key role”. Targeted advertising should also be banned, as should „dark patterns” and the bundling of services. In addition, the gatekeeper should give the user the choice of their own app shop. On the procedural side, MEP Zorrinho pushes for greater involvement of national regulatory authorities.
Developments on the DSA in EP JURI Committee
The shadow rapporteur on the Digital Services Act (DSA) in the Committee on Legal Affairs (JURI), MEP Tiemo Wölken (Germany, S&D), proposed that whistle-blowers be able to submit complaints against tech platforms directly to their national regulators. Moreover, MEP Wölken aims to enhance privacy and fundamental rights safeguards under the DSA. For instance, when national courts order tech platforms to remove content and to give them information about their users, each order should have an “explicit reference to the legal basis” for it and platforms should not face obligations to “introduce new tracking of profiling techniques for recipients of the service in order to comply with orders to provide information.” The rapporteur for DSA in the JURI committee, MEP Geoffroy Didier (France, EPP), wants tech companies to “refrain from removing, suspending or disabling access” to content from news outlets, even if their posts contradict the platform’s own policies. In addition, MEP Karen Melchior (Denmark, Renew) (here) and MEP Patrick Breyer (Germany, Greens) (here and here) also submitted amendments to the DSA.
Commission’s extends feedback period for proposal on General Product Safety Directive
On 30 June, the European Commission published its proposal for a General Product Safety Regulation. The initiative aims to revise the General Product Safety Directive (GPSD) with new provisions related to new technologies and online sales; ensuring better enforcement of the rules and more efficient and even market surveillance; simplifying the standardisation process; improving the recall of dangerous products in the hands of consumers. On 1 July 2021, the Commission opened the feedback period on the proposal’s adoption. The deadline to provide feedback has been extended until 17 September. On 11 May 2021, Ecommerce Europe published its position paper on the GPSD. In the coming period, this will be revised in light of the new proposal
Final few days to contribute to Ecommerce Europe’s survey on returns
French parliament approves the bill on content moderation rules
On 23 July, the French parliament approved new rules on content moderation that set obligations for tech companies on how to how they should police their platforms. The new legislation echoes the EU’s Digital Services Act, which is still under discussion in the Council and the Parliament. In particular, the bill requires platforms to take measures to prevent the spread of illegal content, publish yearly risk assessments, allow regulators greater access to their data, and be more cooperative with judicial authorities. In addition, it includes duty-of-care and transparency obligations for tech companies and the requirements of setting up easy-to-use channels for users to flag unlawful material. In June, the European Commission commented on the French proposal warning that some of the provisions could breach EU law. Despite some of the recommendations being taken into account, the overall text has been largely left intact.
European Parliament’s reaction to postponed EU digital levy to October
The European Commission decided to postpone the publication of the EU digital levy proposal to October 2021. The Commission confirmed that it would prioritise the finalisation of the global tax deal under the OECD before reassessing its digital levy in the fall. Ahead of the announced delay, Ecommerce Europe published a press release urging the Commission to postpone the levy. Following the announcement, we issued a statement applauding the Commission for its decision to focus on the global tax reform at this stage. At the same time, the European Parliament’s President, David Sassoli, urged Commission President Ursula von der Leyen in a letter to follow up on her promise to propose “in the coming days” new EU-wide taxes known as “own resources” levies. In particular, Sassoli stressed that the Commission undertook “legal commitments” to the Parliament and EU countries to propose the trio of new taxes “by June 2021.”
EP IMCO submitted amendments to Digital Services Act
Ecommerce Europe obtained access to the (leaked) 2297 amendments submitted by MEPs in the European Parliament’s IMCO Committee on the Digital Services Act. The official document is yet to be published. The rapporteur MEP Christel Schaldemose (S&D) proposed adding new obligations such as making online marketplaces legally responsible for ensuring they are not selling dangerous products, and forcing platforms to remove illegal content within 24 hours in some cases. Within the IMCO Committee, the first consideration of the amendments is scheduled for 27 September and the vote on 8 November. The exact date of the plenary in December has not yet been confirmed. In the Council, the discussions on the text are also still ongoing. The EP and Council aim to adopt the legislation in 2022.
EP IMCO and JURI submitted amendments on Digital Markets Act
The IMCO Committee submitted its amendments on the Digital Markets Act (DMA). You can find the amendments here, here, here and here. These follow the amendments submitted by the Committee on Legal Affairs (JURI). You can find its amendments here and here. MEPs Axel Voss and Andrzej Halicki (EPP) followed the example of the EPP’s Rapporteur, Andreas Schwab, by filing an amendment in the JUR Committee to narrow the scope for designating gatekeepers, the large unavoidable platforms that are targeted by the DMA.
EP LIBE adopted its opinion on Digital Services Act
Ecommerce Europe co-signed a letter on targeted advertising
Ecommerce Europe co-signed a letter on EU-US data flows
On 14 July, Ecommerce Europe co-signed a letter on EU-US data flows sent to U.S. Secretary Raimondo and EU Commissioner Reynders on the occasion of one-year anniversary of the ‘Schrems II’ ruling by the EU Court of Justice, which invalidated the EU-U.S. Privacy Shield framework. The judges ruled that Washington did not provide sufficient legal protections for Europeans when their digital information was shipped to the US., and American bulk data surveillance (of foreigners) did not meet EU privacy standards. The signatories urge the U.S. and the EU to swiftly ensure an agreement for secure transatlantic data flows that in turn will strengthen trade, investment, technological cooperation, and reinvigorate the transatlantic partnership. A full list of signatories can be found in the letter.
Ecommerce Europe, w imieniu zrzeszonych organizacji, w tym Izby Gospodarki Elektronicznej, podpisało wspólnie z CCIA list skierowany do Komisji Europejskiej oraz Stanów Zjednoczonych wzywający do przyspieszenia prac nad nowym porozumieniem, które umożliwi płynny przepływ danych osobowych pomiędzy Unią Europejską a Stanami Zjednoczonymi. Jest to ważna inicjatywa, gdyż od wyroku Trybunału Sprawiedliwości UE w sprawie Schrems II transfery danych do Stanów Zjednoczonych są złożonym prawnie zagadnieniem, co znacząco podnosi ryzyko prawne dla wielu przedsiębiorców. Dotyczy to zwłaszcza branży handlu elektronicznego. Działamy dla Was.
G20 agreed on Global tax deal
On Saturday 10 July, in Venice, the G20 agreed on the plan for a global tax reform, negotiated by the Organization of Economic Cooperation and Development (OECD), which would introduce an international tax on multinational companies and set a minimum tax rate of 15%. The final approval is expected at the G20 meeting in Rome in October. The European Commissioner for economy, Paolo Gentiloni, welcomed the deal and showed optimism on reaching the consensus among all Member States. However, countries like Hungary, are still strongly opposing the deal. Ahead of the G20 meeting, Ecommerce Europe published a press release where we strongly advocated for a global tax reform deal.
Commission to publish the EU digital levy with a 0.3% tax on online sales
The publication of the EU digital levy proposal has been delayed until 20 July. Regardless of the US criticism and the ongoing OECD negotiations, the European Commission has no intention to abandon the digital levy. Commissioner Dombrovskis stated that the legislative process is ongoing, and it would not interfere with the process at the OECD level, hence, the Commission will soon publish the initiative. In this regard, according to EU officials informed about the plans, the proposal would include a digital levy of 0.3% for any company in the EU that collects €50 million in sales a year and it would apply to online sales of goods and services. Please note that these plans may still be subject to change.
France to withdraw its digital tax
On 6 July, the French Finance Minister, Bruno Le Maire, revealed that France is willing to withdraw its digital tax on tech giants as soon as a new global taxation deal is in force. He claimed to be “prepared to make a formal, legally binding, commitment in the draft budget law to indicate to our American friends that the day the OECD tax is implemented, the national tax … disappears.” This pledge follows the US claim that in exchange for the global tax deal, it expects European countries to withdraw any individual digital tax initiatives.
ECIPE published a policy brief on Digital Services Tax
European Parliament published a study on online advertising
At the end of June, the European Parliament published a study requested by the Committee on the Internal Market and Consumer Protection (IMCO) on the impact of targeted advertising on advertisers, market access and consumer choice. The paper argues that EU tech legislation would not protect people from this practice. Researchers noted that none of the bills on the table at the moment, namely the Digital Services Act (DSA), the Digital Markets Act (DMA) and the Artificial Intelligence Act, fully address “dark patterns” (defined as manipulative designs to get consent) and algorithmic discrimination. Therefore, they encourage lawmakers to strengthen transparency measures and force tech platforms to let users opt-out of targeted advertising. On 12 July, the MEPs debated over targeted advertising using this study as background information.
LIBE Committee reached informal agreement on Digital Services Act Opinion
On 8 July, the Committee on Civil Liberties, Justice and Home Affairs (LIBE) reached an informal agreement on the Digital Services Act (DSA). The MEPs agreed on banning the advertising practice for political and non-commercial purposes, and more broadly for children, as they considered it to be a threat to a democratic society. With regard to advertisements, the amendments propose to force tech platforms to let users choose to opt
Copenhagen Economics published research note on DSA advertisement rules
In June 2021, Copenhagen Economics prepared a research note for Google on the Digital Services Act (DSA) titled “Disproportionate regulation of personalised ads could have significant unintended consequences.” The publication analyses the effects of the DSA personalised advertisement rules on the EU economy. In particular, it studies the potential risks associated with constraining the ability or incentive of EU firms to use personalised advertising. The findings provide information on the reduction of personalised advertising that would “drastically change the way the internet works today (for publishers, consumers and advertisers) and would have far-reaching impacts across the EU economy (on all markets served by firms that buy personalised ads to most efficiently reach their target audience).”
New VAT e-commerce rules apply as of 1 July
New VAT rules for e-commerce sales to consumers (B2C) enter into force. Ecommerce Europe warmly welcomes such a milestone in the EU efforts to simplify VAT legislation and ensure a level-playing field for the European companies. The most relevant measures of the VAT E-commerce Package are the removal of the existing ‘Distance Selling Thresholds’ and extension of the VAT One Stop Shop system to e-commerce distance selling, and the removal of the € 22 low-value import VAT exemption and introduction of the Import One Stop Shop (IOSS) system. Marketplaces become the deemed supplier and VAT collector in certain cases. As of 1 April 2021, VAT registration to the One-Stop Shop (OSS) and the parallel Import One-Stop Shop (IOSS) has been possible, but the system has become operational as 1 July 2021. The (I)OSS aims to simplify the VAT obligations for online sellers and electronic interfaces (marketplaces), allowing for electronic VAT registration in just one Member State for all intra-EU distance sales and to declare and pay VAT in a single electronic quarterly return. Furthermore, special provisions and new record keeping requirements are introduced for marketplaces/platforms facilitating the supply of goods. For more information on the follow-up work and the monitoring of businesses’ experiences in adapting to the new rules, contact Stefano Mauro at stefanomauro@ecommerce-europe.
European Commission presents proposal for a General Product Safety Regulation
On 30 June, the European Commission published its proposal for a General Product Safety Regulation (GPSR), which aims to update the General Product Safety Directive (GPSD). The GPSR would address risks related to new technology products (e.g., cybersecurity risks) and to online shopping. It would introduce product safety rules for online marketplaces ensuring that all products reaching the EU market (from outside the EU or within the single market) would be safe for consumers. Moreover, the GPSR would be a Regulation, instead of a Directive.
Some of the key features of the proposal are:
- The new rules would empower national regulators to order e-commerce companies to remove dangerous products across their websites, to disable access to them or to display an “explicit warning” to consumers if they are still accessible.
- The obligations imposed by this Regulation on online marketplaces do not include a general obligation to monitor the information which they transmit or store, or to actively seek facts or circumstances indicating illegal activity, such as the sale of dangerous products online.
- Marketplaces should act on the order to ensure that dangerous products on their sites are removed “without undue delay” or within two working days.
- The proposal includes guidance for EU countries on what penalties they should impose if companies do not comply, while leaving it up to member states to decide what those will be. The Commission wants countries’ maximum fines to be at least 4 % of the company’s annual turnover in the EU country.
- The rules will require sellers to provide specific information about the product offered, such as the manufacturer’s name, registered trade name and registered trademark. The provision, the Commission said, “builds on” the Digital Services Act, which also includes requirements on the traceability of online traders. Online marketplaces would not be responsible for verifying the information given.
The Council of the EU and the European Parliament will now debate and propose amendments to the Commission’s proposal before negotiating with each other over the final version of the text. Further information is available in the factsheet.
Global agreement on international tax reform
On 1 July, the Organisation for Economic Cooperation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting (IF) has agreed on a two-pillar solution to address the tax challenges arising from the digitalisation of the economy. 130 countries, including all G20 countries, signed up for the global tax deal. Within the two-pillar package, Pillar One aims to ensure a fairer distribution of profits and taxing rights among countries with respect to the largest MNEs, including digital companies. It would re-allocate some taxing rights over MNEs from their home countries to the markets where they have business activities and earn profits, regardless of whether firms have a physical presence there. Pillar Two seeks to introduce a global minimum corporate tax rate of 15% which countries can use to protect their tax bases. Reportedly, some countries, such as Hungary, Estonia and Ireland, opposed the setting of a minimum tax rate as they fear that it would undermine their ability to attract international companies and it would threat their national sovereignty. The countries set the deadline for finalising the remaining technical details on the two-pillar approach in October 2021 and a plan for the effective implementation of the package in 2023. On 9 July, during the G20 meeting, the finance ministers are scheduled to approve the agreement.
Disagreement in EU and US on implementation global tax deal
Following the initial agreement on global taxation, there are disagreements in the EU on the implementation of the new rules in national law. EU countries such as Estonia, Hungary and Ireland strongly opposed the minimum corporate tax rate, potentially causing difficulties for the EU policymakers as tax proposals can be approved only unanimously. In the United States (US), Democratic and Republican politicians are also arguing over whether to approve the global pact, whereby the Republicans fear that the deal would undermine the US economy and “strips away” the US tax base. To approve and implement the deal, US President Joe Biden would need bipartisan support on the Congress and two-thirds of the Senate, which is evenly divided with the vice-president holding the tie-breaking vote.
Commission postpones EU digital levy proposal by one week
The Commission has postponed the date for the announcement of its EU digital levy proposal from 14 July to 20 July. As a response to the EU’s plans, the United States has stressed that its participation in the global deal is contingent on other countries withdrawing their national digital taxes, including the EU digital levy. According to insights from a nonpaper sent to EU diplomats, the US government argues that “the EU Digital Levy, even if different from previous digital services taxes, threatens the work undertaken via the OECD/G20 process.”
Commission launches roadmap on civil liability
On 30 June, the European Commission launched an inception impact assessment on the adaptation of liability rules to digital and circular economy, which will be open for feedback until 28 July. In the EU, the current liability framework consists of the Product Liability Directive and the national rules. However, the digital transformation of the economy and society is raising challenges on the liability of products and services. For instance, in February 2020, the Commission identified several of these issues in its Report on the safety and liability implications of Artificial Intelligence (AI), the Internet of Things and robotics.
The impact assessment aims to address the emerging challenges for the application of liability rules which cause problems for both businesses and consumers/injured parties. Firstly, the initiative looks at modernising the liability rules considering the characteristics and risks of new technologies and of new digital and circular business models (e.g., AI). Secondly, its goal is to reduce obstacles to getting compensation for damage. This would ensure that injured parties are protected in the EU under common rules, and it would build trust in innovative products and services, and in justice systems, while fostering consumer understanding of innovative technologies.
Commission publishes public consultation on sustainable transport
The European Commission has published a new public consultation on sustainable transport – new urban mobility framework. The aim of the consultation is to hear stakeholders’ views on how to best address transport pollution and congestion, and draw lessons from COVID-19’s effect on public transport to help with the transition to a climate-neutral economy and emission-free transport at local level. The consultation’s responses will feed into a legislative initiative that the Commission will publish in Q3 2021. The consultation is open until 23 September 2021. All members of Ecommerce Europe are invited to reply to the consultation individually.
Developments on the DSA in Council and EP
In April 2021, the Commission published the Digital Services Act (DSA) which is now under scrutiny in the Council of the EU and the European Parliament. On the one hand, in the Council, the Portuguese Presidency presented a compromise text on chapter II, IV and V (see leaked document here), after it had already shared the compromise text on chapter I and II earlier. The document, dated 16 June, clarifies that the Digital Service Coordinators of the country where a platform’s users live (country of destination) can work together with the authorities in the country where a company is based (country of origin) to investigate or issue a fine in another country where the company has its headquarter. An issue that has been repeatedly raised by in particular France and Germany.
On the other hand, in the Parliament, the EP IMCO deadline to present amendments is set on 1 July. The EP industry committee (ITRE) submitted over 600 amendments to the bill (see amendments here, here and here). In the amendments, there are some clear differences on who the new rules should apply to. For instance, the EPP MEPs aim to limit the scope of the DSA and overall push to exempt small companies, but also propose to let the Commission decide which small platforms should be under increased scrutiny based on certain qualitative criteria (e.g. the role of the company “in facilitating public debate”). On the contrary, the S&D MEPs want the DSA to apply to all companies with the exemption of micro-enterprises with less than 10 people. S&D MEPs also introduced new amendments for interoperability requirements.
Sweden, Finland and Ireland send joint paper on freedom of speech in the DSA
On 18 June, Sweden, Finland and Ireland published a joint paper in which they address the topic of freedom of speech in the DSA. In particular, they express their concern for over-removal and their consequent wish to reduce the number of misjudgments in the assessment of illegal content, in particular in case of automatic content moderation. To remedy this, they suggest that when platforms make assessments of content, the assessment should be limited to whether the content is clearly illegal or not. The paper therefore proposes to limit the provisions dealing with expectations on platforms to assess and act against illegal content to apply only to content that is manifestly illegal.
National competition authorities addressed the Digital Markets Act
The national competition authorities demanded that the Digital Markets Act (DMA) would be handled by DG COMP within the Commission, with a complementary layer of enforcement by the national competition bodies. They asked for a coordinated and cooperative approach between these players. “The enforcement of the DMA would gain tremendously by making full use of the know-how and resources of the national competition agencies that have accumulated the highest level of expertise within the digital economy with respect to the practices of digital platforms which affect fair and open competition in their respective ecosystems,” they wrote. In addition, they highlighted that some Member States, such as Germany, aim to give more power to national regulators.
Portuguese Presidency progress report on the Artificial Intelligence Act
The Council of the EU and the European Parliament are now discussing the EC’ proposal on AI, published in April 2021. Two elements have arisen as potentially problematic in the Council, including the definition of AI systems and the scope of the regulation. Certain Member States have argued that the definition was too broad and vague, which could lead to the inclusion of traditional software systems. Second, according to some countries, the product safety requirements created under the AI Act require a better definition and a practical guidance for the companies is needed. As the AI Act regulates the use of biometric identification in public places from law enforcement, the justice and home affairs ministers will also have to assess the regulation. The progress report issued by the Portuguese presidency is available here.
EDPB and EDPS’s joint opinion on the AI proposal
On 18 June, the European Data Protection Board and the European Data Protection Supervisor issued their joint opinion on the AI Act. Addressing the exception of the ban on the use of facial recognition in public places, the two bodies have argued that the Commission’s proposal is too weak and that all use-cases of biometric identification in public spaces should be banned. Finally, they argue that the AI Board should have more autonomy from the Commission.
Digital Tax – deal expected by 30 June
The deal on a global tax system is expected to be announced by the end of June. The agreement would give countries the tools to tax at least 20% profits of companies with margins above 10%. To ensure to target also big companies but whose overall profit margin is less than 10%, negotiators may propose to include part of companies’ operations in the tax deal, such as cloud business, for which margins are higher. At the same time, the agreement would create a global minimum tax rate (of likely 15 percent) to address the phenomenon of profit shifting. The negotiations are still ongoing as there are still some issues to tackle. For instance, countries with low-tax regime, like Ireland, want to maintain their national levies. In addition, the numerous domestic digital services taxes already present in some countries should be rescinded to make room for the new global system.
On the United States side, officials and politicians raised concerns over the upcoming digital levy Commission proposal, as it might discriminate US companies and put in jeopardy the global deal. In this regard, after the visit of US President Joe Biden in Brussels, Executive Vice President Valdis Dombrovskis said: “We were able to reassure [the US] that indeed what we are preparing is going to be a non-discriminatory proposal.” Furthermore, EU officials reported that the EU digital levy has an all-inclusive approach, and it would target any tech firm operating across the bloc with an annual revenue threshold of at least €250 million, which would rope in around 9,000 companies. The tax rate would be low and it would support the EU to pay back the debt it is raising to finance its €750 billion recovery fund. Countries were expected to send feedback on the proposal by 18 June, before the G20 Finance Ministers meeting scheduled for 9-10 July that should approve the deal. Technical details of the agreement might be discussed in the next months and presented in October.
On 21 June, the Economy Commissioner Paolo Gentiloni had a hearing in the Parliament’s Committee on Economic and Monetary Affairs on the European tax initiatives.
Digital Services Act and Digital Markets Act discussion
On 21 June, the Parliament’s IMCO Committee discussed the draft report on the Digital Services Act (DSA) of MEP Schaldemose while the CULT Committee discussed the draft opinion on the Digital Markets Act (DMA) of MEP Kammerevert. On the one hand, the DSA draft report of MEP Schaldemose includes a new set of rules for liability of online marketplaces for the sale of illegal goods, a stricter timeframe for online platforms to assess notifications of illegal content (24h) and it proposes to turn off targeted advertising by default. The deadline for amendments on the DSA report is 1 July. According to Etsy’s CEO Josh Silverman, the proposed amendments could heavily impact artisans and crafters, which would face extra scrutiny under DSA. Furthermore, the Commission warned MEPs that the amendments could breach international trade rules under WTO. However, MEP Schaldemose replied that the changes would improve consumers’ protection.
In the JURI Committee, MEPs are expected to discuss the DSA draft report of MEP Didier on 12 July and have three days to submit their amendments. Under the Parliament’s rules, JURI has a bigger say in what happens to the DSA in Parliament. According to Sweden, Finland and Ireland, the DSA might hinder freedom of speech online and, therefore, these Member States called for more clarity on the definition of illegal content.
On the other hand, the DMA draft report of MEP Schwab includes that gatekeepers in the digital market would be forced to comply with the rules within four months, two months in the DMA draft opinion of MEP Kammerevert. According to the German Federal Ministry for Economic Affairs and Energy, Thorsten Käseberg, the Commission does not have the manpower to enforce the DMA on multinational tech companies. In this regard, he called for a use of the resources available in existing national competent authorities. Moreover, Apple CEO Tim Cook addressed the DMA claiming that it would not be at interest of the users, and it might generate lack of security and privacy in the App Store.
Commission warned French over its new rules for online platforms
The French government anticipated some of the DSA provisions in its own national content moderation rules for online platforms. While the Commission welcomed that the French rules would expire once the DSA enters into force, it warned the government that some of the provisions, such as the requirement for platforms to appoint a contact person in France, breach EU law. The responsible member of the French Parliament revealed that necessary adjustments in line with the Commission’s statement would be made by 26 June, date when the text arrives in the plenary.
Privacy regulators against AI facial recognition
The European privacy authorities, the European Data Protection Supervisor (EDPS) and the European Data Protection Board (EDPB), called for a general ban of Artificial Intelligence (AI) systems that uses biometric identification in public places. The current AI Act proposal does not ban facial recognition but only restricts its use. The data protection regulators advise the Commission that this measure should be necessary to preserve rights and freedom. In particular, they called for a ban on biometric data (e.g., faces, DNA, fingerprints) to recognize ethnicity, gender, political or sexual orientation, emotions and any type of social scoring. The statement is not binding for the Commission but regulators would have to consider the influential role of EDPS and EDPB in enforcing EU data protection rules. The debate is similar in the UK, where the government is debating over loosening its data protection rules. Against this background, the UK’s data protection authority, Information Commissioner’s Office (ICO), stated the legal risks for people’s privacy if the use of biometric data is not sufficiently regulated.
Artificial Intelligence Act
In April 2021, the Commission published the Artificial Intelligence (AI) Act, which is now under scrutiny of the European Parliament and the Council. In the European Parliament, the IMCO Committee took the lead of the file and appointed MEP Benifei as lead negotiator. However, the JURI Committee asked that the AI file would be reassigned under its lead. The JURI chairperson Adrián Vázquez Lázara argued that “given the enormous work carried out by JURI Committee in the area of artificial intelligence […] the expertise built over the years, the initiatives that JURI Committee took with regards to legislating on the subject of artificial intelligence […] the claim of a lead on a horizontal AI Act is legitimate and the lead itself remains firmly with JURI,” In thehe Council, Member States found two problematic elements of the proposal. On the one hand, some considered the definition of the AI systems too broad and therefore, it could include traditional software systems. On the other hand, some countries found the regulation’s scope on product safety requirements too vague and called for practical guidance.
Portuguese proposed amendments to the Digital Services Act
Portugal, holding the Presidency of the Council of the EU, proposed amendments to the Digital Services Act proposal focusing on online marketplaces. The Commission
LIBE committee proposes amendments to DSA proposal
On 10 June, the European Parliament’s Civil Liberties (LIBE) Committee published its amendments to the draft opinion of Rapporteur Patrick Breyer (Greens, DE) on the Digital Services Act. A total of 750 amendments put forward different proposals from privacy and targeted ads, to children protection and national regulators’ involvement in the removal of illegal content. For instance, the Greens and Center-left call for stronger privacy rules on online platforms and a ban for targeted advertising, while other amendments, especially from Renew group, aim to ensure that platforms keep on using encryption systems. The ECR group has rather focused on the socio-cultural differences among countries, reflecting the same amendments that were presented to the Council of the EU for its internal negotiations. The amendments propose to empower national regulators to request online platforms to apply measures to take into account each country’s socio-cultural context when it comes to ruling online platforms. Other amendments, for instance from the EPP group, tackle the platforms’ duties to inform national authorities of every illegal content they remove from online, while the S&D has once again stressed that children protection should be further fostered by including a “child impact assessment” where platforms have to age-verify minors using their services. Negotiations within the LIBE committee will continue throughout June, in light of the vote scheduled for July.
ITRE Rapporteur will present draft opinion on DSA
On 17 June, MEP Virkkunen (EPP, Finland), the DSA’s rapporteur in the European Parliament’s ITRE Committee, will present her draft opinion on the Digital Services Act to the committee. Together with the LIBE and JURI Committees, ITRE has shared competence over the whole Commission proposal with the leading IMCO Committee. In the draft opinion, the rapporteur focuses on ensuring the necessary legal certainty for small and micro enterprises. She has also tried to ensure that the administrative burden set in the Regulation does not go beyond what is strictly necessary. The draft opinion modifies the definition of Very Large Online Platform to include a systemic risk test. It also introduces substantial new conditions regarding out-of-court dispute settlement.
Within the Parliament’s IMCO Committee, we have heard that MEP Dita Charanzova will likely ask for a delay of the deadline to submit amendments to the IMCO Draft Report. The current deadline is 1 July. This also in light of the expected publication of the revision of the General Product Safety Directive on 30 June.
VP Vestager looks at favouring physical stores in upcoming VBER revision
A new proposal on Vertical Block Exemption Regulation will soon be published by the European Commission to rule the relations between brand owners, retailers and online platforms. Ahead of the publication, the Executive Vice President of the European Commission and Commissioner for Competition Law, Margrethe Vestager, said it was important “to figure out how to make sure that we still have living cities.” She mentioned that the Commission is looking at “how to make sure there will be a small privilege for those who also want to do brick-and-mortar.” Vestager may have referred to a proposal from the Dutch competition authority from last year to allow for suppliers to charge different prices depending on the retailer’s distribution channel. This practice, knows as “dual pricing”, is prohibited under current rules. Vestager might have hinted to the fact that setting lower prices for shops that sell their goods in physical stores, for example, would allow them to stay in business. “It’s really important that we still have a physical infrastructure when it comes to shopping,” she concluded.
EC proposal for a Regulation on digital identity
On Thursday 3 June, the Commission published a proposal for a Regulation on digital identity. This proposal aims to address some of the shortcoming of the eIDAS Regulation and its implementation by improving the effectiveness of the framework and extending its benefits to the private sector. This new tool, referred to in the proposal as a “European Digital Identity Wallet”, can be provided by public authorities or recognised private companies. The goal of this wallet is to allow consumers to access public and private services online through a certified and secure process. The European digital identity will be made available to all EU citizens and will be controlled by users. The Commission published in parallel a Recommendation inviting Member States to establish a common toolbox by September 2022, in order to ensure a smooth transition once the EP and the Council have reached an agreement.
Member States agree on the 2022 VAT Reduced Rates
EU Member States have found a provisional agreement on the Commission’s Reduced VAT Rates proposal on the basis of a compromise text (leaked draft here) tabled by the Portuguese Presidency of the Council of the EU. The agreement sets out that Member States can lower their current VAT rates, provided that the standard is not lower than 15%, and there is the possibility to apply a weighted VAT rates at a minimum of 12%. The actual and new VAT rates can be found here. Furthermore,
IMCO Rapporteur Schaldemose publishes Draft Report on DSA
On 1 June, MEP Christel Schaldemose (S&D, Denmark), the Rapporteur on the DSA in the EP Committee on the Internal Market and Consumer Protection (IMCO), published her Draft Report on the file. In her report, Schaldemose appears to be placing a stronger focus on products being sold via online intermediaries. Some key elements of the report are:
- Online platforms that allow distance contracts with traders from third countries should not be able to benefit from the exemption from liability when there is no economic operator inside the EU liable for the product safety or when the economic operator not respond to claims.
- Providers of intermediary services should also be required to establish a single point of contact for recipients of services.
- Extension of the scope of certain provisions in Art. 22 to all intermediary services and obligations for online marketplaces to verify that the information provided is reliable. Online platforms should also ensure that this traceability obligation is not avoided by traders through self-identification as nonprofessional sellers.
- Providers of intermediary services should, by default, ensure that recipients of their services are not subject to targeted, microtargeted and behavioural advertising unless the recipient of the service has expressed a freely given, specific, informed and unambiguous consent. Schaldemose also suggests requirements that help consumers recognise commercial content, influencers included.
- Online platforms should prevent content identified as illegal, from reappearing once removed.
- Online platforms should let the recipients decide whether they want to be subject to recommender systems based on profiling and ensure that the option which is not based on profiling is activated by default.
- Extension of the criteria for qualifying as a Very Large Online Platform to include platforms which have an annual turnover exceeding € 50 million within the Union.
The draft report will now be up for input and suggestions from the other committees and the shadow rapporteurs in IMCO. So far, only EP LIBE has published its draft opinion by Patrick Breyer (Greens, Germany), Geoffroy Didier (EPP, France) rapporteur for EP JURI has not yet published his report and neither has Henna Virkunnen (EPP, Finland) for EP ITRE. For more information, please contact Maike Jansen (maikejansen@ecommerce-europe.
IMCO Rapporteur MEP Schwab publishes DMA Draft Report
Commission opened public consultation on the Data Act
On 3 June, the European Commission launched the public consultation on Data Act and amended rules on the legal protection of databases. This legislative initiative aims to create a fair data economy by ensuring access to and use of data for legitimate purposes, including in business-to-business and business-to-government situations. The consultation will collect information on the following:
- Business-to-government data sharing for the public interest
- Business-to-business data sharing
- Tools for data sharing: Smart Contracts
- Clarifying rights on non-personal Internet of Things data stemming from professional use
- Improving portability for business users of cloud services
- Complementing the portability right under Article 20 GDPR
- Intellectual Property Rights – Protection of Databases
- Safeguards for non-personal data in international context
The deadline of the consultation is 3 September 2021. Ecommerce Europe members are kindly requested to share their input with Maike Jansen (maikejansen@ecommerce-europe.
Ecommerce Europe’s Position Paper on Single VAT ID
Ecommerce Europe has published a position paper on the Single EU VAT Registration, anticipating the publication of a single EU VAT ID Proposal from the European Commission in 2022. Since the VAT One-Stop Shop, set up by the VAT E-commerce Package and entering into application on 1 July, only tackles cross-border B2C sales and not sale of services or goods that are stored or stocked in several EU Member States, the single EU VAT registration initiative would enable businesses to provide services and/or sell goods with only one VAT ID valid throughout the entire European Union. To this extent, the initiative complements the VAT One-Stop-Shop and should be prioritised in order to further reduce VAT-related barriers for cross-border trade in the EU. You can find the position paper here.
Ecommerce Europe Event: “Digitalisation: an enabler for the EU Green Deal”
Ecommerce Europe is hosting an event on “Digitalisation: an enabler for the EU Green Deal” on Thursday 3 June from 10h30 to 12h00 CEST. The event includes an introduction to the report published by Oliver Wyman on the environmental impact of e-commerce, as well as a panel discussion with the European Commission’s DG GROW, as well as representatives from Amazon and IKEA Retail. The event will focus on how to leverage digitalisation to develop more sustainable practices, as well as the key policy developments necessary. You will find the link for the registration here.
EDPB recommends consent to store card details online
On 19 May 2021, the European Data Protection Board (EDPB) adopted its Recommendation 02/2021 on the legal basis for the storage of credit card data for the sole purpose of facilitating further online transactions. According to the EDPB, consent 'appears to be the sole appropriate legal basis for storing credit card details’. The EDPB therefore recommends that 'the consent of the data subject should be obtained before storing his or her credit card data after a purchase' for any future transactions. The EDPB decided that storing card detail did not fall under any elements of legitimate interest. This would not apply to transactions establishing recurring transactions (in the case of a subscription). Online retailers must ensure that they do not automatically store credit card details at checkout but do require consumer’s consent (under GDPR rules).
Competitiveness Council discusses DSA
On 27 May, the Competitiveness Council discussed the Presidency’s progress report on the DSA (and the DMA). While the EP is focussing a lot on increasing liability and responsibilities for online marketplaces, the Council appears to focus more on enforcement and on which authority can act against an online platform. The Commission proposal sees the primary authority as the authority in the country of establishment of the online platform. However, France has been raising the importance of the country of destination, and would like to be able to act even when the online platform is not established in France. At the same time, they want to maintain the country-of-origin principle. The French wish is related to the experiences with the enforcement of the GDPR, where for instance Member States challenge the ability of Irish authority to manage enforcement of many bigger players established in Ireland. Ahead of the Competitiveness Council, the French government pitched a wide range of proposals to adapt the European Commission’s proposals to act stronger against Big Tech companies. France proposed the following amendments:
· Digital Services Act amendments on online marketplaces.
· Digital Services Act amendments on data and content sharing obligations.
· Digital Services Act amendments on country-of-origin principles.
· Digital Markets Act amendments on the scope, including virtual assistants and web browsers.
· Digital Markets Act amendments on a DMA reporting mechanism.
· Digital Markets Act amendments to improve flexibility in the DMA.
Portuguese Presidency published Progress Report on DSA
On 19 May, the Portuguese Presidency has published its Progress Report on the DSA, ahead of the Competitiveness Council of 27 May. On the DSA, the progress was already known due to a leaked draft progress report. The progress report describes overall support among the Member States for the ambition of the DSA proposal and the need to swiftly adopt it. A few sensitive issues have however been identified, both from a political and a legal perspective. Member States want to preserve the general principles of the e-Commerce Directive (in particular the Country-of-Origin Principle) and expressed support for the proposed liability mechanism. National delegations stressed the need for effective implementation and better coordination between countries, their authorities and the Commission. Some Member States continue to ask about the cross-border enforcement and the impact on the country-of-origin principle. Further discussion will be needed on enforcement vis-à-vis service providers established outside of the EU. Furthermore, Member States supported the notice-and-action procedures and Article 22 (Know Your Business Customer), and some suggested to broaden its scope to include other types of intermediary service providers as well as micro and small companies. Some countries asked for additional clarifications on the possibilities of national authorities to issue “stay-down orders”. Further discussion will be needed on the scope, Article 6, Trusted Flaggers, the protection of trade secrets, out-of-court dispute settlements and the application date.
Portuguese Presidency published Progress Report on DMA
On 19 May, the Portuguese Presidency also published its Progress Report on the DMA, ahead of the Competitiveness Council of 27 May. For the discussion on the DMA in the Working Party on Competition, the Portuguese Presidency divided the proposal in nine building blocks (designation of gatekeepers, gatekeepers’ obligations, implementation of obligations, future proofing, scope of Regulation and role of Member States, Commission’s investigative and monitoring powers, compliance, procedural guarantees, implementing and delegated acts). The Presidency identified support among the Member States for the ambition of the proposal, its overall objectives and the need for swift approval. In particular, there is broad support for (i) the need to find a fair balance between speedy and flexible procedures, on one hand, and legal certainty of the measures, on the other; (ii) the combination of quantitative and qualitative thresholds for designating gatekeepers and (iii) the importance of effective investigative instruments, supported by effective sanctions. Several key issues for further discussion are: the role of Member States in the enforcement of the DMA, delegated acts and their scope, the scope, legal basis and interplay of the DMA with other legislation and the designation of gatekeepers, their obligations and regulatory dialogue. Finally, Member States still need to find agreement on whether some obligations should factor in the gatekeepers’ ecosystems, on the duration of market investigations and the threshold for systematic non-compliance remedies and the scope and threshold for interim measures.
Developments on the DSA & DMA
The Digital Services Act (DSA) and Digital Markets Act (DMA) are key items on the institutional agenda this week. Following the publication of the Council’s Progress Reports last week, both files will be discussed in the European Parliament’s IMCO, JURI and LIBE Committees. Furthermore, the IMCO rapporteurs on the DSA, Christel Schaldemose (S&D, Denmark), and DMA, Andreas Schwab (EPP, Germany), have to send their draft reports to translation on Friday. On 27 May, national ministers will meet in the Competitiveness Council to discuss both Progress Reports. Within the JURI Committee, MEP Karen Melchior (Renew, Denmark) has been appointed shadow rapporteur on the DSA. The European Economic and Social Committee also published an opinion on the DSA in which it calls on social partners to be able to have their say on the DSA within a “reasonable schedule”. The Committee recommends that only content that is classified as “clearly illegal” should breach the exemption of liability for host providers. It also calls for a “careful consideration” of the country of destination principle, noting “many shortcomings” regarding the Country-of-Origin Principle.
Leak: new compromise proposal on Data Governance Act
Last week, the Portuguese Presidency circulated (internally) a new compromise proposal on the Data Governance Act. According to leaked insights from a Progress Report, Member States were supportive of the previous version of the text, but still had questions about international access and how data is transferred. Countries were also concerned about how the new data act will work together with existing data legislation such as the GDPR. The new compromise proposal modified the definition of data intermediaries, neutral data clearinghouses, to exclude cloud infrastructure companies and to make it clear that they only connect users, and do not use the data itself. The Presidency also revised the proposal to make it voluntary for EU countries to create their own national policies on data altruism, whereby citizens donate their own data for research. In the new text, the Commission can only limit the transfer of European public data to a non-EU country when there is a “substantial” number of cases of re-use “across the Union”, restricting the broader role the Commission sought for itself in its initial proposal. The Council discussed Portugal’s proposal on 20 May in the Telecom Working Party. Both Council and Parliament need to finalise their versions of the bill before negotiating with each other. The next meeting of EU Telecom Ministers will take place on 4 June. On 20 May, the European Data protection Board (EDPB) also published a statement urging EU lawmakers to make the Data Governance Act more aligned with the GDPR. The EDPB said that the European Parliament and the Council of the EU did not follow the Board’s earlier advice in a joint opinion on ensuring stringent data protection rules in the text.
EP IMCO assigned to work on AI legislation
The European Parliament’s Internal Market Committee (IMCO) has been assigned to lead the work on the new AI proposal. The allocation of the file to the IMCO Committee has upset other Parliamentary Committees, which argue that IMCO is getting an overly important role, especially in light of its crucial position with regards to other major files such as the DSA and DMA. Having IMCO lead the file will most likely increase the focus of any major amendments on consumer protection and product safety. One EU official said there was increasing frustration that all digital files are being handed over to the Internal Market Committee. “This is a highly political and institutional issue now for us and we will make a lot of noises internally”, the official said. The battle over which committee also has an impact on when the bill will be ready. A back and forth about the referral will likely delay the time at which a committee can begin its real work on the file.
Interview Slovenian Digital Minister on Presidency and AI
On 21 May, the Slovenian Digital Minister, Boštjan Koritnik, stated during an interview that the country will do its utmost to secure a common negotiating position on the new AI proposal during its upcoming mandate. He said that “Slovenia puts Artificial Intelligence really high on the list and, being sincere, that’s because we are very successful in the field”. He added that he supports the Commission’s risk-based approach to regulating artificial intelligence as the right solution: “I believe trust with regard to Artificial Intelligence or digitalisation in general is key”. Koritnik is also hoping to achieve agreements in Council on the DSA, DMA and DGA, which he acknowledges is quite optimistic. On the ePrivacy Regulation, he hopes to come to an agreement with the European Parliament, but he still has to “check all the obstacles that are in the way”.
E-privacy trialogue negotiations kicked off
The Portuguese Presidency kicked off the trialogue negotiations on the e-Privacy file in the last days. During the first meeting, negotiators touched upon the issues from a general and introductory perspective. Further developments are expected to take place in the next technical meetings, which are scheduled for 27 May and 16 June. The next trialogue meeting will take place at the end of June.
Commission’s work on new EU corporate tax rulebook
The European Commission will propose a single corporate tax rulebook that aims to consolidate multinational companies’ profits and parcel them out fairly to EU Member States. According to a leaked draft policy document, which will be normally presented by the Commission on 18 May, the so-called “Business in Europe: Framework for Income Taxation” (or BEFIT) act will be proposed in 2023. From the leaked document, it appears that the act aims to “ensure a fair sharing of taxable revenue between different jurisdictions, driven by genuine business activity, and not by aggressive tax planning strategies and excessive tax competition”. The proposal, if approved by the EU Member States (who have veto power in this case), would overhaul the EU’s existing corporate tax structure. Overall profits would be distributed among EU Member States based on a formula that accounts for where companies sell their goods or services, hold their assets and keep their workforce. It seems also that the initiative will not try to establish a common corporate tax rate. Distributed profits would be taxed at national rates. It remains to be seen the relation between the upcoming Commission’s Communication and the work within the OECD aimed to deliver a global agreement this summer on how to tax the world’s 100 largest multinational companies and share the profits across the globe, although, at least according to the Commission, the EU can and should go further than the OECD’s effort.
Leaked document: Presidency note on competitiveness and DSA/DMA
Following the leaked progress report on the DSA, another Council document drafted by the Portuguese Presidency was leaked. This document refers to Europe’s competitiveness and global influence through an ambitious Digital Services Package. The document stresses the importance of up-to-date, futureproof, and harmonised rules to create a level playing field for digital services. It also states that the DSA and DMA have an important geopolitical element, as they have the potential to make the EU a pioneer again in creating a modern, balanced and sustainable regulatory framework. The Presidency note calls the legislative files key elements to leverage the EU’s digital sovereignty and global influence and identifies broad alignment in the Council on the key objectives. The note was circulated ahead of the upcoming Competitiveness Council on 27 May, where delegates are expected to receive progress reports on both files.
Leak: Commission working paper on DSA and disinformation
Last week, a leaked working paper from the European Commission to the Council Working Part on Competitiveness and Growth was circulated. The document, dated 10 May, focuses on how the DSA will help tackle disinformation. In its presentation, the Commission explains that the DSA addresses disinformation in four key ways. First, via a co-regulatory mechanism that defines certain objectives and minimum criteria, but leaves it to the parties in the field to design the precise measures. Very Large Online Platforms (or VLOPs) may also be invited to draw up Codes of Conduct in case of systemic risks. Second, via binding and enforceable obligations where the harm is systemic, in particular given the reach of VLOPs, defined as those reaching more than 10% of European consumers (i.e., around 45 million people). Third, user empowerment is included, in particular related to advertising transparency, ad repositories and recommender systems. Finally, the working paper includes accountability and enforcement, via for instance data access and scrutiny by the Digital Services Coordinators and audits.
EP JURI appoints Geoffroy Didier as DSA rapporteur
The Legal Affairs Committee (JURI) of the European Parliament has appointed MEP Geoffroy Didier (France, EPP) as its rapporteur for the Digital Services Act proposal. Following the competence battle between EP committees on who would take the lead on the DSA, the IMCO Committee will take on most of the file. The LIBE, JURI and ITRE committees are ‘associate committees’ and will attend regular meetings with the IMCO rapporteurs, be included in the drafting of the IMCO reports, shadow meetings, internal EP negotiations and the trialogues. MEP Didier has already been involved in earlier relevant initiatives, as he is the Vice-Chair of the Special Committee on Artificial Intelligence and he was previously rapporteur on the Collective Redress Directive.
Consumer Policy Advisory Group: open for applications
The European Commission’s Consumer Policy Advisory Group (CPAG), in which Ecommerce Europe is represented by Léon Mölenberg and Juliette Beaulaton, has opened a new call for additional members. The CPAG brings together representatives from consumer organisations, civil society and industry in support of the New Consumer Agenda, to regularly review progress achieved and reflect on priorities in the year ahead as input into the Consumer Summit discussions. The call for applications has been reopened until 20 May 2021 and is open to consumer organisations or entities representing relevant consumer, civil society or interest groups, industry associations, and experts. You can find the call for applications here.
Data protection: developments on the EU-UK adequacy decision
On 10 May, the European Parliament’s Civil Liberties (LIBE) Committee voted to formally object to the European Commission’s decision to allow personal data to continue to flow between the European Union and the UK. In February, the Commission declared, in a so-called ‘adequacy decision’, the UK’s data protection system to be “essentially equivalent” to that in the EU. LIBE MEPs voted to include compromise amendments, in a resolution on the UK adequacy decision that formalises their opposition to the deal. The amendments call for the withdrawal of the decision by the Commission until the concern from the Parliament and European data protection regulators have been addressed. As the Parliament’s resolution is not part of the formal process of adopting an adequacy decision, the European Commission is obliged to act on it. The Parliament’s LIBE Committee will vote on the final resolution on Tuesday, after which it will be voted on in Plenary. The Commission warned MEPs against adopting a very critical resolution on its data flows decision between the EU and the United Kingdom. “Not adopting the adequacy decisions in a situation where we will have a close trade and security relationship with the UK would penalise the EU”, stated the Commission according to a document. The Commission joined France and the United Kingdom in lobbying MEPs in an attempt to get the adequacy decision approved. It appears that similar lobbying activities were carried out in April, when the European Data Protection Board (EDPB) issued a (watered-down) statement on the adequacy decision following advocacy by national governments and the European Commission on the importance of adopting the decision.
On 11 May, Ecommerce Europe co-signed a joint industry statement expressing disappointment with the LIBE vote. Ahead of the plenary vote on 20 May, the co-signatories urge the European Parliament to recognise the high standard of the UK’s data protection regime. You can find the full statement here.
Leaked document: Progress Report DSA
On 6 May, Ecommerce Europe secured access to a leaked draft progress report on the Digital Services Act from the Portuguese Council Presidency, dated 27 April. The progress report describes overall support among the Member States for the ambition of the DSA proposal and the need to swiftly adopt it. A few issues have however been identified as sensitive political and legal issues. Member States want to preserve the general principles of the e-Commerce Directive (in particular the Country-of-Origin Principle) and expressed support for the proposed liability mechanism. National delegations stressed the need for effective implementation and better coordination between countries, their authorities and the Commission. Some Member States continue to ask about the cross-border enforcement and the impact on the country-of-origin principle. Further discussion will be needed on enforcement vis-à-vis service providers established outside of the EU. Furthermore, Member States supported the notice-and-action procedures and Article 22 (Know Your Business Customer), and some suggested to broaden its scope to include other types of intermediary service providers as well as micro and small companies. Some countries asked for additional clarifications on the possibilities of national authorities to issue “stay-down orders”. Further discussion will be needed on the scope, Article 6, Trusted Flaggers, the protection of trade secrets, out-of-court dispute settlements and the application date.
Further work will be needed at technical level before the Council can take a political decision. The progress report will be presented to COREPER, after which it can be submitted to the Competitiveness Council on 27 May. Within the European Parliament, a parliamentary discussion on Rapporteur Schaldemose’s draft DSA report is set for 21 June.
e-Privacy Regulation trialogues expected to start on 20 May
The trialogue negotiations between the European Commission, Parliament and Council on the draft e-Privacy Regulation are expected to begin on 20 May 2021. The e-Privacy Regulation trialogues were already anticipated to start soon, after the Parliament and Council reached a deal during trialogue negotiations on the derogation from the e-Privacy Directive for the purpose of fighting online child sexual abuse on 29 April. This step was deemed necessary before proceeding with the e-Privacy Regulation. The Parliament reached its position in 2017, months after the publication of the Commission’s proposal, and expressed a push for stricter rules for the processing of consumer data. The Council’s position, on the other hand, is less protective than the Commission’s original text and allows the “further compatible processing” of metadata if the objective is compatible with what the users originally consented to.
European Commission’s preliminary digital agenda
According to leaked insights into a College of Commissioners agenda dated 30 April, indicative dates (could still be subject to change) of several key files have been set. Below you can find a brief overview:
- 8 June: Draft general budget for 2022.
- 16 June: Lessons learnt from the COVID-19 crisis.
- 23 June: Second stage consultation of social partners on improving the working conditions in platform work.
- 30 June: Revision of the General Product Safety Directive.
- 14 July: Digital levy; proposal for an own resource decision
- 14 July: Fit for 55 package, including among others:
- Revision of the EU Emission Trading System — proposal for ETS as own resource.
- Effort Sharing Regulation.
- Amendment to the Renewable Energy Directive to implement the ambition of the new 2030 climate target (tbc).
- Amendment of the Energy Efficiency Directive to implement the ambition of the new 2030 climate target (tbc).
- Amendment of the Alternative Fuels Infrastructure Directive.
- Amendment of the Regulation setting CO2 emission standards for cars and vans.
- Carbon Border Adjustment Mechanism.
- Proposal for own resources using the Carbon Border Adjustment Mechanism.
- Revision of the Energy Tax Directive.
Insights into Member States’ views on the Digital Markets Act
According to leaked insights into drafting recommendations from several countries, in particular Germany’s position on the Digital Markets Act (DMA), the country wants to expand the scope of the DMA proposal. Germany’s recommendations include the addition of web browsers and voice assistants to the core services tackled by the DMA. Generally, EU countries want the proposal to be clearer in its definition of the gatekeeper platforms that would fall within the scope. Germany also argues that the Regulation should focus on the digital companies that have dominant positions across more than one core platforms service or with a dual role on one core service. Furthermore, Austria wants to exclude business-to-business platforms from the scope of the law and Belgium argues for the inclusion of definitions of profiling and consent in the text.
Ecommerce Europe speaks at a German Ministry’s Conference on DSA
On 14 June, Ecommerce Europe’s Secretary General, Luca Cassetti, will speak during a virtual conference organised by the German Federal Ministry of Justice and Consumers. The conference aims to shed some light on the European Commission’s proposal for a Digital Services Act (DSA) and address certain specific issues and opportunities brought by this proposal, such as the liability and due diligence obligations of e-commerce platforms and an enhanced digital consumer protection. The conference will also touch on microtargeting, as many services still rely heavily on the business model of extensive tracking and profiling in order to generate revenue through personalised advertising. In this occasion, the virtual conference will address and discuss some questions, including what European legal framework could promote the Digital Single Market while ensuring consumer protection online, and how active the platforms should be in identifying and preventing illegal offers. For more information and registration for the conference, please consult the German Federal Ministry’s website.
Consultation on digital technologies and e-commerce uses by business
The European Commission has launched a new consultation on digital technologies and e-commerce use by businesses to collect stakeholders’ feedback on a draft legislative act. As the Commission intends to launch an annual survey to gather statistics on the use of information and communication technologies (ICT) and e-commerce by EU businesses, an implementing regulation will set out specifications for the 2022 survey, such as variables, measurement unit to be used, statistical population, classifications, breakdowns and deadline for submitting data, in order to ensure that the data is standardised and comparable between EU countries. The consultation is open until 1 June. All members of Ecommerce Europe, especially companies, are invited to provide their comments to this draft. National associations are invited to share the consultation with their own company members as well.
EP reaches an agreement over competence battle on DSA/DMA
On 29 April, the Conference of Presidents, which gathers the leaders of all political groups, reached an agreement on which committee can take the leadership on the Digital Services Act (DSA) and Digital Markets Act (DMA). Initially, IMCO was assigned the exclusive competence on the two legislative files in view of their impact on the Single Market legislation, but LIBE, JURI and ITRE argued that they should have competence as regards the content moderation rules, while ECON and again ITRE argued that they should be in charge of regulating the DMA’s gatekeepers. After the long-lasting debate about which European Parliament’s Committee should receive the competence to draft a report on the files, the President of the Conference of Committee Chairs, Mr. Antonio Tajani, proposed a solution earlier this month. In order to reach a compromise, Tajani proposed to call all the committees that challenged the leadership to be “associated” with IMCO under rule 57 of the European Parliament. Collaboration will take place through regular meetings between IMCO, ITRE, LIBE and JURI for the DSA proposal, and between IMCO, ITRE and ECON for the DMA proposal. The rapporteurs of each committee will participate in all shadow meetings, the drafting of the IMCO reports, trialogue sittings and compromise amendments negotiations. All amendments of the associated committees will be voted in IMCO, while the mandate to enter trialogues will be voted in plenary, instead of committee sitting, to allow all associated committees to jointly vote and re-table amendments. This solution was endorsed by the Conference of Presidents on 29 April. Within the LIBE Committee, MEP Patrick Breyer (Germany, Greens/EFA) has been appointed as rapporteur.
Leaked insights from DSA progress report
The discussions on the Digital Services Act (DSA) within the Council are rapidly proceeding. According to leaked insights from a draft progress report from the Portuguese Presidency, dated 27 April, Member States seem overall supportive of the main objectives of the DSA, but several issues remain subjects of discussion. The Member States’ representatives appear to support the ‘country of origin’ principle, which has been maintained from the e-Commerce Directive, but want to ensure that the DSA can be properly enforced, in particular via increasing cross-border cooperation. Supposedly, some countries have also pointed out the increased need to involve the ‘country of destination’ and that there are still some doubts about the mechanisms proposed to remove illegal content, in particular cross-border and towards non-EU based actors (Art. 8 & 9). In terms of content moderation, national delegations largely seem to agree with the proposed text, with some proposing to broaden the scope of the ‘know-your-business-customer’ obligation to other intermediary services and micro and small platforms and to clarify that national authorities can issue ‘stay-down orders’, notably to tackle counterfeit and illegal goods on online marketplaces. Several topics are still up for further discussion, such as trusted flaggers, the ‘Good Samaritan’ clause and the application date. The final document is planned to be endorsed by the European Ministers at the Competition Council of 27 May.
Ecommerce Europe sent joint letter to Commission and EBA on SCA
Ecommerce Europe and EuroCommerce sent on 30 April a joint letter on measuring the impact of Strong Customer Authentication (SCA). The letter highlights some of the main issues still being encountered on the market in the roll out of SCA and highlights the latest figures on failure rates in the EU (still estimated at 30% in average in the EU according to CMSPI). It also points out to the need for further monitoring, including on the impact of SCA on fraud levels in the EU. Finally, the letter focuses on some of the new fees associated to SCA that have risen in the past months. You can find the letter here.
Germany and France would agree with a global minimum tax rate
n an interview with die Zeit, the French and German Finance Ministers, Bruno le Maire and Olaf Scholz respectively, stated they would agree a global minimum tax rate of 21 percent with G20 countries, as suggested by the United States earlier in April. Scholz told die Zeit “what is important is that we will agree on a rate”, Le Maire added that “we have previously proposed 12.5 percent, now the U.S. government has proposed a minimum corporate tax rate of 21 percent. Should that be the result of negotiations, we would also agree.” Le Maire also added that a minimum corporate tax and the taxation of major digital companies will go hand in hand. The European proposal for a digital levy is currently expected to be published on 14 July 2021, on the same day that the Commission aims to publish the Fit for 55 Package.
Parliament and Council agree on the e-privacy derogation
On 29 April, the European Parliament and the Council of the EU reached a deal during trialogue negotiations on the derogation from the e-Privacy Directive for the purpose of fighting online child sexual abuse. This step was deemed necessary before proceeding to the trialogue negotiations on the e-Privacy Regulation. The deal of 29 April lets tech platforms legally resume detecting and reporting child sexual abuse material online. As shadow rapporteur Javier Zarzalejos (EPP, ES) stated, online platforms should continue detecting and reporting child sexual abuse material. The e-Privacy derogation agreement also covers anti-grooming technologies, providing platforms with the right tools to identify child predators who groom children for abuse in online chats. The legislation still needs final approval from both the Parliament in plenary sitting and the Council of the EU. If approved, the interim derogation will apply for 3 years or until a new permanent regulation is agreed. The Commission is expected to propose permanent legislation in the second quarter of 2021.
Expected consultation on the Omnibus Directive
The European Commission’s DG JUST is expected to publish new guidance texts on the Omnibus Directive (EU) 2019/2161 later this year. The guidance will likely be an update of the existing guidance on the Unfair Commercial Practices Directive (in particular for dual quality) and on the Consumer Rights Directive (for transparency requirements), and (new) guidance on the Price Indication Directive, as all amended by the Omnibus Directive. The document is expected in the summer, potentially in June and the Commission is currently consulting its colleagues from the different services about the implementation guidelines. The European Commission has also announced that there will be a stakeholder consultation, most likely in the context of the Consumer Policy Advisory Group, in which Ecommerce Europe is represented by Léon Mölenberg.
Ecommerce Europe replied to the ERGP consultation on standardisation
On 30 April, Ecommerce Europe submitted a response to the targeted consultation of the European Regulators Group for Postal Services (ERGP) on standardisation. The ERGP is an advisory group to the European Commission which facilitates consultation and cooperation between the independent National Regulatory Authorities (NRAs) in EU countries, and between NRAs and the Commission to help consolidate the internal market for postal services and ensure the consistent application of the postal/parcel legislation. The consultation on standardisation has been issued by the Working Group Access of the ERGP and is part of the deliverable II.4 of the Strategic Pillar “Promoting a competitive EU postal single market” of the 2021 ERGP Work Programme. Ecommerce Europe has discussed this questionnaire in its e-Logistics Working Committee and has consequently provided its feedback to the Group, with a focus on the impact of standards on postal interoperability and the need to maintain those standards voluntary at EU level. The ERGP will review stakeholders’ feedback and use it as basis for a report on the impact of standardised conditions to the future of the international exchange of parcels and the development of an open and accessible territory of delivery networks. To receive a copy of Ecommerce Europe’s reply, please contact Stefano Mauro.
Request to fill in & share survey: European Consumer Returns Survey
Ecommerce Europe has partnered up with the University of Bamberg for a study on consumer returns in e-commerce across Europe. As the survey is targeting businesses, we would like to kindly ask all national associations to share the survey among their national members. Company members are also invited to fill in the survey. All participants will get access to a final study report gathering data from operators across Europe, which can be used for decision-making and benchmarking purposes. The survey should take about 15 minutes and is available here. The deadline for submitting contributions is 31 May 2021. For more information on the survey, please contact Maike Jansen at maikejansen@ecommerce-europe.
European Commission presents ‘European approach on AI’
On 21 April, the European Commission presented its proposal for a Regulation on a European approach on Artificial Intelligence. The combination of the legal framework on AI and a new Coordinated Plan with Member States will aim to guarantee the safety and fundamental rights of people and businesses, while strengthening AI uptake, investment and innovation across the EU. AI systems considered a clear threat to the safety, livelihoods and rights of people will be banned. This includes AI systems or applications that manipulate human behaviour to circumvent users' free will. High-risk AI systems will be subject to strict obligations before they can be put on the market, and include for instance AI technology used in critical infrastructures, educational or vocational training, safety components of products (e.g., AI application in robot-assisted surgery), employment, workers management etc. In terms of governance, the Commission proposes that national competent market surveillance authorities supervise the new rules, while the creation of a European Artificial Intelligence Board will facilitate their implementation. The European Parliament still has to decide which committee will have the lead on the file. Several committees have already published initiative reports on AI. The ITRE, IMCO, LIBE and JURI committees seem best placed at the moment. The Council is expected to play a key role in the negotiations, where differences between more security-minded countries like France or more privacy-oriented countries such as Germany will play a role. Once adopted, the Regulation will be directly applicable across the EU. In parallel, the Commission will continue to collaborate with Member States to implement the actions announced in the Coordinated Plan.
Developments on the Digital Services Act
Commission officials defended the DSA proposal during two webinars, organised by the Dutch Permanent Representation and the German Ministry of Justice and Consumer Protection. In the “Dutch” webinar, MEP Karen Melchior spoke up against a general monitoring obligation. Within the European Parliament, DSA Shadow rapporteur Arba Kokalari (EPP) said she was concerned about fellow MEPs who want to ban targeted ads. She said it would be a disservice to consumers and companies. The Council appears to be moving forward with the DSA. Fernanda Ferreira Dias, Director General at the Portuguese Ministry of Economy and Digital Transition said the working parties in Council finished the first full reading of the DSA in a “record time.” Speaking at another webinar, she declared that the Portuguese Presidency was about to write their progress report to be presented on 27 May to the Competitiveness Council. Finally, Germany appears to be trying to make the DSA as similar as possible to its NetzDG law. Christian Kastrop, State Secretary to the Federal Minister of Justice and Consumer Protection called on the Commission’s DG Connect Director-General Viola to leave more autonomy for countries several times. He suggested the DSA could further take inspiration from the German law. “I would not say we should all do it the German way,” he said, “but maybe we can take some bits and pieces where we have very good results.” He also said that the law needed to set a specific deadline for platforms to react and not just some “weak” wording about acting in a “timely” manner and that the law should be more ambitious to tackle harmful speech. Viola answered that it is not that simple to draw the line on what needs to be done, adding that the DSA is not a regulation about speech but about “the transparency on which mechanisms of content moderation are decided by a platform” and empowering users. The DSA and DMA will be reviewed at the Conference of Presidents meeting on 29 April.
New deadline: Product Safety Awards
The EU Product Safety Award was launched in 2019 to provide recognition and visibility to companies that put consumer safety at the heart of their business. It also aims to raise consumer awareness around product safety and encourage more informed purchasing choices. This year, the EU Product Safety Award is focusing on two categories – protecting the safety of vulnerable consumer groups and combining safety and new technologies. There will be up to 12 winners in total, with gold, silver and bronze awards granted to three SMEs and three larger companies under each of the two thematic categories. Winners will receive their Awards from Didier Reynders, European Commissioner for Justice, at a high-level ceremony on 23 September. To apply, companies must be based in one of the 30 European Economic Area countries (the 27 EU Member States plus Iceland, Liechtenstein and Norway). you can find more information regarding the categories, eligibility and the application procedure here. The deadline for applications has been extended to 17 May 2021.
EDPS calls for including remote biometric identification systems in AI proposal
Following the publication of the proposal for a regulation on Artificial Intelligence by the European Commission, the European Data Protection Supervisor (EDPS) has published a statement and provided feedback on the legislative initiative. While acknowledging the merits in the risk-based approach underpinning the proposal, the EDPS also argued that the European Commission should have included also a moratorium on remote biometric identification systems, such as facial recognition, as previously called for by the EDPS itself almost one year ago. As long as the Commission proposal restricts real-time remote biometric identification systems in public places (except to fight serious crime such as terrorism), the EDPS argues that such remote biometric identification systems are necessary where AI could lead to extremely high risks of deep and non-democratic intrusion into people’s private lives. The EDPS will therefore conduct a thorough assessment of the Commission proposal and focus on setting precise boundaries for tools and systems which present risks to data protection and privacy.
LEAK: Proposal for a Regulation on Artificial Intelligence
On 14 April, a leak of the upcoming proposal for a Regulation on a European Approach for Artificial Intelligence circulated in Brussels. The official proposal is due to be presented by the European Commission on 21 April. The Regulation aims at creating a “human-centric” legal framework for Artificial Intelligence, fostering innovation, and maximizing benefits while ensuring the safety of EU citizens and compliance with existing privacy regulations. To reach this objective, the draft regulation notably plans to introduce a vetting system for “high-risk” AI technologies. The vetting system will consist of quality management and conformity assessment procedures. If a system fails, it will not be allowed to be commercialised in the EU. The proposal lists AI systems that are considered as high-risk, which range from systems used for remote biometric identification of persons in public spaces to systems used in the recruitment, task allocation or evaluation of workers. The proposal also includes a list of AI practices (Art. 4) that are prohibited in the case that they contravene the EU’s values, violate fundamental rights, and go against the public interest. It will be relevant to see if these practices can also be found in the final legislative proposal, as some of them could be interpreted to have a link with content moderation or targeting. In case of infringement, the proposal plans for financial penalties. The proposal also includes measures to support innovation in AI, notably the possibility for national competent authorities to establish regulatory sandbox schemes to facilitate the safe development and testing of innovative AI systems. The regulation finally plans for the establishment of a European Artificial Intelligence Board, to supervise the regulation’s application and share best practices.
EP IMCO adopts own-initiative report on AI
On 14 April, during the meeting of the European Parliament’s Internal Market Committee (IMCO), the own-initiative report by MEP Deirdre Clune (EPP, Ireland) was adopted. The report stresses that digital innovation must be accompanies by legislation that endorses trustworthy, fair, accessible, and human-centric technology. It also underlines the importance of support for SMEs and calls on the Commission to consider a voluntary labelling scheme for trustworthy AI. The report still has to be approved by the full Parliament in plenary. In response to Commission’s leaked
Commissioner Breton dispels concerns about the DSA effect on rule of law
The Internal Market Commissioner, Thierry Breton, stressed on Thursday that the European Commission will pay particular attention to ensuring that the Digital Services Act does not threaten freedom of expression and the rule of law across the EU Member States. The discussion on potentially negative effects of the DSA was raised amidst recent concerns over declining press freedom and civil liberties in Hungary and Poland. Breton assured the Commission will monitor the enforcement of the DSA and DMA in close cooperation with the national regulators. Earlier this week, the Commissioner released a statement denying claims that the Digital Services Act Package could favour single-service companies. Previously, Breton expressed his plans to actively debunk myths about DMA and DSA in his LinkedIn article.
EDPB publishes opinions on Commission’s draft UK adequacy decisions
On 16 April, the European Data Protection Board (EDPB)
EDPB adopts a Statement on international agreements including personal data transfers
During its 48th plenary session on Wednesday 14 April, the European Data Protection Board (EDPB) adopted a Statement on international agreements including transfers of personal data. The statement recalls the requirements of Article GDPR and Article 61 Law Enforcement Directive, according to which all international agreements involving personal data transfers concluded with an EU Member State before 24 May 2016 or 6 May 2016 respectively, remain in force. Thus, the EDPB invites all Member States to assess and review their agreements in order to align them with EU data protection law. The full statement is available here.
EU OSS Registration and Guidance available
The European Commission has published the guidelines for the registration to the new One-Stop Shop (OSS), as set out in the VAT E-commerce Package. As you may know, the OSS is an extension of the current Mini One-Stop Shop (MOSS) for the telecommunication services, and is aimed to simplify the VAT obligations for online sellers and electronic interfaces (marketplaces). The OSS allows to VAT register electronically in just one Member State for all intra-EU distance sales and B2C service supplying, and to declare and pay VAT in a single electronic quarterly return. The VAT registration to the OSS is possible since 1 April 2021 and every Member State has set up an online portal complying with the VAT E-commerce Package. The Guide to the VAT OSS that the Commission published last week aims to provide a better understanding of the OSS, its procedures and the technical specification for the special schemes applicable under the VAT Reform. For more information on the VAT E-commerce Package, you can also consult the Explanatory Notes on the new rules, a guidance on importation/exportation of low value consignments or the Commission website for the OSS and the new VAT e-commerce rules.
Unites States wants to redirect global digital tax to 100 largest multinationals
According to new Unites States tax proposals, reported by the Financial Times, Joe Biden wants the 100 largest companies in the world (those with at least 20 billion dollars revenue) to pay their taxes directly to the countries where they sell their goods or services. In the proposals, which were sent to the other countries involved in the OECD discussions on digital taxation, the United States redirects the focus to both digital and non-digital companies. In a leaked PowerPoint, the United States clearly mentions that it “cannot accept any result that is discriminatory towards U.S. firms”, they also argue for simplification. By limiting the application of Pillar One to the 100 larges multinational enterprises, they find that it is consistent with concerns about mega-corporations but would not arbitrarily or discriminatorily be limited to certain business sectors. In addition, they state it would maximize chances of success, as it would limit the total number of businesses in scope, avoids overburdening the system and makes administrative challenges manageable. French Economy and Finance Minister Bruno Le Maire has welcomed the United States’ proposal on redirecting the tax towards the 100 larges corporations, as long as it would cover all digital multinationals.
EP President Tajani presents solution to committees’ competence debate over DSA and DMA
After the long-lasting debate on which European Parliament’s Committee should receive the competence to draft a report on the Digital Services Act (DSA) and Digital Markets Act (DMA), the President of the Conference of Committee Chairs, Mr Antonio Tajani, has proposed a solution. Tajani’s proposal is a compromise on the competence fight between the committees involved, namely the internal market (IMCO), civil liberties (LIBE), legal affairs (JURI), economic affairs (ECON) and industry (ITRE) committees. Initally, IMCO was assigned the exclusive competence on the two legislative files in view of their impact on the Single Market legislation, but LIBE, JURI and ITRE argue that they should have competence as regards the content moderation rules, while ECON and again ITRE argue that they should be the in charge of regulating the DMA’s gatekeepers. In order to reach a compromise, Tajani proposed to call all these committees “associated” with IMCO under rule 57 of the European Parliament. Collaboration would take place through regular meetings between IMCO, ITRE, LIBE and JURI for the DSA proposal, and between IMCO, ITRE and ECON for the DMA proposal. The rapporteurs of each committee would participate in all shadow meetings, trilogue sittings and compromise amendments negotiations. All amendments of the associated committees will be voted in IMCO, while the mandate to enter trilogues will be voted in plenary, instead of committee sitting, to allow all associated committees to jointly vote and re-table amendments. However, this plan has to be approved firstly by the Conference of Presidents, which gathers the leaders of all political groups, and secondly by the committees themselves that are involved in the legislative debate. The confirmation is therefore yet to be reached.
EP LIBE Committee gets exclusive competence on GDPR within the Data Governance Act
Within the European Parliament, the Industry, Research and Energy Committee (ITRE) is responsible for the Data Governance Act. The rapporteur Angelika Niebler (EPP, Germany) published ITRE’s Draft Report on the file on 26 March 2021. Within the European Parliament, committees for opinion are the Committee on Internal Market and Consumer Protection (IMCO) and Committee on Civil Liberties, Justice and Home Affairs (LIBE). The LIBE Committee will get exclusive competence on most of the GDPR-related amendments of the Data Governance Act. MEP Sergey Lagodinskyv (Greens, Germany) will provide a formal opinion and be invited to all the industry committee shadow meetings, exchange of views and trialogues.
Consorzio Netcomm outlined the main VAT changes from 1 July 2021
On 7 April, Ecommerce Europe’s Italian National Association Consorzio Netcomm has organised an informative webinar to outline the main changes introduced by the VAT E-commerce Package as of 1 July 2021. Chaired by Alan Rhode (taxmen.eu), the webinar focused on the new IT systems and procedures needed to declare VAT for e-merchants and businesses that operate both intra-EU and towards the EU. In the first case, e-traders will use an IT system referred to as One-Stop-Shop (OSS) or “Union Scheme”, which is set up by each Member States and aims to simplify and unify the use of VAT for intra-EU distance sales. The OSS will allow the use of a single VAT throughout the EU, however its use is optional and the alternative is to maintain and report a different VAT for each Member State of business activity. Traders that use the OSS can maintain only the VAT of the Country where they are established. In the case of distance sales originating from non-EU countries, e-traders will have to use the Import One-Stop Shop (IOSS), which collects duties and customs together with VAT, and still simplifies the VAT registration and reporting for the e-traders. However, consignments of an aggregated value below €150 are not charged customs, while the VAT is collected by the marketplace that facilitates the sales. A cross-cutting measure regardless of the OSS/IOSS, the VAT exemption for low value consignment below €22 will be removed, in order to prevent tax frauds and unfair trading practices linked to under-declaring the goods values. For more information on the VAT E-commerce Package, you can contact Stefano Mauro at stefanomauro@ecommerce-europe.
DG TAXUD replies to Ecommerce Europe on the VAT E-commerce Package
In response to the letter that Ecommerce Europe has addressed to the European Commission about the national implementations of the VAT E-commerce Package, the Head of the VAT Unit of DG TAXUD, Mr. Patrice Pillet, has sent a personal response to Ecommerce Europe, addressing each issue raised in our letter. The European Commission has stressed that both Germany and the Netherlands have now confirmed their operational readiness by 1 July, and he pointed out that, on the customs side, the legal deadline for Member State to update their National Import System is 31 December 2022 according to the UCC Work Programme. The deadline of 1 July 2021 concerns some transitional measures aimed to enable the implementation of the new VAT E-commerce Package. Regarding the German national VAT registration and paper certificate issuance, Mr. Pillet stated that the European Commission will monitor attentively whether Germany will adapt those requirements to the current EU rules. Read full content of the letter here.
European Data Protection Board (EDPB) issues 2021-22 work plan
The EDPB has published its work plan for the next two years, with very ambitious plans for publishing more than 20 guidelines. Among these will be guidelines on data subject rights, legitimate interest, and remuneration for personal data. The Board has not provided a concrete timeline for these proposals or how they will organise public consultations. Ecommerce Europe is currently planning to provide feedback on Guidelines 02/2021 on Virtual Voice Assistants (“VVAs”), which identify some of the most relevant compliance challenges and provide recommendations to relevant stakeholders on how to address them. The EDPB deadline for providing feedback is 23 April.
European Commission replies to Member States about DSA
On 26 March, the European Commission replied in a letter to 19 countries’ various questions on highly debated issues contained in the Digital Services Act whose feedback period ended shortly after. On Online Marketplaces and the sale of potentially harmful goods, the Commissions decided not to go further than to “impose the relevant obligations on all online platforms” without specific, static, definitions. This issue will be more specifically addressed in the ongoing update of the General Product Safety Directive. Several countries such as Ireland and Denmark, hosts to big platforms, also complained that smaller players were not subject to the same extent of obligations in spite of their similar capacity to sell illegal goods or spread misinformation. Relatedly, discussions are still going on the definition of big platforms which many consider should not be left up to the Commission to decide in the form of a delegated act. On the issue of content moderation, the EC declared companies were best placed to regulate their platforms, however the bill foresees a co-regulatory code of conduct to replace the self-reporting mechanisms. Several NGOs, including Access Now and Report Without Borders already reacted strongly and made their own proposals. Nonbinding and voluntary standards under the Code of Practice on Disinformation has been the sole regulatory mechanism in place since 2018 but failed to deliver as expected, resulting in the opening of a procedure to draft new guidance with view to improving the code. In that regard, the European Commission has opened public consultation on 1 April to collect feedback until 29 April. Concerning potentially conflicting national rules: Member States will not be able to adopt national legislations but will be allowed to regulate on what is considered illegal, companies in turn will have to abide by these rules and grant access or not based on user-location. In the last weeks, a very high number of stakeholders directly responded to the EC’s public consultation on the DSA with the publications of an additional 113 position papers. More policy developments will come.
Portuguese Presidency responds to Vestager’s concerns on GDPR and ePrivacy
On 23 March, in response to the reservations expressed by European Commission on the ePrivacy Council Agreement not being in line with the GDPR, the Portuguese presidency assured that “all the general principles established in the GDPR are fully applicable”. Fundamental principles laid out in the GDPR such as the purpose limitation, accountability, and data minimisation should be safeguarded in the scope of the foreseen ePrivacy regulation. A possible deviation is the lack of penalty for infringing other provisions regarding user consent, the legal grounds for processing data, and the obligation for service providers based outside the EU to appoint a representative in the EU. Commenting on the Presidency’s statement, Commissioner Vestager stressed the importance of the two pieces of legislation being aligned even though they do not play the same role, to avoid any confusion and that it was the mission of the Commission to ensure it.
Commission’s DG TAXUD replies to Ecommerce Europe on the VAT E-commerce Package
Following the publication of its Inception Impact Assessment on a new Sustainable Products Initiative, the European Commission launched a public consultation on the Sustainable Products legislative Initiative (SPI) that should extend the scope of the Eco-design Directive to a broader range of products beyond energy-related products. The aim is to gather opinions and evidence from the public and relevant stakeholders on the SPI’s scope, objectives and the amendments to the Eco-design Directive as well as possible complementary legislative proposals to regulate the following aspects of sustainability measures: Sustainability design requirements for products; Responsibility for information, including Digital Product Passport(s); Avoidance of destruction of goods; Circular business models; the Incentives for circularity; Compliance with and enforcement of sustainability requirements for products. The deadline to reply to the consultation is 9 June.
Vestager intends to push ahead with digital tax levy
On 23 March, Executive Vice President Margrethe Vestager announced the Commission’s intention to push ahead with the digital tax levy explaining that reaching an agreement on the global scale – at OECD level – and implementing would be too slow. The digital levy is one in a series of tax measures on which the EU relies to pay back the €750 billions of EU recovery fund. The proposal is to be tabled by June for an expected operational readiness from 2023 onwards. In response to the concerns over a possible clash with the OECD’s political deal on taxing multinational companies to be reached this summer, the VP assured that the levy will “not fuel trade tensions in any way.” and that the Commission will work on a design that does not interfere with global negotiations. Currently, the Commission is working on a bill that will implement an international minimum corporate tax rate (Pillar 2 of the OECD two-pronged package deal). Plans by the EC to resort to Article 116, a controversial treaty provision by which EU governments could be stripped of their power to veto tax bills also remains on the table. More details will be available in the coming weeks with the publication of the EC communication on “Business Taxation for the 21st Century”. The European Commission’s public consultation on the introduction of a digital levy is still open until 12 April 2021 and Ecommerce Europe is finalising its position paper and reply to the survey.
USTR threatens to impose unilateral tariffs against six countries over alleged tax discrimination
On 26 March, the Biden administration revived a tariff threat against Austria, India, Italy, Spain, Turkey and the United Kingdom following their adoption of digital service taxes which the Trump administration had already deemed unfairly discriminatory against U.S. internet giants like Google and Amazon. The threat to resorting to Section 301 of the 1974 Trade Act to imposes unilateral tariffs against trading partners marks a continuation with prior administration. U.S. Trade Representative, Katherine Tai, stated that option would be on the table for as long as needed until an agreement was reached at the OECD level and that the US “remained committed to reaching an international consensus through the OECD process on international tax issues”. While empowering U.S. Treasury Secretary Janet Yellen in OECD talks, the measure is at risk of being challenged under WTO rules. Parallel to that, four similar investigations against Brazil, the Czech Republic, the European Union and Indonesia have been terminated which could in turn lift up the tone of the negotiations. Currently, public comments on the ongoing investigations into digital services taxes are also being collected.
EP ECON Committee adopts a resolution on reforming the tax system
On 23 March, the European Parliament’s Committee for Economic and Monetary Affairs (ECON) agreed with 48 votes in favour, 4 against and 6 abstentions to a resolution calling on the reform of the current tax system to better fit the digital age. The MEPs called for a reset of “outdated international tax rules”, drafted almost a century ago and which did not factor in the digitalization of businesses leading as a result traditional companies to be taxed “nearly 3 times as much as digital businesses.” Suggestions and proposals contained in the resolution include: a minimum effective tax rate to be set at a fair and sufficient level to discourage profit shifting and prevent damaging tax competition, the reallocation of taxing rights to reflect that the interaction with users and consumers by businesses caused by digitalisation significantly contributes to value creation in highly digitalised business models. In addition, the subcommittee calls on the Commission to form of a fall-back position that would include a digital services tax – should OECD negotiations fail to reach an agreement by July 2021.
EP Plenary adopts LIBE resolution on the Commission’s evaluation of the GDPR
On 25 March, the European Parliament adopted a LIBE Resolution on the Commission evaluation report on the implementation of the General Data Protection Regulation two years after its application. By adopting it, the plenary formally rejected German MEP Axel Voss’s call for an overhaul of the GDPR. Highlights of the resolution include the singling out of Irish and Dutch Data Protection Authorities, in the overall functioning of the mechanism, as well as criticism of the perceived inaction of Commission to address national authorities’ concerns over their lack of resources to perform their duties.
European Commission launches Public Consultation on the Sustainable Products legislative Initiative
Following the publication of its Inception Impact Assessment on a new Sustainable Products Initiative, the European Commission launched a public consultation on the Sustainable Products legislative Initiative (SPI) that should extend the scope of the Eco-design Directive to a broader range of products beyond energy-related products. The aim is to gather opinions and evidence from the public and relevant stakeholders on the SPI’s scope, objectives and the amendments to the Eco-design Directive as well as possible complementary legislative proposals to regulate the following aspects of sustainability measures: Sustainability design requirements for products; Responsibility for information, including Digital Product Passport(s); Avoidance of destruction of goods; Circular business models; the Incentives for circularity; Compliance with and enforcement of sustainability requirements for products. The deadline to reply to the consultation is 9 June.
German Federal Ministry’s reply to Ecommerce Europe on the VAT E-commerce Package
Following the joint policy action with members that Ecommerce Europe has addressed to the European Commission and the German Institutions about the national implementations of the VAT E-commerce Package, Ecommerce Europe has received a written response from the German Federal Ministry. The State Secretary Mr. Bösinger has personally sent a reply confirming that the “Atlas Impost” data storage system will not be ready by 1 July 2021. This system is expected to be operational only in January 2022. The Federal Ministry of Finance has also reported that the implementation process of the e-commerce package is including a modification of the national e-commerce rule, arguing that the VAT ID number will serve as a proof of registration for tax purposes by businesses operating on electronic marketplaces. However, the State Secretary agreed that, for a seller that generates taxable turnover in the EU via an electronic marketplace and that uses the OSS to declare VAT in another Member State, the requirement to register in Germany would be incompatible with the EU legislation. Therefore, the Länder are currently determining the specific documentation that electronic marketplaces must keep on hand in such cases with regard to the active sellers. For more information on the response of the German Federal Ministry, please find here their letter in English.
Ecommerce Europe’s submission to the draft act consultation on VAT e-commerce trade
Ecommerce Europe has submitted a reply to the European Commission’s open consultation on detailed implementing rules for the VAT e-commerce trade and its Draft Implementing Regulation and annex. Our contribution focuses on data harmonisation and minimisation, stating that the data points required should not go beyond what is already required under article 63c of the VAT Implementing regulation. At the same time, we ask for more clarity for the businesses as regards the technical requirements proposed by the draft act, and we call for additional detailed technical specifications and a transition period of at least 3 months after the publication of such technical specifications. Please find here the final version that has been submitted.
The European Commission reorganises the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW)
As of 16 March, DG GROW has changed its organisational structure to better adapt to the ongoing changes in the European Economy. With the new structure, DG GROW aims to support the EU economy in its recovery from the COVID-crisis and in its digital and green transition as well as to better reflect the key role of networks, clusters and alliances in reinforcing supply chains. Damir Hajduk, former head of the retail unit within DG GROW, has moved to the unit for IT system development (B.3.). The new head of unit responsible for food, retail and health (F.3.) is Mr. Giacomo Mattino. In parallel with these changes, the executive agencies that the Commission entrusts with the implementation of spending programmes are also undergoing reform. From 1 April 2021, ‘EASME’ (The Executive Agency for Small and Medium-sized Enterprises) will become ‘EISMEA’ (European Innovation Council and SMEs) and a new agency, ‘HaDEA’ (Health and Digital) will be created to help build a greener, more digital and more resilient post COVID-19 Europe.
European Parliament IMCO Committee meets with Didier Reynders, Commissioner for Justice – as part of the structured dialogue
On 17 March, Commissioner for Justice, Didier Reynders, updated IMCO Members on the Commission’s current work and upcoming legislative files related to EU Consumer policy as outlined in the new Consumer Agenda adopted last November 2020. The European Commission intends to empower consumers in the green transition in a similar way to other initiatives such as for circular economy. In that regard, the Parliament’s report by David Cormand on this topic will be taken into account. Regarding product safety, the Commission recognised that the current main piece of legislation, the GPSD, became outdated in face of the changing needs brought by connected devices or increasing online shopping for instance and plans on revising it alongside the DSA. The Commission is also looking into reinforcing responsibilities for online platforms. On the issue of consumer finance, the Commission seeks to balance increased protection for vulnerable consumers against digital lenders – peer-to-peer or short-term lenders – and ensuring the option of online lending solutions remains available.
Ecommerce Europe spoke at EU Consumer Summit 2021
Commission launches Roadmap on Business Taxation for the 21st Century
Ecommerce Europe attends first meeting of the Consumer Policy Advisory Group
European Commission publishes a Roadmap on instant payments
The European Parliament adopts Report on Due Diligence
Ecommerce Europe’s letter to the European Commission
On 3 March, Ecommerce Europe addressed a letter to the VAT Unit of DG TAXUD to ask for more clarity and transparency at EU level as regards the VAT E-commerce Package. The Package requires that all Member States set up a One Stop Shop for VAT registration and an Import One Stop Shop for VAT and Customs by 1 July 2021, in order to ensure facilitation and simplification of trading across the EU and between the Member States and non-EU countries. However, despite a 6-month postponement due to COVID-19 and the fact that some Member States had declared they would not be ready by 1 January 2021, Germany and the Netherlands made it clear in early 2021 that they would only put in place a partially operating and an emergency IT system by July. In its letter to DG TAXUD, Ecommerce Europe called on the European Commission to ensure that all Member States respect the deadline, avoiding a loophole in the national implementations of the Package and the creation of a gateway for unfair trading practices through the non-compliant Country. In the letter, Ecommerce Europe also addressed two national laws put forward by France and Germany that deviate from the VAT E-commerce Package, increasing the platform liability for VAT collection and making national VAT ID registration still mandatory. Ecommerce Europe has asked the European Commission to assess those laws and take the necessary steps to avoid gold plating and ensure a smooth implementation.
Commission publishes three guidance documents, including on Art. 4 of the Market Surveillance Regulation
On 5 March, the European Commission published three guidance documents to facilitate the free movement of goods within the Single Market. The guidance on the market surveillance of goods clarifying Article 4 of the new Market Surveillance Regulation aims to strengthen market surveillance in the EU and help ensure that products reaching the EU market, particularly those sold online, comply with EU product rules. Specifically, the Guidelines provide guidance on how economic operators should implement Article 4, by clarifying: the scope and which economic operator should act as the economic operator referred to in Article 4 for a given product; the tasks of the economic operator; and the practical application of Article 4 according to the type of economic. As the aim of Article 4 is to facilitate the work of the market surveillance and border authorities, the Guidelines also set out how the authorities can make use of this requirement in practice. The Guidance on the implementation of the 2019 Regulation on Mutual Recognition offers detailed information on various aspects of the Regulation, including on the mutual recognition declaration for operators, the assessment of goods for national authorities, and on support services provided by SOLVIT centres and Product Contact Points. Finally, the guidance on the application of Treaty provisions regarding the free movement of goods gives an overview of the relevant case law of the Court of Justice of the EU on obstacles that may affect goods and operators in the Single Market.
European Commission publishes Roadmap on Business Taxation for 21st Century
The European Commission has published a roadmap on business taxation in the 21st century in order to gather views on how to best fit our current corporate tax framework for the new challenges posed by the globalisation and digitalisation of the economy. With the aim of ensuring a level-playing field between all companies, maintaining the EU’s competitiveness in the global marketplace, and ultimately adapting our tax systems to the upcoming developments, the European Commission is proposing to set out a medium-term vision and actions for business taxation in the EU. The initiative will take stock of OECD discussions on the reform of the international corporate taxation framework and articulate this with action at EU level. The Commission’s action will take the form of a Communication setting out the general policy approach, without an accompanying legal proposal. The aim of this Communication is to set out a vision for business taxation in the EU and a medium-term in this area. It will lay down principles and priorities for the EU business tax agenda over the coming years and articulate EU action with the on-going discussions at the international level on taxation of the digital economy and minimum effective taxation. Ecommerce Europe’s members are invited to respond to this questionnaire freely and share any feedback they may have with Maike Jansen (maikejansen@ecommerce-europe.
Member States’ preliminary positions on the Digital Services Act
According to a leaked internal document, dated 23 February, national delegations have sent their preliminary comments on the Digital Services Act (DSA) to the Council of the EU. Overall, Member States support the aim of the proposal but ask for various changes. The feedback so far has been sent by countries such as Luxembourg, Greece, the Czech Republic, Ireland, Poland, Slovakia, Sweden, Denmark, Italy, Belgium, Austria and Spain, but Germany and France have not submitted any comments. Luxembourg insists the DSA should leave little space for EU Member States to add new things at the national level, arguing that “any flexibility or opening clauses for Member States to derogate, specify or complement the rules of the DSA would directly undermine the goal of harmonisation.” Poland, which is currently drafting its own national content moderation rules, calls for a dispute resolution mechanism between EU countries in case of cross-border removal orders. Furthermore, it argues that the Digital Services Act should “also provide here for the possibility to issue an order with the opposite effect, i.e. order to restore access to content.” Finally, several national delegations, including Greece, would like the DSA to mention more specifically the collaborative economy.
Ecommerce Europe attends Second Digital Services Act Conference
On 4 March, Ecommerce Europe attended the Second Digital Services Conference, organised by Forum Europe, which focused on the Digital services act (DSA) and Digital Markets Act (DMA) proposals, gathering stakeholders from the European institutions, national governments, and the industry. The topics of discussion focused on the updated liability regime for online content, consumer protection from counterfeit goods on online marketplaces, the proposed ex ante regulations and definitions of “gatekeeper” platforms, and targeted advertising and transparency. The all-day conference started with interventions from three high-ranking government officials from the Netherlands, France and Poland. Mona Keijzer, the Netherlands’ State Secretary for Economic Affairs and Climate Policy, confirmed that the Dutch government welcomed the Digital Services Act, applauded the Commission for limiting the scope to illegal content and praised the increased transparency for end users and responsibility for platforms. French Secretary of State for Digital Cédric O said that online platforms such as social media cannot be considered as only hosting providers. He said there needs to be the “right balance between the Single Market and the fact that it’s difficult to onboard all the cultural differences from the country of origin.” O also called for a balance between content regulation, the protection of users and freedom of expression. Finally, Marek Zagórski, Poland’s Minister of Digital Affairs, insisted on the need for the DSA to take into consideration national specificities. He said national regulators should be more empowered to ensure proper oversight over the activities of social media platforms. He argued that the content on platforms should also consider the social and cultural context of a user’s country “to a large extent,” adding that legal mechanisms at a national level should also be considered during the negotiations. Finally, Prabhat Agarwal, Head of Unit for e-commerce at the European Commission and responsible for the drafting of the DSA text, noted that the EU executive is well aware of the blurring divisions between social media platforms and online marketplaces. He stated that the Commission has taken note “of the recent acquisitions or partnerships between social media companies and e-commerce providers,” adding that there would be much less distinction between social media and online marketplaces in the future.
Commission Executive Vice-President addresses Parliament’s IMCO Committee
On 23 February, Margrethe Vestager, Executive Vice-President of the European Commission, addressed MEPs from the European Parliament’s Internal Market Committee (IMCO) regarding topics such as consumer protection, interoperability, targeted ads and competition, part of the Digital Services Act (DSA) proposal. On a question regarding increased responsibilities for marketplaces, Executive Vice-President Vestager stated that “if platforms had responsibilities as importers [of goods], then they wouldn’t be platforms anymore.” She added that the DSA’s Know-Your-Business-Customer principle, that would allow customers to know who they are buying from, is already an important consumer protection feature, which strikes the right balance between consumer protection and avoiding too burdensome regulations for platforms. In response to a strong push from the European People’s Party (EPP) to limit online anonymity, Vestager stated that “it would be really far reaching to require everyone to identify themselves in terms of hampering freedom of expression,” but agreed there should be a way for users to identify themselves in the context of trading. On the issue of interoperability, she stated that “instead of making one blanket obligation” on interoperability, the Commission preferred having some provisions in the do’s and don’ts lists, that are “proportional and necessary.” Similarly, on a question regarding a ban on micro-targeting, Vestager argued the Commission wanted to give the consumers more control over ads rather than set a ban, as targeted advertising could be useful for smaller companies.
Renew Europe shadow rapporteur shares views on Digital Markets Act
MEP Andrus Ansip (Renew, Estonia), who will be Renew Europe’s shadow rapporteur on the Digital Markets Act (DMA) in the Parliament’s Internal Market Committee (IMCO) welcomed the timely discussion on the creation of a level playing field and called for the protection of traditional media. MEP Ansip questioned how fast it would be to enforce the DMA, arguing that the proposed structural measures should not be considered a panacea and urged for the creation of an independent instrument. He added that the issue of interoperability was not “black and white” and stated that it was impossible to have interoperability for encrypted services as it would compromise their integrity. He touched upon the “conflict between transparency and business interests” and stated that it was impossible to provide full transparency. Finally, he urged for a balanced approach on targeted adds, arguing that an outright ban was not a good solution. Meanwhile, the IMCO Committee has appointed the full list of rapporteurs for the DMA: the lead rapporteur will be MEP Andreas Schwab (EPP, Germany), with the following shadows: MEP Evelyne Gebhardt (S&D, Germany), MEP Andrus Ansip (Renew, Estonia), MEP Virginie Joron (Identity and Democracy, France), MEP Martin Schirdewan (GUE/NGL, Germany), MEP Marcel Kolaja (Greens/EFA, Czechia), MEP Adam Bielan (ECR, Poland).
Parliament’s IMCO Committee allocates upcoming digital files
According to an internal note, the European Parliament’s Internal Market Committee (IMCO) has allocated the upcoming digital files among the political groups in the following way:
- Common chargers for mobile phones: Socialists & Democrats (S&D)
- Empowering consumers for the green transition: S&D
- Revision of the General Product Safety Directive: Renew Europe
- Revision of the Machinery Directive: European People’s Party (EPP)
- Data Act: European Conservatives and Reformists (ECR)
- Design requirements and consumer rights for electronics: Greens/EFA
- Product Liability Directive: Renew Europe.
U.S. drops ‘safe harbour’ demand during latest G20 meeting
On 25 February, during a video conference of Finance and Economy Ministers of the G20, U.S. Secretary of the Treasury, Janet Yellen, stated in a letter that the U.S. is committed to reaching an agreement on global digital tax at the OECD level by June 2021. She added that the U.S. no longer will demand the inclusion of a “safe harbour” clause, which would effectively allow U.S. companies to be exempt from the new rules on taxation. All ministers present also expressed their support for finding a global solution by the summer. Bruno Le Maire, French Finance Minister, expressed content with the U.S.’s change of policy since its previous administration, calling it “a major step forward.” He added that “an international agreement on minimum business taxation and taxation on digital services is within reach,” in a tweet. Additionally, the OECD Secretary-General presented his Tax Report to G20 Finance Ministers and Central Bank Governors. The report looks at the developments of OECD’s international tax agenda, the response to the COVID-19 pandemic, the links between taxation and the environment, as well as the capacity building efforts in developing countries. Specifically, regarding global taxation, the report provides an overview of the effects of the Pillar One and Pillar Two proposals on the economy, stating that the two combined could increase global corporate income tax revenue by around $50-80 billion per year. In the absence of a consensus-based solution, however, would likely lead to a proliferation of uncoordinated and unilateral tax measures (e.g. digital services taxes) and an increase in damaging tax and trade disputes, which could result in a reduction of the global GDP by more than 1%.
LEAK: Portuguese Presidency’s compromise text on the Data Governance Act
On 22 February, the Portuguese Presidency of the Council has circulated the first version of the compromise text for the Data Governance Act (DGA). A leaked version of the document can be found here. The compromise text includes a few changes compared to the original proposal. For instance, it added new definitions and clarifications on terms such as “data sharing service provider” and “data altruism,” aligning it with the GDPR. In addition, it added that “in the event of conflict between the Data Governance Act and the Union law on the protection of personal data,” data protection takes precedence. The text also stressed that the DGA does not create a new legal basis for the processing of personal data and that it will not override member countries’ own security and defense rules. Finally, the text clarified the role of legal representatives of non-European companies based in the EU and extended the application deadline to 18 months after its entry into force.
Ecommerce Europe selected to join Commission’s Consumer Policy Advisory Group
The Brussels Secretariat is glad to communicate that Ecommerce Europe has been selected by the European Commission to join its newly formed Consumer Policy Advisory Group (CPAG). The expert group will be managed by the Directorate-General for Justice and Consumers (DG JUST) and will comprise of 42 experts. It will bring together representatives from consumer organisations, civil society and industry in support of the New Consumer Agenda, to regularly review progress achieved and reflect on priorities in the year ahead as input into the Consumer Summit discussions. It will suggest operational actions to the Commission to implement the high-level priorities set out in the Consumer Agenda as input into the yearly priorities to be discussed at the annual Consumer Summit and contribute to the monitoring by the Commission of the implementation of annual operational actions as follow-up of the Consumer Summit. Furthermore, the group will assist Commission services in the preparation and implementation of legislative and non-legislative actions delivering on the priorities of the Consumer Agenda and will foster exchange of experiences and good practices in the field. Ultimately, the group’s role will be in assisting the Commission in the preparation of legislative proposals and policy initiatives. As you can see from the above, the role of this group will be instrumental for the design of future legislation around the New Consumer Agenda, and Ecommerce Europe will be part of this process. The first meeting of the Consumer Policy Advisory Group will take place on 3 March 2021. Ecommerce Europe’s representatives will be Mr. Léon Mölenberg and Ms. Juliette Beaulaton.
Parliament’s IMCO Committee to vote on DSA and DMA reports in November
The European Parliament’s Internal Market Committee (IMCO) plans to vote on its draft reports on the Digital Services Act (DSA) and the Digital Markets Act (DMA) on 8 November, according to a draft timetable. The IMCO Committee has been provisionally assigned both files, however other parliamentary committees are currently challenging this decision. Members of the IMCO Committee have decided to look at both files in parallel. The following provisional schedule still needs to be approved by IMCO coordinators and the dates are subject to change:
28 May 2021: Deadline to send draft reports to translation
21 June 2021: Consideration of draft reports
1 July 2021: Deadline for tabling amendments
27 September 2021: Consideration of amendments
27-28 October 2021: Consideration of compromise amendments
8 November 2021: Vote in the IMCO Committee
December: Plenary vote
Furthermore, all rapporteurs for the DSA and most of the rapporteur for the DMA have already been confirmed. For the DSA, the lead rapporteur will be MEP Christel Schaldemose (S&D, Denmark), with the following shadows: MEP Arba Kokalari (EPP, Sweden), MEP Dita Charanzová (Renew, Czechia), MEP Alessandra Basso (Identity and Democracy Italy), MEP Alexandra Geese (Greens/EFA, Germany), MEP Adam Bielan (ECR, Poland), MEP Martin Schirdewan (GUE/NGL, Germany). For the DMA, the lead rapporteur will be MEP Andreas Schwab (EPP, Germany), with the following shadows: MEP Evelyne Gebhardt (S&D, Germany), MEP Andrus Ansip (Renew, Estonia), MEP Virginie Joron (Identity and Democracy, France), MEP Martin Schirdewan (GUE/NGL, Germany), MEP Marcel Kolaja (Greens/EFA, Czechia).
Dutch government publishes position on DSA and DMA
On 17 February, the Dutch government released two position papers on the Digital Services Act (DSA) and Digital Markets Act (DMA) proposals. The Netherlands welcomes the DMA’s main principles, including the list of do’s and don’ts, but calls for an approach that does more to take into account differences between platforms. The Dutch government also urges for the inclusion of an obligation for the Commission to assess mergers and acquisitions notified by gatekeepers, even when the company being bought is not related to digital services. It also states that national competition authorities should be involved in the legislation’s enforcement. On the Digital Services Act, the Netherlands supports its main principles, such as the focus on illegal content and the ban of general monitoring obligations. However, the Dutch government states that it “has questions” about the cooperation procedures between regulators to enforce the future legislation, as well as about the definition of “very large online platforms.”
Update on the ePrivacy child sexual abuse negotiations
According to a leaked four-column document, the European Parliament and the Council of the EU have managed to reach compromises on the ePrivacy derogation to fight against child sexual abuse online. In September, the European Commission had put forward a derogation to allow tech companies to detect and report child sexual abuse material and still be compliant with EU privacy laws. However, the Parliament and the Council failed to reach an agreement prior to the entry into force of the EU Telecommunications Code in December 2020, leading to internet communication services no longer being able to scan their platforms for child sexual abuse material without the users’ consent. According to the leaked document, the trialogue negotiations between the Council, Parliament and Commission have resulted in agreement on the bill’s definitions of specific terms including “child pornography,” “solicitation” and “child sexual abuse.” The negotiators also partly agree on what powers supervisory authorities in charge of monitoring data processing should have, and also on requiring the European Data Protection Board to issue guidelines on how to use technologies that track child sexual abuse material. During the upcoming meeting of the Council’s Telecommunications Working Party on 25 February, the Portuguese Presidency will ask for the opinion of national delegations on tentative compromise proposals on other issues, including redress mechanisms and mandatory data protection impact assessments. Furthermore, agreement is still needed on encryption, human oversight, the protection of professional secrecy, the screening of text communications, the maximum data storage periods and mandatory reporting to law enforcement authorities. The document states that “while one or more additional technical meetings may still be needed, the Presidency is currently trying to find a suitable date with the EP for a second political trialogue to be held as soon as possible.”
Council’s COREPER reaches an agreement on ePrivacy
On 10 February, the Council of the EU’s Committee of Permanent Representatives (COREPER) reached an agreement on the latest compromise proposal on the draft e-Privacy Regulation, put forward by the Council’s Portuguese Presidency. According to EU Officials, Germany and Austria, who opposed the proposal, decided to abstain from the vote, and France, whose vote turned out to be crucial for the adoption, managed to get a last-minute concession regarding data retention, prior to supporting the proposal. The latest proposal of the Portuguese Presidency will be the Council’s official position, entering into trialogue negotiations with the European Parliament. The proposal re-introduces the possibility to process electronic communications metadata and to use the processing and storage capabilities of the end-users’ terminal equipment, including collection of information for further compatible processing. Moreover, the application of the Regulation will start 24 months after its entry into force, and not 12 months, as a previous Portuguese draft suggested. The proposal specifically reintroduces a new security provision for the processing of data by service providers, suggesting that they should be permitted to safeguard the prevention, investigation, detection or prosecution of criminal offences, as well as the prevention of threats to public security. In addition, the text proposes that the processing of data stored on end-users’ terminal equipment can be permitted, with consent, only if the information is eventually made anonymous, if the processing is limited to information that is pseudonymised, and if the information or data will not be used to build a profile of the end-user. After the agreement in Council, the next stage of the ePrivacy draft Regulation will be negotiations between the Council and the Parliament. The expectations are that since the positions of the two institutions are quite diverging, it will not be easy to reach an agreement. The Parliament reached its position in 2017 and expressed a push for stricter rules for the processing of consumer data. The Council’s position, on the other hand, is less protective of privacy than the Commission’s original text and allows the “further compatible processing” of metadata, if the objective is compatible with what the users originally consented to. Ecommerce Europe issued a press release on the ePrivacy agreement, which you may find here, as well as on Twitter and LinkedIn.
Reactions from the European Parliament on Council’s ePrivacy agreement
After EU deputy ambassadors in the Council of the EU agreed on the Council’s position on the ePrivacy Regulation proposal, Members of the European Parliament (MEPs) expressed their disapproval of the more industry-friendly approach of the Council, as opposed to the more privacy-oriented position of the Parliament. MEP Birgit Sippel (S&D, Germany) who will represent the Parliament in the trialogue negotiations stated that the upcoming negotiations will not be easy but that there was still a chance for compromise. She criticised the lack of enough provisions for the protection of fundamental rights, namely addressing the exceptions in the Council proposal for companies regarding advertising. MEP Patrick Breyer (Greens/EFA, Germany) went further in his disapproval of the proposal, calling for it to be renamed the “dePrivacy” Regulation because of its business focus. MEP Sophia in ‘t Veld (Renew, Netherlands) welcomed the long-awaited agreement, noting that the ePrivacy Regulation is supposed to update a piece of legislation dating from 2002, and also voiced her criticism of the Council proposal’s content.
Commission publishes expert report assessing the Digital Markets Act proposal
On 9 February, the European Commission published an expert report, which assesses the Digital Markets Act (DMA) proposal. The report presents an independent economic opinion on the DMA, from a high-level Panel of Economic Experts, established by the JRC and based on existing economic research and evidence. The Panel endorses the vision encapsulated in the DMA, including the designation of large gatekeeper platforms and a series of ex-ante obligations they should comply with. The Panel points out the challenge of striking a balance between the benefits from network effects of large platforms and the potential negative effects from anti-competitive behaviour and winner-takes-all market forces in online services. While some types of anti-competitive behaviour are well-known from classic competition cases, problems such as tying, bundling and self-preferencing present new challenges. The report explores these behaviours in specific settings, including in online advertising and mobile ecosystems. It discusses ways to use valuable data gathered by platforms for pro-competitive purposes and the wider benefit of society in order to achieve a higher standard of fairness in the distribution of the social value generated by large platforms. Information asymmetry between platforms and regulators remains an issue in the effective implementation of the obligations.
EDPS publishes opinion on Digital Services Act and Digital Markets Act proposals
On 10 February, the European Data Protection Supervisor (EDPS) published its opinions on the European Commission’s proposals for a Digital Services Act (DSA) and a Digital Markets Act (DMA). The opinion on the DSA recommends additional measures to better protect individuals when it comes to content moderation, online targeted advertising and recommender systems used by online platforms, such as social media and marketplaces. The EDPS highlights that any form of content moderation should take place in accordance with the rule of law. Profiling for the purpose of content moderation should be prohibited unless the online service provider can demonstrate that such measures are strictly necessary to address the systemic risks explicitly identified in the Digital Services Act. Furthermore, the European legislators should consider a ban on online targeted advertising based on pervasive tracking and restrict the categories of data that can be processed for such advertising methods. The opinion on the DMA highlights the importance of fostering competitive digital markets so that individuals have a bigger choice of online platforms and services that they can use. It argues that giving users better control over their personal data can reinforce contestability in digital markets. Furthermore, increased interoperability can help to address user lock-in and ultimately create opportunities for services to offer better data protection. To guarantee the successful implementation of the European Commission’s DSA and DMA proposals, the EDPS calls for a clear legal basis and structure for closer cooperation between the relevant oversight authorities, including data protection authorities, consumer protection authorities and competition authorities.
French lawmakers approve national content moderation rules
On 11 February, during the French National Assembly plenary session, Members of Parliament (MPs) supported new content moderation obligations for online platforms that mirror those in the EU’s Digital Services Act (DSA) proposal. The approval comes only weeks after the European Commission presented its proposal to regulate online content. In mid-January, the French government put forward an amendment (in French) to its proposal on countering radical Islam, known in France as the bill on “republican principles,” that copied provisions from the DSA. The main obligations include more transparency regarding content moderation processes, more duty-of-care obligations, yearly risk assessments conducted by platforms, greater access to data for regulators and enhanced cooperation with judicial authorities. Echoing the DSA, the French government also imposes more obligations on the largest platforms, and adds the possibility of a fine of up to 6 percent of their global annual turnover for repeated infractions. The rules will be enforced by the Superior Audiovisual Council, an independent regulator. The French government decided not to wait for the EU rules, stating the urgency to act against hate speech online but has agreed to stop applying its national rules when the DSA comes into force. While some MPs expressed concerns about France’s unilateral actions, Digital Economy Minster Cédric O referred to the Commission’s inaction against Germany regarding its own hate speech law, known as NetzDG. In mid-January, the Commission implied that France needed to notify the legislation to the EU’s executive body for an assessment of compliance with EU law. Laetitia Avia, an MP from Emmanuel Macron’s La République en Marche party, who is in charge of the bill’s social media provisions, said France would do so. Other parts of the draft legislation are still being discussed by the National Assembly, after which the text will go to the Senate.
IMCO Committee DMA Rapporteur shares views on the file
MEP Andreas Schwab (EPP, Germany), who will take over the lead on the Digital Markets Act (DMA) Report in the Internal Market Committee (IMCO) stated that the European Parliament has been expecting the proposal “for a long time” but expressed content with the European Commission’s efforts. He identified the entry into application of the proposal, its scope and enforcement as the main points of discussion going forward, adding that the Parliament wants “clear rules for the very large companies, but not bureaucracy for everyone.” MEP Schwab added that the proposal should be applicable as soon as possible and be enforced both at the EU and national levels. He recommended the concept of “maximum harmonisation”, where national law cannot exceed the terms of the DMA, as a way of ensuring legal consistency across the EU. Furthermore, he recommended that the legal text should be “as precise as possible” to avoid delays in the DMA’s application. Finally, MEP Schwab stated that the DMA could not solve on its own all the issues related to Big Tech, and emphasised the importance of the DMA’s interaction with the Data Governance Act, the upcoming Data Act and the Digital Services Act. Additionally, Renew Europe have announced that the group’s shadow rapporteur for the DMA in the IMCO Committee would most likely be MEP Andrus Ansip (Estonia), and the shadow for the Left (GUE/NGL) will be MEP Martin Schirdewan (Germany).
IMCO Committee DSA Rapporteur shares views on the file
MEP Christel Schaldemose (S&D, Denmark) who will take over the lead on the Internal Market Committee’s (IMCO) Digital Services Act (DSA) Report called for the imposition of more obligations on e-commerce marketplaces to ensure high levels of consumer protection within the EU. She also believes that the DSA should make a clear distinction between the different kinds of platform services, because “a social media platform is not an online marketplace selling goods”. She suggested that the Parliament should thus consider putting slightly bigger responsibilities on the platforms when it comes to selling products. In Europe, MEP Schaldemose admitted that “we have today some of the best product safety requirements in the world, but since more and more people are shopping online – and getting more and more products from third countries where the manufacturers do not comply with EU regulation – there is a risk in terms of product safety and a risk to create unfair competition for economic operators on the market”. With regards to social media platforms, she stated that they should be tackled differently, without too many content obligations, generating online political debates, as that would place them in an “editor position.” MEP Schaldemose emphasised the importance of targeted advertising and suggested that harmful content needed to be addressed within the DSA. She also supported the provision for platform interoperability, which is part of the Digital Markets Act (DMA) proposal. After discussion with MEP Andreas Schwab, IMCO’s Rapporteur for the DMA, MEP Schaldemose, stated that the two files will be approached in parallel by the Committee for “as long as possible,” with hearings and discussions on the DSA/DMA draft reports held on the same days. However, there is the possibility in the future to uncouple the two files, as one might be “easier to tackle than the other.” Additionally, Renew Europe have announced that the group’s shadow rapporteur for the DSA in the IMCO Committee would most likely be MEP Dita Charanzová (Czechia).
Finland presents its position on the DSA and the DMA
On 4 February, the Finnish government issued a Communication, outlining its support for the European Commission’s Digital Services Act (DSA) and Digital Markets Act (DMA) proposals. In terms of the DSA, the Finnish government calls for the future regulation of illegal online content to “safeguard the freedom of expression and other fundamental rights of users as well as a high level of consumer protection.” While supporting the DSA’s obligations and measures for service providers for combating disinformation “in principle,” as well as the rules for tracking businesses on online marketplaces and the transparency of ads, the Finnish government emphasises the importance of taking into account the protection of “legitimate business secrets of companies.” In terms of the DMA, Finland stresses that the obligations must be “justified, proportionate and clear” and “unnecessary administrative burden should be avoided.” Finland also wants to pay particular attention to the protection of personal data and the “legal protection of gatekeeper companies.” When submitting the government’s communication to the Finnish Parliament, Minister of Employment Tuula Haatainen stated that access to data was critical in terms of competition and emphasised the discrepancy between a few companies controlling the access to data collected from users, while some smaller operators could not get access even to the user data of their own content.
Executive Vice-President Vestager on the future enforcement of the Digital Markets Act
The European Commission’s Executive Vice-President Margrethe Vestager has acknowledged that the recent competition rules passed in Germany, resembling the provisions of the Commission’s Digital Markets Act (DMA) proposal, have strongly encouraged the Commission to get the DMA proposal passed. She stated that the German rules acted as a signal for the EU to move ahead quickly to minimise the need of further harmonisation. Some see Germany’s quickly enacted competition reform as a way to block potential backsliding withing the Commission on the definition of a “gatekeeper” and to prevent any watering down of the DMA’s ex ante provisions. Executive Vice-President Vestager stated that the enforcement of the DMA will require a balance between EU and national authorities and underlined the importance of national authorities specifically when large players were dominant in specific Member States and not across the EU. She expressed hope that there could be an agreement on the DMA in the spring of 2022, which has already been suggested by France, which will hold the Council Presidency for the first part of 2022.
Portuguese Presidency takes ePrivacy Proposal to COREPER
On 10 February, the Committee of Permanent Representatives (COREPER I) at the Council of the EU will discuss the Portuguese Presidency’s proposal on the ePrivacy Regulation. On 5 February, the Portuguese Presidency presented a new proposal at the Council’s Telecom Working Group. The text re-introduces the possibility to process electronic communications metadata and to use the processing and storage capabilities of the end-users’ terminal equipment, including collection of information for further compatible processing. Moreover, the application of the Regulation will start 24 months after its entry into force, and not 12 months, as a previous Portuguese draft suggested. The proposal specifically reintroduces a new security provision for the processing of data by service providers, suggesting that they should be permitted to safeguard the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and the safeguarding against and the prevention of threats to public security. In addition, the text proposes that the processing of data stored on end-users’ terminal equipment can be permitted, with consent, only if the information is eventually made anonymous, if the processing is limited to information that is pseudonymised, and if the information or data will not be used to build a profile of the end-user. While Germany remains against the Portuguese proposal, according to EU officials, it appears unlikely that it will succeed in building a blocking minority in the Council, as the majority of Member States appear supportive of the current proposal.
Trilogues on interim ePrivacy rules expected soon
According to MEP Birgit Sippel (S&D), rapporteur of the interim ePrivacy rules, allowing the detection and removal of child sexual abuse material online, the European Parliament is not “blocking” the progress on the file, contrary to some recent allegations. The Parliament, Council and Commission have already held five technical meetings on the file and political trilogues are expected to begin soon. Meanwhile, The Technology Coalition, counting among its members Google, Facebook and Twitter, announced three new measures to counter online child sexual abuse: a $1 million investment in new technology to detect and remove child sexual abuse, the launch of a new research fund with another $1 million, and new leadership with former Global President of the International Justice Mission Sean Litton as executive director. The new measures come as tech companies fall under scrutiny for a lack of proactivity in detecting and removing online child sex abuse. The Council and the Parliament were expected to reach an agreement on the interim rules by 21 December 2020, when with the entry into application of the Electronic Communications Code, the detection and removal of child sexual abuse material online could be considered as a violation of privacy provisions.
EP’s LIBE Committee criticises Irish Data Protection Commission on Schrems II ruling
According to a motion for a resolution, presented on 4 February at a meeting of the European Parliament’s Civil Liberties Committee (LIBE), MEPs express concern that “the whole ‘Schrems II’ case was started by the Irish Data Protection Commissioner, instead [of] taking a decision within its powers.” Furthermore, MEPs question the Irish Regulator’s activities regarding several complaints filed more than two years ago, which have not yet been decided upon. The LIBE Committee furthermore, condemned “the attempt of the Irish Data Protection Authority to shift the costs of the judicial procedure to Maximilian Schrems, which would have created a massive chilling effect and calls on the Commission to start infringement procedures against Ireland for not properly enforcing the GDPR.” The Irish deputy commissioner with the country’s Data Protection Authority, Graham Doyle, stated that “the premise of the criticism in the draft motion in relation to transfers is false,” referring to the authorities alleged failure in addressing shortcomings over Ireland’s failure to deal with a complaint from privacy activity Max Schrems about international data transfers outside of the EU. In the Schrems II ruling from 2020, the European Court of Justice annulled the validity of the EU-US privacy shield, on the basis on the complaint, and also said that standard contractual clauses, the instrument used by the EU in the absence of adequacy agreements for international data transfers, was insufficient in protecting personal data in line with EU standards.
Developments on DMA and DSA competences in European Parliament
After initially being assigned both the Digital Services Act (DSA) and the Digital Markets Act (DMA), European Parliament’s Internal Market Committee (IMCO) competence has been challenged by the Economic Affairs Committee (ECON) and the Industry and Research Committee (ITRE) regarding the DMA, and by the Legal Affairs Committee (JURI) and potentially the Civil Liberties Committee (LIBE) in terms of the DSA. The allocation of competences on both files to IMCO will become official during the next Parliamentary Plenary (8-11 February), after which each of the contesting committees will have four weeks to challenge this decision and claim leadership for the DSA or DMA. The disagreement will be discussed between the chairs of committees first — in the Conference of Committee Chairs (CCC) — and then between the presidents of the various political groups if chairs cannot agree on a solution. The IMCO Committee has already decided on rapporteurs for both files: MEP Andreas Schwab (EPP, Germany) as a rapporteur for the DMA and MEP Christel Schaldemose (S&D, Denmark) for the DSA. Meanwhile, the Portuguese Presidency of the Council of the EU has announced that the Competitiveness Council aims to adopt progress reports on the DSA and the DMA on 27 May 2021.
Leaked new ePrivacy Regulation proposal
On 29 January, Ecommerce Europe obtained access to a leaked draft version of the new ePrivacy Regulation proposal of the Portuguese Presidency of the EU. The presentation of the new proposal was originally planned for 28 January but has been postponed to 4 February. The new proposal is expected to receive support from most Member States delegates in the Council’s Telecom Working Group. It aims to provide better legal consistency by using exclusively the term “provider” at parts where the terms “controller” has previously been used, and by replacing “transmission” with “providing an electronic communication service.” Furthermore, the majority of the changes concerning Article 6 (Permitted processing of electronic communications data) demonstrate the Presidency’s commitment to further align the proposal with the provisions of the General Data Protection Regulation (GDPR). In terms of Article 8 (Protection of end-users' terminal equipment information), the changes partially reinstate the proposal of the Finnish Presidency, by clarifying the limited purpose of audience measurement processing activity and simplifying the text for legal clarity. The Portuguese Presidency aims to take the new proposal to COREPER in February.
Hungary plans tech regulation legislation in the spring
Hungary’s Justice Ministry intends to submit a bill “on the regulation of the Hungarian operations of large tech companies” in the spring of 2021. According to Justice Minister Judit Varga, the upcoming legislation aims to achieve “legal, transparent, and verifiable operations” of tech companies, as such already apply to “all other companies, large corporations or small enterprises.” Minister Varga stated that while the Hungarian government would continue to cooperate with Brussels on the issue, recent events have shown that the government “needs to act faster to defend the people.” She also lamented that tech companies “switch off bakers, hairdressers, pensioners, teachers, SMEs, and state leaders,” and concluded that this “deliberate, ideological or business-motivated digital damaging can no longer happen without consequences in Hungary.”
Commissioner Johansson calls for mandatory removal of child sexual abuse material
On 25 January, Home Affairs Commissioner Ylva Johansson stated that the upcoming legislation on child sexual abuse online should oblige internet companies to “report and remove” such material. She stated that her aim while working on permanent legislation on the issue was to make it obligatory for Internet companies to report and remove child sexual abuse. Internet companies are currently under no legal obligation to report and remove online child sex abuse and have instead been doing so voluntarily. The European Commission opened a consultation in December on the preliminary impact assessment of an upcoming law to limit the spread of child sex abuse material online. The Commissioner’s comments indicate that the Commission is no longer considering rules that would allow online platforms to continue voluntarily implementing measures to report and remove child sexual abuse material, which was the preference of some large tech companies. Finally, the Commissioner called for the involvement of Member States, online platforms, Europol and academia, as until the rules enter into force, children depend on their “voluntary efforts.”
Leaked document on ePrivacy derogation negotiations
Ecommerce Europe got access to a leaked document (four-column document), showing the positions of the European Parliament, the European Commission, the Council of the EU, as well as possible compromises regarding the ePrivacy derogation, which is currently in the trialogue stage of negotiations. The document demonstrates significant divergence between the positions of the Parliament and the Council, and the Portuguese Presidency is expected to seek another negotiating mandate from the Council in order to continue negotiations with the Parliament. On 28 January, attachés at the Council’s Telecom Working Party were invited to provide feedback on potential changes of the document. In the document, the Portuguese Presidency renews its commitment to reaching an agreement on the file as soon as possible.
S&D to take the lead on the DSA and EPP on the DMA in the European Parliament
On 22 January, the Chair of the European Parliament’s Internal Market Committee (IMCO), MEP Anna Cavazzini (Greens/EFA, Germany), announced that the Socialists and Democrats Group will take the lead on IMCO’s draft report on the Digital Services Act (DSA), while the European People’s Party Group will be in charge of the draft report on the Digital Markets Act (DMA). Both the DSA and the DMA have been provisionally allocated to IMCO, however, that decision has been challenged by the Legal Affairs Committee (JURI) for the Digital Services Act, and the Economic Affairs Committee (ECON) is expected to do the same for the DMA. Meanwhile, the EPP has already selected MEP Andreas Schwab (EPP, Germany) as a rapporteur for the DMA draft report in IMCO. At a Committee Meeting in early January, MEP Schwab praised the DMA Proposal but stated that Articles 5 and 6, defining the black and grey list for gatekeeper platforms, were “still a bit messy,” and called for “a light-touch regulation with clear direction towards fair competition.” Furthermore, the EPP has published its position paper on the DSA, touching upon targeted ads, Know-Your-Business-Customer principle, liability and online identity. The position paper argues that the DSA should focus only on illegal content, arguing that harmful content deserves “a targeted (co-)regulatory approach outside of the DSA in order to clearly separate the procedures of tackling harmful or illegal content”. In terms of the DSA, MEP Christel Schaldemose (S&D, Denmark) is considered a front-runner to become the rapporteur of the file in IMCO, and MEP Arba Kokalari (EPP, Sweden) will be the shadow rapporteur for the EPP on the DSA. In terms of opinion rapporteurs in other EP Committees, MEP Carlos Zorrinho (S&D) will be rapporteur for the DMA opinion and MEP Henna Virkkunen (EPP, Finland) – for the DSA opinion in the Parliament’s Industry Committee (ITRE).
French MPs adopt amendments to DSA-type draft national bill
On 21 January, French Members of Parliament (MPs) adopted at Committee level an amendment put forward both by the government and the rapporteur MP Laetitia Avia from La République en Marche. The amendment anticipates some of the Digital Services Act’s duty of care obligations to the draft legislation on political separatism that would add some of the Digital Services Act’s obligations in French law. The amendment is part of a text on countering radical Islam, known in France as the bill on “republican principles” (and initially called the “separatism” bill). The text focuses on duty of care obligations and does not suggest setting specific removal deadlines for illegal content. The scope is limited to social media platforms and search engines and does not cover online marketplaces, internet service providers and cloud services. Mirroring the DSA, the French government suggests to set more obligations for the largest platforms, including yearly risk assessments, and to set fines of up to 6 percent of the global annual turnover. The thresholds defining the largest platforms would be decided at a later stage. The French audiovisual regulator (Conseil supérieur de l’audiovisuel) would be in charge of enforcing the new measures. The new article would only apply until December 2023, which is the anticipated deadline for the DSA’s adoption at EU level. The French national bill anticipating the DSA also provisions for the new rules to apply to platforms established in another EU country, thus departing from the e-Commerce Directive’s (ECD) country of origin principle. According to French Digital Affairs Minister, Cédric O, Germany is also in favour of reviewing the country of origin principle to avoid certain GDPR enforcement shortcomings. The European Commission declined to comment on the draft bill. but a Commission spokesperson stated that “when proposing new legislation, Member States must comply with existing EU law, including the provisions on the country of origin principle in the ECD.”
New German gatekeeper rules entry into force
On 19 January, the German Bundesrat approved the entry into force of the reform of national competition law, adopted on 14 January. The reform makes Germany the first country in the world with preventative rules tailored to counter the market power of large digital platforms. The tenth reform of the Act against Restraints of Competition includes the introduction of Article 19a, which will allow the German Competition Authority (Bundeskartellamt) to identify companies “of paramount significance to competition across markets,” which will be prohibited from a number of practices, similar to the “gatekeeper” regime the European Commission has proposed in its Digital Markets Act. The document also contains two new prohibitions for the platforms not to take measures that hinder other companies in their business activities and not to demand advantages to other companies that are not in reasonable proportion to the reason for the demand. The legislation’s entry into force allows the German Competition Authority to start drafting its list of companies “of paramount importance to competition across markets,” which could include only three companies for the first 5 years before it is reviewed. German Economy Minister Peter Altmaier stated that “for the first time in the world, we are setting clear requirements in competition law for large digital companies.” The European Commission’s Executive Vice-President Margrethe Vestager used the occasion to warn Big Tech companies that if they did not support the EU measures, they would have to operate within a “completely fragmented European legal system.” Besides France and Germany, Poland and Austria have also announced plans for new legislation curbing the market power of large digital companies.
Update on ePrivacy Regulation developments in the Council of the EU
The Portuguese Presidency’s Proposal for the ePrivacy Regulation, distributed among national delegations within the Council of the EU on 5 January, has received broad support among EU governments. According to three EU officials, the Portuguese Presidency aims to take the text to the Committee of Permanent Representatives (COREPER) in February. The most contested part of the proposal concerns the inclusion of a provision allowing “compatible further processing” of data, to which Germany remains opposed. It is yet unclear whether Germany will succeed in building a blocking minority in the Council. However, the meeting of the Telecoms Working Party in the Council on 28 January has been postponed to February, signalling that the Portuguese Presidency needs more time to work on the proposal. Still, it appears that a majority of EU Member States support the proposal and that the delay is due to minor changes and not a major overhaul of the current proposal.
Commission to publish new AI rules in March
According to Kim Jørgensen, head of cabinet of Commission Executive Vice-President Margrethe Vestager, the Commission will publish new AI rules in March 2021 and a new proposal to revise the EU’s product liability rules in the second half of 2021. The AI rules will set strict rules for “high-risk” AI applications that will take into account safety and fundamental rights. The Commission is also considering a ban on some controversial technologies, such as facial recognition in public places. The Product Liability Directive was last updated in 1985, and the European Commission is planning on expanding its scope to apply to AI and Internet of Things products. The European Parliament’s Legal Affairs Committee (JURI) has warned the Commission against overburdening AI civil liability rules in case it could “hamper innovation.” The Commission has also identified gaps in the General Product Safety Directive, which will likely undergo adaptations in the future to capture new technologies such as AI. On the European Parliament’s side, the Special Committee on Artificial Intelligence in a Digital Age (AIDA), has named MEP Axel Voss (EPP, Germany) as rapporteur for the mid-term and final special reports on AI. The report will define common EU objectives for artificial intelligence and recommendations on how to reach these goals.
Commission delays Communication on Business Taxation
The European Commission has postponed the publication of the Communication on “Business Taxation for the 21st Century” for March 2021, as opposed to 3 February, as previously expected. The strategy paper is set to define the EU’s strategy for fighting tax avoidance and evasion. According to Commission Executive Vice President Valdis Dombrovskis, while no concrete date has been set yet, the communication will be published sometime in March and will outline the next steps of the Commission’s agenda on digital and corporate taxation, followed by the proposal for a digital levy later this year, in case the negotiations at the level of the Organisation for Economic Co-operation and Development (OECD) are not successful.
European Commission presents DSA and DMA proposals to EP’s IMCO Committee
On 11 January, representatives of the European Commission presented the two proposals for the Digital Services Act (DSA) and the Digital Markets Act (DMA) to members of the European Parliament’s Internal Market Committee (IMCO). Prabhat Agarwal, Head of Unit for E-Commerce & Online Platforms at DG Connect, presented the DSA, stating that the new proposal “builds on the principles of the e-Commerce Directive, maintains the liability exemptions — with some important updates and adjustments — maintains the important general monitoring prohibition, respects the country of origin principle but builds on top of the country of origin principle a robust system of enforcement”. His presentation prompted an array of questions from MEPs around the issue of cross-border removal orders, which would allow one EU country to demand the removal of content from a website hosted in another country according to its own national laws, the use of “trusted flaggers”, consumer protection, freedom of speech, and Big Tech monopolies. Prabhat Agarwal and Inge Bernaerts, Policy Director at DG Competition, presented the DMA proposal, on which DG Competition is collaborating with DG Connect. Ms. Bernaerts clarified that the DMA acted in combination with other instruments, such as competition rules and consumer protection legislation. She stated that regarding the gatekeeper designation process, the Commission had three main criteria: the impact on the internal market, the importance as a gateway service and the entrenched and durable position. These referred to the quantifiable criteria, and if met, the gatekeepers were required to notify the Commission. If the required quantifiable criteria were not met, there were also options for qualitative designation and a subset of obligations could also be imposed on emerging gatekeepers. Some MEPs criticised the composition of Articles 5 and 6 of the proposal, identifying the criteria for “gatekeepers” and asked for a more light-touch regulation with a clear direction for fair competition, Additionally, MEPs demanded more tools, such as interoperability for messaging services to ensure fair competition and empower consumers.
DSA and DMA provisionally assigned to EP’s IMCO Committee
The two proposals on the Digital Services Act (DSA) and the Digital Markets Act (DMA) have been provisionally assigned to the European Parliament’s Internal Market Committee (IMCO), with rumours circulating about the EPP taking the lead on the DMA, with MEP Andreas Schwab (EPP, Germany) speculated as a front runner, and S&D on the DSA. However, the leadership of both files can be contested by a rival committee, should they feel better placed to tackle the provisions set in the measures. Should this eventuality occur, a negotiation process between committee chairs is launched, in an attempt to hash out a deal for the leadership of the files. IMCO Committee’s Chair MEP Anna Cavazzini (Greens/EFA, Germany) expressed confidence that both texts will remain under the remit of the Internal Market committee, and regarded the regulation of the digital economy as one of the committee’s two biggest priorities, along with making the Internal Market fit for the green deal. She also said the Commission had taken the right approach in highlighting the importance of preserving fundamental rights, including the freedom of expression, as part of the Digital Services Act. During an online event this week hosted by Access Partnership and Fourtold, MEP Alex Agius Saliba (S&D, Malta), rapporteur for IMCO Committee’s initiative report on the Digital Services Act last year, said that while the S&D group in the European Parliament is yet to put forward any contenders to lead the new report from IMCO on the DSA, he believed that his experience in 2020 could lend itself well to a potential leadership role. He also raised concerns on the appointment of so-called ‘trusted flaggers’ in the DSA, stating that they will be able to report illegal content to which platforms will have to react with priority, but there have been concerns over the independence of such individuals.
German Parliament approves rules to counter the market power of large digital platforms
On 14 January, the German Parliament approved a reform of national competition law that would make Germany the first country in the world with preventative rules tailored to counter the market power of large digital platforms. The tenth reform of the Act against Restraints of Competition includes the introduction of Article 19a, which will allow the German Competition Authority (Bundeskartellamt) to identify companies “of paramount significance to competition across markets,” which will be prohibited from a number of practices, similar to the “gatekeeper” regime the European Commission has proposed in its Digital Markets Act. The text includes a number of illustrations of some of these prohibitions, a practice unusual in German law and said to be inspired by the European approach. The document contains two new prohibitions for the platforms not to take measures that hinder other companies in their business activities and not to demand advantages to other companies that are not in reasonable proportion to the reason for the demand. Appeals under the 19a regime are proposed to be brought immediately to the Federal Supreme Court, which will rule in “first and last instance.” The reformed rules also specify that a company can only be labelled of “paramount significance” for a period of five years. Keeping the German regime in place after the DMA enters into force could expose Bundeskartellamt decisions to claims by the platforms that only the EU has jurisdiction to regulate gatekeepers. The DMA seeks to harmonise gatekeeper rules across the bloc, saying that “Member States shall not impose on gatekeepers, further obligations by way of laws, regulations or administrative action for the purpose of ensuring contestable and fair markets.” While the EU is said to have come to an understanding with Germany that its regime is considered an extension of competition law and therefore exempted from the harmonisation rule, legal experts agree that the German rules are at least a grey zone between competition law and regulation.
Member States rushing to adopt national digital rules prior to DSA and DMA adoption
Besides Germany, France and Poland also have announced plans for new legislation curbing the market power of large digital companies. In Poland, that involves the country’s justice ministry preparing social media laws that would prohibit social media platforms to remove content that does not specifically break the Polish rules. The Polish government is determined that this is an effort to preserve freedom of speech online, but Commission officials are concerned how such provisions would go alongside DSA efforts to force the same companies to delete illegal content. In a statement, the Commission only acknowledged that it was aware of the upcoming Polish law, without providing further details. In France, Digital Minister Cédric O told Renew Europe MEPs that the Digital Services Act’s main obligations would be included in the France’s own bill on political “separatism,” which aims to rein in radical Islamist content, to be discussed in parliament in the coming months. Laetitia Avia, the Member of Parliament who drafted the country’s failed hate speech law last year, will be in charge of the new text’s online platform section in the National Assembly. Such national developments question whether the DSA/DMA will be viewed as a regulatory basis, allowing countries leeway to go further in domestic legislation, or as a cap that stops governments from pursuing their own stances on content and competition rules.
European Commission launches Roadmap and Public consultation on EU digital tax
On 14 January, the European Commission has launched a roadmap on ‘a fair & competitive digital economy – digital levy’, which will run until 11 February. The initiative aims to gather feedback on the introduction of a a digital tax to address the issue of fair taxation of the digital economy, and presents an Inception impact assessment on the application of the potential levy. Furthermore, today, the Commission launched a public consultation on the file, to gather stakeholders’ views on the main problems related to taxing the digital economy, for Member States and business. It also asks for feedback on possible solutions to these problems. The deadline for the public consultation is 12 April. In addition to the introduction, the consultation is structured as follows:
- The 2nd section presents some general background information on the digital economy.
- The 3rd part of the questionnaire asks for some background information about the respondent in order to better understand their perspective.
- The 4th part covers the current international taxation framework and its shortcomings.
- The 5th part covers possible solutions to address those shortcomings.
- The final section allows the respondent to upload a position paper or any kind of relevant document to better explain their views.
The Commission states that the EU needs a modern, stable regulatory and tax framework to respond to the developments and challenges of the digital economy. While digitalisation should be encouraged and promoted as it can increase productivity and benefit consumers, the Commission argues that digital companies should also contribute their fair share to society. The Commission will only launch a proposal for an EU-wide digital tax if the negotiations on a global digital services tax at the Organisation for Economic Co-operation and Development (OECD) do not reach an agreement until June 2021.
OECD hosts public consultation meeting on the reports on the Pillar One and Pillar Two Blueprints
On 14 and 15 January, the Organisation for Economic Co-operation and Development (OECD) hosted a public consultation meeting on the Reports on the Pillar One and Pillar Two Blueprints. As part of the ongoing work to develop a solution to the tax challenges of the digitalisation of the economy, the OECD/G20 Inclusive Framework on BEPS invited public comments on the Reports on the Pillar One and Pillar Two Blueprints. The public consultation meeting focused on the key questions identified in the consultation document and raised in the written submissions received as part of the consultation process. During the meeting, big digital companies called for simplifying a global tech tax to ensure the proposal will work and avoid overlapping national levies. Industry representatives criticized the complexity of some aspects of the two pillars and argued for a clear and practical solution to allow businesses to comply and enable all countries to implement in a way that reduces disputes and prevents double taxation. The global tax aims to ensure that big digital and multinational companies pay their share of tax, in the places where they generate profit — not necessarily where they book them. The coming negotiations will give a sign of whether the new U.S. administration will bring a change of stance that could resolve last year’s impasse with the EU and result in a deal by this summer.
Ecommerce Europe presents today its Priority Paper 2021 aimed at our ambition for taking European Digital Commerce to the next level. Marked by the COVID-19 outbreak, 2020 was an eventful year, which has highlighted the importance of digitalisation across all areas of the economy and society. In these difficult past months, e-commerce has been crucial for the continuation of economic activities and society in Europe. The e-commerce sector has proven resilient and many businesses have gone through an accelerated digital transformation, leading to changes in consumer behaviour and the development of new seamless commerce solutions, such as digital payment and omnichannel logistics solutions such as contactless click-and-collect. In parallel, the European Commission has reinforced its ambitions for a more digital and greener Europe via the proposed twin transitions in its recovery plan, stating that investment in digital and sustainable infrastructure is required to rebuild a strong European economy.
In the long run, the pandemic is expected to have triggered permanent social and economic changes. However, while the COVID-19 crisis has revealed the strengths of the Single Market, it has also highlighted its weaknesses. Given the increasingly cross-border nature of digital commerce, European businesses have faced barriers to implement new solutions across the Union due to regulatory fragmentation and diverging approaches towards the crisis. Ecommerce Europe’s Secretary General, Luca Cassetti, commented:
“EU policymakers need to adopt a forward-looking approach to allow innovation and stimulate digital and sustainable development. The recent crisis has also strengthened the need to alleviate unnecessary regulatory burdens, and companies in Europe need the support of the European Union to be able to compete on an increasingly competitive global market. Therefore, in this priority paper, Ecommerce Europe has identified 11 main priorities on which we will focus for 2021 to strive for a future-proof regulatory framework that will allow the European Digital Commerce Sector to flourish. In addition, Ecommerce Europe will continue advocating for simpler, more harmonised EU rules and better enforcement.”
With the aim to support the creation of a framework for European companies to flourish, Ecommerce Europe has translated its policy focus for the upcoming year into the following 11 main priorities for the European Digital Commerce Sector:
- Seamless shopping: Adopt a channel-neutral approach
- Role of platforms: Safeguard their innovation potential while supporting EU companies
- Globalisation: Restore the level playing field between EU-based and non-EU-based players
- Embrace the opportunities digital commerce offer for a more sustainable economy
- Ensure alignment between ePrivacy and data protection regulations
- Step up efforts for a global solution for the taxation of the fast-digitalising economy
- Facilitate a more harmonised parcel delivery regulatory framework
- Build an innovative and competitive cross-border payment landscape
- Leverage opportunities offered by big data and new technologies
- Provide SMEs financial support and reduce administrative burdens
- Support companies’ digital transformation with more investments in e-skills and infrastructures.
To know more about our priorities, please download our Priority Paper 2021.
Portugal takes over the Presidency of the Council of the EU
On 1 January 2021, Portugal took over the rotating presidency of the Council of the European Union for the next six months. The Portuguese Presidency is the second one from the Trio Presidency, in conjunction with Germany and Slovenia, and is expected to continue to “deal(…) with the pandemic and its social and economic consequences” as well as work for a more resilient Union, as set in the Trio’s Programme. The Portuguese Presidency chose the motto: ‘Time to deliver: a fair, green and digital recovery’, and presented its Official Programme, divided into five main pillars: Resilient Europe; Social Europe; Green Europe; Digital Europe; and Global Europe. The Portuguese Presidency will have to implement the Multiannual Financial Framework (MFF) agreement for 2021-2027, together with the Next Generation EU recovery instrument, as well as oversee the formal conclusion and initial implementation of the agreement reached on the future relationship with the UK. Specifically looking at the Presidency’s Digital Priorities, the proposals for the Digital Services Act (DSA) and the Digital Markets Act (DMA), adopted by the Commission last month, will be the focus of the Presidency’s activities, combined with work on data governance laws and cybersecurity legislation. The Council preparatory bodies have already started work on the two files last week, with the DSA being discussed in the Internal Market Working Party and the DMA in the Competition Working Party, both falling within the remit of the Competition Council formation. Furthermore, the Presidency is expected to work on Artificial Intelligence and the ePrivacy Regulation, for which it has already sent out a proposal.
French reaction to the Digital Services Act and the Digital Markets Act calls for future-proof legislation
The French government welcomed the two long-awaited draft regulations and the European Commission’s “strong ambition” to “put an end to the irresponsibility of online platforms”. During the upcoming negotiations, France will remain attentive to ensure that the Digital Markets Act (DMA) is sufficiently agile and flexible to adapt to the constantly changing business models and to allow for rapid action, the government said. As for the Digital Services Act (DSA), France will ensure that the text guarantees the proper involvement of all Member States in the supervision mechanism. According to Clément Beaune, Secretary of State for European Affairs “the French Presidency of the European Union in the first half of 2022 will be an opportunity to bring these much-needed rules to fruition.” France’s Digital Minister Cédric O defended the DMA in an op-ed, stating that “only public authorities hold the monopoly over the common interest”. He also urged the Parliament and the Commission not to weaken the two proposals, as they would allow ‘Europe to make history of economic regulation.” Today, O and Beaune will present France’s position on the file to Renew Europe MEPs.
Germany requires rules for harmful content in reaction to the Digital Services Act and the Digital Markets Act
German Economy Minister Peter Altmaier welcomed the DSA, stating that it fit Germany’s own recent attempt at curbing market-dominating digital services. However, ahead of the presentation of the DSA and the DMA, Germany released a 17-page non-paper on the plans, which gave an insight into their standing on the debate over how illegal content and harmful content is moderated. The paper states that new rules for the digital economy need to go beyond just regulating illegal goods and content, as the dissemination of information and content that is not (yet) illegal can also be harmful, particularly disinformation and activities relevant to the protection of minors. With regards to the scope for ex-ante regulation as part of the DMA, the German government suggested that also so-called ‘significant intermediaries’ may also have to come under the new rules. Meanwhile, Germany has presented a draft bill on competition reform in the country that aims to address the dominance of digital market power through data practices, as well as amendments to other areas including merger control and cartel investigations. German lawmakers agreed to approve the bill this week. However, the EU’s Digital Markets Act could limit the extent to which Member States are able to pursue their own initiatives in gatekeeper regulation, being as it is an Internal Market tool and therefore bound by its legal basis to foster greater harmonisation across the EU. Speaking as part of an online panel hosted by DOT Europe and ITI recently, Gökhan Cetintas of the German Economy Ministry conceded that issues could arise in this field in the future.
Ireland urges the Commission to prove the need for ex-ante regulation with regards to the DSA and DMA
Ireland, the European home of some of the world’s largest tech giants, has pushed back against the idea of imposing ex-ante regulation against gatekeeper platforms. In a position paper published in September 2020, the Irish government highlighted the fact that it had blocked attempts to include ‘blacklisted’ practices “without merit and evidence of economic harm during the negotiations on the Platforms-to-Business Regulation.” The government urges the Commission’s DG CNECT and DG GROW to demonstrate that innovation is being stifled by so-called ‘gatekeeper platforms’ and that digital markets are not contestable due to exclusionary behaviour in order to justify the need for ex-ante intervention. You may find information on the positions of other EU Member States regarding the DSA and the DMA here.
Portuguese Presidency presents ePrivacy Proposal
On 5 January, the Portuguese Presidency of the Council of the EU sent national delegations its proposal for the e-Privacy Regulation, discussed during the meeting of the Council’s Telecommunications Working Party on 7 January. In the document, the Presidency states that it aims to “conduct swift discussions” and further align the text with the General Data Protection Regulation (GDPR). The text does not include legitimate interest as a legal ground (the expectation is that this will not be brought back). Unlike the previous German proposal, the Portuguese one includes provisions allowing communications metadata to be processed (Article 6) and “to use processing and storage capabilities of terminal equipment and the collection of information from end-user’s terminal … for further compatible processing” (Article 8). These changes make the proposal more business friendly but may be opposed by Member States with a more hard-line position on privacy. The basis of 'performance of a contract' has been brought more in line with the wording in the GDPR: 'provide an electronic communication service' instead of 'to achieve the transmission of the communication' and the wording of the basis 'legal obligation' has also been more aligned with the wording of the GDPR. An important inclusion is the deadline of one month to appoint a representative in the EU (for providers from outside the EU). The associated sanction option has also been aligned with the GDPR (Article 83 (4) (a)). Finally, the period of entry into force and application has been halved from two years to one year. Portugal is the ninth Council Presidency attempting to reach agreement on the e-Privacy file, which was first discussed in 2017, and was supposed to enter into application together with the GDPR in 2018. The European Parliament reached a position on the file in October 2017 and has been waiting for the Council to adopt its General Approach so that trialogue negotiations can finally start.
Tech companies to continue scanning content despite lack of agreement on ePrivacy Directive derogation
After the entry into application on 21 December 2020 of the EU Telecommunications Code, broadening the scope of the e-Privacy directive to include online messaging services, monitoring online content for child sexual abuse materials by the companies hosting the content has become illegal. Despite the lack of agreement between the European Parliament and the Council regarding an interim ePrivacy Regulation, granting a derogation to fight against such content, certain Big tech companies such as Microsoft, Google and LinkedIn have stated that the only reasonable approach is to remain steadfast in honouring the safety commitments to users. They argue there is “no articulated, harmonised regulatory approach for the moment” and urge policymakers to quickly come to a solution.
European Commission publishes Digital Services Act and Digital Markets Act proposals
On 15 December, the European Commission published the proposals for a Regulation on a Digital Services Act (DSA) and for a Regulation on a Digital Markets Act (DMA). The DSA, which will also apply to platforms outside the EU if they target European consumers, includes rules for online intermediary services. The obligations of different online players differ depending on their role, size and impact in the online ecosystem. The proposal will harmonise notice-and-action mechanisms across the EU and platforms with at least 45 million users will face more obligations, including on cooperation with regulators and data access requirements. As expected, the DSA also includes Know-Your-Business-Customer obligations, a Good Samaritan principle and a new enforcement mechanism. Tech companies that do not comply with the legislation could be fined up to six percent of their annual revenue.
The DMA establishes a set of narrowly defined criteria for qualifying a large online platform as a so-called “gatekeeper”. It aims to tackle problems regarding large, systemic online platforms, imposing new obligations that determine how other companies interact with online users, to ensure these platforms do not stop others from competing for users. A company with European revenues of at least €6.5 billion or at least 45 million users in the EU could fall into the new category, allowing for tougher regulatory oversight. Companies operating in at least three EU countries, with a significant impact on the internal market, and maintaining an entrenched market position would be included. The DMA will also ban self-preferencing, and gatekeepers’ ability to block others from accessing their online marketplaces like app stores, as long as these rivals comply with conditions that apply to all firms present on the service. For more detailed information, please, consult the Commission’s Q&A pages on the DSA and the DMA. The Commission’s proposals on the DSA and DMA are open for feedback until 15 February 2021.
Ecommerce Europe publishes preliminary reaction to the Digital Services Act Proposal
On 16 December, Ecommerce Europe published a press release, outlining the association’s preliminary reaction to the European Commission’s Digital Services Act Proposal. According to Luca Cassetti, Secretary General of Ecommerce Europe, the association welcomes the publication of the European Commission’s DSA Proposal, although its provisions and their impact on the e-commerce sector still require a more detailed and careful assessment. Ecommerce Europe flagged as one of the main challenges the allocation of responsibilities and obligations on product safety in case of products offered on online marketplaces by professional sellers that are based outside the EU. In the proposal, the Commission introduces an obligation, similar to the Market Surveillance Regulation, that providers of intermediary services established in a third country that offer services in the Union should designate a legal representative in the EU, to allow for effective oversight and, where necessary, enforcement of this Regulation in relation to those providers. Although Ecommerce Europe still needs to assess the implications of such an obligation, the proposal to introduce the concept of a legal representative for a non-EU-based intermediary service provider may be a solution. Nevertheless, Ecommerce Europe would like to stress that there could also be other approaches worth considering. From a more general perspective, Ecommerce Europe appreciates and supports the Commission’s focus on fostering EU harmonisation, to tackle the issue of legal fragmentation, for instance on notice and action mechanisms, and on strengthening enforcement, although the details of these provisions still need to be carefully assessed. Furthermore, Ecommerce Europe welcomes that the country of origin principle has been maintained, since this fundamental principle has been providing legal certainty to businesses operating cross-border in the EU, relieving some burden for SME businesses and helping them in expanding on a European scale. For further information, please consult Ecommerce Europe’s position paper on DSA (September 2020). The association is currently working on further analysis of the implications of the DSA and the DMA proposals and will come up with update of the DSA paper in due time, as well as with a new paper on the DMA proposal.
ePrivacy Directive to apply to more electronic communication services as of today
As from 21 December 2020, the ePrivacy Directive will apply to a broader set of electronic communications services as defined in the European Electronic Communications Code, a separate reform that sets rules for internet communication services. Given that the European Parliament and the Council have not yet agreed on the Interim ePrivacy Regulation, which would allow tech companies to continue voluntarily tracking child sexual abuse online, currently online platforms cannot find, flag and respond to child abuse content. This has prompted some negative reactions from tech companies, urging for legislative changes that would allow them to resume their efforts in identifying this type of harm. On 7 December the EP’s LIBE Committee adopted MEP Birgit Sippel’s (S&D, Germany) report on the interim rules, but the report needs to be adopted by the EP Plenary before negotiations with the Council could begin.
ERGP publishes its Work Programme 2021
In early December 2020, the European Regulators Group for Postal Services (ERGP) published its Work Programme 2021, which puts forward 8 deliverable actions in the 3 Strategic Pillars of ERGP: Postal sector, Cross-border Delivery and Consumer issues. For Pillar I, the ERGP Work Programme will adopt and discuss in its next plenary meetings a report on online platforms and e-retailers, with the implications for the future regulatory framework. An important area of analysis will be the “Digital Services Act” package. For Pillar II, the ERGP will adopt a report on the Cross-Border Regulation implementation, to examine whether further harmonisation of rules is needed. Another report will cover issues related to interconnection and interoperability of postal supply chain in postal networks. A third report will look into the impacts of the postal sector on the environment and will explore the measures that postal operators could undertake to reduce them. For Pillar III, the ERGP will build on the results on the last public consultation to which Ecommerce Europe has contributed, and will analyse in depth the overall legal and contractual situation of consumers in the field of postal services in order to assess the need for further harmonisation and to develop recommendations for the revision of the European postal framework. Finally, the ERGP will hold in Brussels a Stakeholders Forum 2021, promoting the participation of national operators and sector associations, as well as market participants and regulators from other regions of the world.
First insights into Digital Services Act proposal
According to a leaked version of the Digital Services Act (DSA) proposal, expected to be published tomorrow 15 December, “very large platforms”, or those who have at least 45 million users across the EU, could face fines of up to 6 percent of total turnover if they do not comply with new obligations because of their “disproportionate influence” on internet users in the EU. The size of the fines will depend on the severity of the violations, how long they have been taking place and whether they recur. Large platforms will be required to carry out ongoing, and public, risk assessments about how they are combating illegal content on their networks. That process will be overseen by an independent auditor, and these companies will be required to have legal representatives inside the European Union to be held accountable in case of violations. Additionally, the Commission will require large platforms to provide greater transparency on online advertising, e.g. to disclose that something is an advertisement, on whose behalf it was placed and provide “meaningful information about the main parameters used to determine” why they were targeted. Under the proposal, existing national regulators, called Digital Services Coordinators, will be empowered to both oversee compliance and enforcement of the DSA. That process will be overseen through a cross-border group called the European Board for Digital Services, which will have a similar role that the separate European Data Protection Board has in enforcing the GDPR. The Commission will chair the Board, and while not having a voting right, it would be able to investigate and enforce the rules. Yet, under the draft proposal, the national regulator where firms have their main legal establishment will have initial oversight of the new regime. Regulators, both at the national and EU level, will have powers to demand more information or make on-site visits to companies' offices to ensure compliance. The failure to provide accurate information or to not allow inspectors into corporate premises could lead to fines of one percent of annual revenue.
The official proposal will be officially announced tomorrow, on 15 December. Under the European Union’s legislative process, the upcoming Commission’s announcement will likely go through years of consultation and undergo various changes, with final rules not expected by 2024, at the earliest. For more information on the DSA, please contact Maike Jansen (maikejansen@ecommerce-europe.
Sustainable and Smart Mobility Strategy as driver of a greener transport sector
On 9 December, the European Commission published the Sustainable and Smart Mobility Strategy, which aims to lay the foundations for a sustainable, digital and resilient EU transport sector. The Strategy ultimately contributes to achieving the ambitions set out by the European Green Deal to cut the transport-related greenhouse gas emissions by 90% before 2050. The Sustainable and Smart Mobility Strategy is accompanied by an Action Plan of 82 legislative and non-legislative initiatives focusing on 10 key areas, including boosting the uptake of zero-emission vehicles, renewable & low-carbon fuels, greening freight transport, and fostering innovation and the use of data and artificial intelligence (AI) for smarter mobility.
The most relevant initiatives for the e-commerce sector include the development of post-Euro 6 emission standards for cars, vans, lorries and busses, the adoption of the implementing legislation for the approval of connected and automated vehicles, and the proposal for a new regulatory framework to open up access to car data to mobility services. All the initiatives contained in the Strategy will be published between 2021 and 2025, with the aim of introducing at least 30 million zero-emission cars on European roads by 2030, and nearly all cars, vans, buses as well as new heavy-duty vehicles to be zero-emission by 2050.
Consorzio Netcomm organised workshop on Brexit and e-commerce
On 10 December, Ecommerce Europe’s Italian member Consorzio Netcomm, in collaboration with Alan Rhode (Taxmen.eu), organised an online workshop to discuss the new UK e-commerce rules on VAT and customs applying from 1 January 2021 and Brexit. The workshop took stock of the recent developments of the EU-UK negotiations, which depict an unlikely scenario of reaching a free trade agreement (FTA) before 31 December. In this event, the trade between EU and UK would be subject to WTO rules until a bilateral deal is found (the European Commission has published on the same day a set of contingency measures ensuring basic road and air transport connectivity between the EU and the UK). The reaching of an FTA would imply that customs will not be applied to EU products imported to the UK, while VAT would be applied. However, the FTA would not apply to non-EU products traded by European e-merchants. The webinar also provided an overview of the UK rules applying to VAT imports as of 1 January 2021, which include the removal of the VAT exemption for small consignments below £ 15, and the rule of VAT being collected at the point of sale for consignments below £ 135. The new rules also include a change in the role of online marketplaces (OMPs), which will be liable for collecting VAT of goods sold to UK consumers. The latter rule resembles part of the new EU VAT e-commerce package applying from 1 July 2021, for which OMPs will be responsible to collect VAT for non-EU imported goods below € 150. There are some exceptions to these rules, one of which is the trade flow with Northern Ireland, where the intra-EU rules will continue to apply. Lastly, Alan Rhode made clear that the new set of UK rules will apply to goods sold after 1 January 2021 and will not apply to goods sold before 31 December 2020 and shipped after 1 January.
EU contingency measures for no-deal Brexit
On 10 December, the European Commission published a set of contingency measures to ensure basic reciprocal road and air connectivity between the EU and the UK from 1 January 2021. The need for such measures lies in the uncertainty of whether a trade agreement will be found before 31 December 2020: if no deal is found, the contingency measures will cater for the period of absence of an agreement. If no agreement is reached at all, the contingency measures will end after a fixed period. The measures consist of four proposals for a regulation on road connectivity, air transport, aviation safety and fisheries, which the European Commission has put forward to mitigate some of the significant disruptions that are likely to occur on 1 January. The basic air and road connectivity measures will ensure the provision of certain freight transport and passenger services for 6 months, provided that the UK assures the same to EU hauliers. The proposed regulations will have to be agreed by Member States and the European Parliament in order to enter into force on 1 January 2021.
Upcoming Portuguese Council Presidency reveals priorities
Ecommerce Europe gained access to a document outlining the priorities of the Portuguese Presidency of the Council of the EU for the period between January and June 2021. According to the document, the upcoming Portuguese Presidency’s agenda will focus on five main priorities: Resilient Europe, Social Europe, Green Europe, Digital Europe and Global Europe. In the field of digital, the Presidency will prioritise initiatives that accelerate the digital transition as a driver of economic recovery and promote European leadership in innovation and in the digital economy. More specifically, attention will be paid to the universal development of digital skills as well as to the digital transformation of businesses and digital platforms, the areas of e-commerce, payments and taxation, health promotion and disease prevention, and distance learning in education. Furthermore, the Portuguese Presidency will encourage new digital solutions and strategies for the green transition, in the areas of health, education, research and innovation, industrial property, justice and mobility. The Presidency will promote a comprehensive digital cooperation strategy aligned with the United Nation’s 2030 Sustainable Development Goals, highlighting the EU’s role as a global actor, and ethical and trusted reference. Their agenda will, additionally, focus on the strategic creation of a European Data Entry Platform based on submarine cables.
Council to discuss digital taxation
According to leaked Council conclusions, in March 2021, Member States will consider how to proceed on digital taxation ahead of the mid-2021 deadline for the global talks on OECD level. The draft Council conclusions for digital taxation are planned to be signed off by EU Finance Ministers on 1 December. The statement intends to guide the European Commission on when and how to introduce an EU tax on tech companies in case the international negotiations fail to reach an agreement. The Commission has committed to presenting a proposal for an EU digital levy by June 2021, which will enter into force in January 2023. The leaked document confirms the European Council will assess the issue in March 2021 and invites the Commission to take the international negotiations into account.
Commission Executive Vice-President Vestager discusses the Digital Services and Markets Acts
On 26 November, Margrethe Vestager, Executive Vice-President of the European Commission, expressed unwillingness to ban companies from the Single Market in case of not living up to the obligations of the upcoming Digital Markets Act (DMA). She argued that she found it hard to believe that a business would choose not to follow the new obligations. In terms of a potential micro-targeting ban as part of the Digital Services Act (DSA), which the European Parliament had called far, Vestager defined it as ‘far-reaching’, stating that there were a number of other measures to explore before that. However, she supported the ‘timely debate’ on the topic, arguing that the DSA would bring much needed transparency for consumers who were struggling to understand why they saw the ads targeted at them. Finally, Vestager stated that the DSA will ‘not touch the Copyright Directive’, stating that it was the Commission’s priority to make sure the Directive was fully working in all Member States and that there would be a follow up to that. The DSA and the DMA are expected to be published on 9 December and the Commission is finalising the two proposals through a ‘leak-proof’ process to ensure that the drafts are not circulated ahead of their official publication.
Commissioner Breton discusses the Digital Services Act
On 24 November, Commissioner Thierry Breton stated at a conference that the Digital services Act (DSA) will require companies to appoint a legal representative in the EU to target European consumers and users. His comments are in line with voice from the European Parliament and Member States like Poland, who have asked for the same. Additionally, the Commissioner claimed that platforms would have to be more transparent about their algorithms, which will be regularly audited. In the remaining week prior to the publication of the DSA and the DMA, Breton will hold a round of meetings exclusively with chief executives. However, some industry members have expressed their discontent with the late timing of the meetings, as changes to the proposals at this point would be highly unlikely.
EPRS publishes guide to the national, regional and local positions on the DSA
On 26 November, the European Parliamentary Research Service (EPRS) published a briefing summarising the national, regional and local positions with regards to the upcoming Digital Services Act (DSA). According to the briefing, regional and national stakeholders call for modernisation of EU legislation on platforms, pointing out that the DSA should address the legal uncertainty and administrative burden stemming from the fragmentation of Union legislation. Local actors, especially cities, stress that the legislative proposal should tackle broader issues arising from the offering of online services that do not comply with local regulations, for instance on health, safety, housing taxation (e.g. short-term holiday rental) and urban mobility. Several cities call on the Commission to clarify exemptions to the principle of origin and to include under EU law explicit provisions to supply the country of destination’s competent authorities with all relevant information and data necessary to enforce applicable regulations. Governmental organisations at regional and national levels share the view that there is a need to impose special rules on online gatekeepers. They therefore strongly support the introduction of ex-ante obligations on platforms in a gatekeeper position.
Commission publishes its short-term review of the Geo-blocking Regulation
On 30 November, the European Commission published the conclusions of its first short-term review of the 2018 Geo-blocking Regulation, which prohibits unjustified geographical restrictions in the sale of goods and services within the EU. The report analyses the first 18 months of implementation of the Regulation, as well as the possible effects of the extension of its scope. It concludes that consumer awareness of the new rules has been good and that the role of competent assistance and enforcement bodies in Member States was key to ensure traders’ compliance. Furthermore, a number of important geo-blocking obstacles have been diminished, namely a stark reduction in barriers caused by location requirements, as well as a further decrease in restrictions that users faced when trying to access websites cross-border. Other internal market measures, including administrative tools to facilitate compliance with cross-border VAT in e-commerce, which will enter into force from 1 July 2021, and the harmonisation of consumer protection rules, which will enter into force in 2022, still need to materialise entirely before the full effects of the Geo-blocking Regulation can be observed. In terms of the possible extension of the Regulation to copyright-protected content, the Commission will launch a stakeholder dialogue with the audiovisual sector in order to discuss concrete ways to foster the circulation of, and improve consumers’ access to audiovisual content across the EU, before considering any follow-up measures. This dialogue will be part of the measures covered by the upcoming Media and Audiovisual Action Plan, expected on 2 December. Regarding other online content services partially covered by the current Regulation (such as access to music, e-books or videogames), the Report concludes that a further extension of the scope would not bring substantial benefits to consumers. The Commission invites all stakeholders and citizens to provide feedback on the Report and the accompanying evidence, also in view of the possible long-term effects of the COVID-19 on cross-border commerce, to the email address CNECT GBR REPORT.
German Presidency presented ePrivacy Progress Report
Today, on 23 November, during a meeting of the Council’s Telecoms Working Party, the German Presidency presented a (leaked) e-Privacy Progress Report instead of a new compromise proposal, after the Presidency’s last compromise text was strongly rejected by the same Working Party two weeks ago. This Progress Report indicates that the German Presidency will not finish the work on the proposal for an e-Privacy Regulation before the end of its term, passing it to the upcoming Portuguese Presidency, which will take over the rotating presidency in January. The e-Privacy proposal has been stuck in the Council for more than three years. In the Progress Report, the German presidency describes the following issues:
- Member States broadly supported the deletion of the “legitimate interests” as legal basis.
- Some Member States found the text too restrictive towards innovation and the permission for processing of metadata.
- Several Member States would have preferred the legal basis for the further compatible processing of metadata to be reinstated.
- Many Member States would have liked to see the data retention provisions kept as in the text of the Finnish Presidency. Others argued for a broader exemption of security related issues from the scope of the proposal.
- A number of Member States expressed the view that the Finnish Presidency proposal could be considered as the starting point for future negotiations.
Earlier this month, Ecommerce Europe co-signed a joint industry letter asking national ministers to reject the ePrivacy proposal and reintroduce compromises that were achieved in earlier texts. You can find the letter here.
Tensions around the adoption of the interim e-Privacy regulation
The interim e-Privacy Regulation, aimed at allowing platforms to continue scanning for child sexual abuse content after the EU Telecoms code enters into effect, might not be approved by the Code’s start date of 21 December, according to the European Parliament’s (EP) Rapporteur on the file, MEP Brigit Sippel (S&D, Germany). On 16 November, MEP Sippel informed the EP’s Civil liberties Committee (LIBE) that she hoped for a deal early next year and added that her work was made more difficult by the fact that the Commission introduced the interim e-Privacy proposal as late as September 2020. In her draft report, MEP Sippel clarified that the legislation should only apply to videos or images exchanged over messaging or email services and not to the scanning of text or audio communication. She urged for the scope to be limited to existing definitions of “child pornography,” which would exclude acts like grooming, and added that the Commission “does not wish to take a stance on whether current voluntary practices to detect and report child sexual abuse material are in fact legal under EU law”. MEP Sippel’s criticism comes soon after the European Data Protection Supervisor (EDPS) expressed his concerns about “interference with fundamental rights” if the derogation were enforced. On the other hand, Home Affairs Commissioner Ylva Johansson argued that the EDPS was “only talking about the privacy of users, thus disregarding the fundamental rights of abused children. Additionally, she expressed hope that the EP would not support MEP Sippel’s draft report as it weakens her proposal. The Council agreed on a negotiating mandate on 28 October, and are now waiting for the EP to reach their own position.
Commission gives mixed reviews to France’s repairability index
According to a leaked letter from the European Commission, France’s new repairability index, planned to enter into force on 1 January 2021, might be in violation of the free movement of goods principle of the EU. As part of the new law, many electronics producers would be obliged to display the repairability of their products ranked from 1 to 10, with 1 being the most difficult to repair. However, according to the Commission, such obligation might make the commercialisation of products more burdensome and restrict their access to the French market, thus violating Article 34 of the Treaty on the Functioning of the European Union (TFEU), which forbids importation restrictions. The French government has been lobbying the Commission to introduce similar rules at the EU level, resulting in a legislative proposal to ensure consumers are better informed on products’ sustainability, to be presented next year as part of the New Consumer Agenda, as well as an EU-wide right to repair, the detail around which are still unclear. While the Commission praises France’s sustainability efforts, it calls for proportionate measures and suggests that the repairability index enters into force as a voluntary measure for a year, before the EU presents its own rules.
Germany requires sellers to sign up to packaging register
On 18 November, Germany’s environment agency (UBA) announced that online platforms should be responsible for making sure sellers are signed up to the so-called packaging register. Packaging manufacturers in Germany have been obliged since 2019 to be on the register, which ensures they share in the costs of collecting and recycling waste. The goal is to encourage manufacturers to use more reusable and recyclable packaging. With the current recommendation, UBA wants to extend that reach by asking all online platforms to check whether the sellers have complied with the obligation to register in the packaging register.
Ecommerce Europe hosted a webinar on new UK VAT rules
On 19 November, Ecommerce Europe organised an interactive session to discuss the new VAT rules that the UK Government will introduce from 1 January 2021 for the clearance of goods at the border. This informative event aimed to allow Ecommerce Europe’s members, and the members of its national associations, to directly learn about the changes from the HM Revenue & Custom (HMRC), the UK tax & customs authority, and ask them any eventual questions. Moderated by Luca Cassetti, and with the interventions of Alan Rhode (Taxmen.eu), Walter Trezek (Co-Chair e-Logistics Working Committee, Ecommerce Europe) and Håkan Thyr (Fruugo), the webinar has provided a clear overview and insights about the details and procedures for registering VAT and selling to the UK from an EU country. You can access a detailed report of the event here and HMRC’s presentation here. If you have any questions on the new UK VAT rules, you can directly reach out to HMRC at firstname.lastname@example.org. We encourage national associations to share this information with their own members.
Ecommerce Europe attends webinar on Unlocking the benefits of digital services in Europe
On 20 November, Ecommerce Europe attended a webinar on the future of digital services in the EU. organised by the Computer and Communications Industry Association (CCIA). During the event, Oxford Economics presented its study on digital services in the EU, which identified the actions digital services providers are taking to tackle illegal and harmful content and offered policy recommendations for upcoming Digital Services Act. The presentation was followed by a panel discussion with the following participants: Ricardo Castanheira, Digital Counselor at the Portuguese Permanent Representation; MEP Karen Melchior (Renew Europe, Denmark); Justyna Romanowska, Digital Attaché at the Polish Permanent Representation; MEP Patrick Breyer (Greens/EFA, Germany). MEP Melchior called for stricter regulation on content curation and expressed concerns about the ex-ante ban of certain practices, which might harm competition. Mr. Castanheira emphasized the global importance of the upcoming Digital Services Act (DSA) and stated that while the majority of the existing frameworks needed to be maintained, some existing rules were in need of revision. MEP Breyer warned against user profiling practices and their effect on democracy and urged for the creation of open and interconnected networks. Ms. Romanowska called for a modernisation of the existing legal solutions, consistent and harmonized application of the rules and ensuring their application to third countries’ entities operating in the EU.
Two new CEN specifications expected in December
In December 2020, the European Committee for Standardisation (CEN) will publish two technical reports harmonising Universal Postal Union (UPU) specifications and the EU Customs Data Model. They will provide the guidance on how to convert electronic UPU declarations into the required EU Customs Data Model, and vice versa. This guidance will be useful in the context of new UPU regulations stipulating the mandatory advance digital declaration of all cross-border goods and merchandise, which will come into effect on 1 January 2021. Additionally, from 1 July 2021 all postal service operators in the EU, including courier, express and parcel delivery services, and customs agents, will be entitled to pre-lodge customs declarations in advance, electronically, according to the EU Customs Data Model. The two CEN technical reports will ultimately contribute to creating a Digital Single Market by establishing an open playing field for all postal and CEP operators for the presentation of low value consignments into the EU from July 2021. Please, access here a report from Walter Trezek with more information. Furthermore, in October 2020, CEN/TC331 “Digital Postal Services” has proposed a new work item named ”Digitalisation of postal transport documents”. The work proposed will build onto the work already conducted, linking up to the two technical reports mentioned above. It will also incorporate work to align customs / VAT / security and safety aspects of the postal (including Courier-, Express- and Parcel operators) delivery operations, moving away from paper to fully digital based processes. CEN/TC331 WG2 will start the work in the coming weeks, by reaching out to wider stakeholders to better understand the current state of play when using “postal transport documents” and how to best convert these documents into digital means. For more information on the above, please contact Walter Trezek at email@example.com.
Ecommerce Europe hosts a webinar with UK tax authority on UK VAT changes
Ecommerce Europe has the pleasure to invite you to an interactive session on 19 November 2020 from 14h30 to 15h30 (CET) with the UK’s tax, payments and customs authority (HMRC) on the new UK VAT rules. The event is aimed to provide information on the new model for the VAT treatment of goods that the UK government will introduce as of 1 January 2021. The new rules will strongly impact European businesses selling to the UK, and in order to facilitate the transfer to the new UK VAT regime, Ecommerce Europe has planned this interactive and informative session to allow its members, and the members of the national associations, to receive more information on the UK changes and ask HM Revenue & Customs any questions they may have. National associations are encouraged to share the invitation with their members. The event will be chaired by Luca Cassetti, Secretary General of Ecommerce Europe, with brief reflections on the topic that will be provided by Alan Rhode (Taxmen.eu), Walter Trezek (Co-Chair e-Logistics Working Committee, Ecommerce Europe) and Håkan Thyr (Fruugo). To sign up, please click here.
Digital Services Act and Digital Markets Act postponed to 9 December
The European Commission will publish the Digital Services Act (DSA) and Digital Markets Act (DMA) proposals on 9 December, instead of 2 December, as originally planned, according to EU officials. The DSA will be comprised of rules focused on content moderation, while the DMA will apply to so-called ‘gatekeeper’ platforms and aim to promote competition in digital markets. The delay might be due to the Commission’s independent Regulatory Scrutiny Board’s negative opinion on the DMA’s impact assessment in early November. Furthermore, as of today, the DMA is a separate item on the Commission’s Agenda, and not part of the DSA Package, as stated before.
German Presidency ePrivacy compromise text rejected by Council Telecom Working Party
On 11 November, Council’s Working Party on Telecommunications and Information Society (WP TELE) discussed and rejected the new German Presidency proposal for the ePrivacy Regulation. During the meeting, almost every Member State opposed the text in its current form. Most Member States called for the reintroduction of compatible further processing and opposed the stricter language introduced in Article 8. Several Member States (France, Czech Republic, Denmark, Belgium) criticised the text as a whole and specifically opposed the deletion of Articles 6 (1)(d) and 7 (4), which were deleted in view of the recent CJEU judgments on data retention. They called for a specific meeting on data retention, perhaps jointly with the Data Protection WP. Other Member States, such as Greece, Austria, Ireland and Cyprus said their comments were preliminary, but they still opposed the German text. As far as we know, only Slovenia supported the text, and Italy only supported the amendments related to data retention (Art 6(1)(d) and Art 7(4)). There appears to be a majority in favour of deleting legitimate interest. The German Presidency will now work on a revised draft, which will be presented ahead of the next WP TELE meeting, which will be on 23 and potentially also on 26 and 30 November. According to information from the German Economy Ministry, with the Telecoms Council already taking place on 7 December, chances are becoming smaller that an agreement in COREPER would be achieved still before the end of the German Presidency. On 10 November, Ecommerce Europe co-signed a joint industry letter opposing the ePrivacy compromise text and calling for the re-introduction of the compromises achieved so far through the collective efforts of the Council and stakeholders.
New German Presidency compromise text on the ePrivacy Regulation proposal
On 4 November, the German presidency of the European Council circulated the new compromise proposal for the ePrivacy Regulation. In the new text, “legitimate interest” is no longer proposed as a legal basis to process metadata and information on the users’ terminal equipment without consent (Articles 6 and 8). The proposal deleted “compatible further processing” as a legal basis for processing metadata without consent as well. The previous text stated that further processing for purposes other than for which the metadata were initially collected, could take place without the consent of the end users concerned, provided that the processing was compatible with the purpose for which the metadata were initially collected. Due to the European Commission’s proposal to adopt a temporary derogation to the ePrivacy Directive in order to fight child sexual abuse online, the new text also removed the article referring to the processing of communications data to fight against sexual abuse. In recital 20, the new text states that making access to website content conditional on user’s consent is accepted if an equivalent offer is given by the same provider that does not involve to consenting to data use. The proposal will be discussed on 11 November at the Council’s Telecoms Working Party and the German Presidency is determined to reach an agreement by the end of the year.
European Commission to introduce sanctions regime for illegal content in DSA
The European Commission will likely introduce fines and sanctions for platforms that repeatedly violate new obligations on managing illegal content online as part of the forthcoming Digital Services Act (DSA), according to an EU executive official. The move would bring the new EU rules closer to certain measures in the Member States, including Germany’s Network Enforcement Act, which introduces fines of up to €50 million for systemic failures to remove illegal content online. Certain platforms, defined under objective criteria, will be placed under new obligations to prove how they have dealt with the spread of illegal content online, and the success of their practices in doing so. “Obligations of means and results will be applied to certain platforms under which they will have to manage illegal content”, the Commission official said. “Fines and sanctions would come after repeatedly not respecting those obligations”. However, the liability exemption, part of the e-Commerce Directive, would remain in place, and the upcoming DSA is not expected to regulate harmful content. The DSA and the Digital Markets Act (DMA), which will introduce a list of ex-ante prohibited practices by digital gatekeepers, as well as a market investigation tool that could be used to examine how certain markets are prone to failure, are expected to be published on 2 December.
Germany plans to adopt national gatekeeper regulation, France still discussing how to proceed
On 4 November, Andreas Mundt, president of the German Competition Authority, stated that a new German law aimed at regulating gatekeeper platforms was on track of entering into force in early 2021. German Economy Minister Peter Altmaier filed his proposal
Council adopts Collective redress directive
On 5 November, following the agreement reached with the European Parliament in June 2020, the Council of the EU adopted its position at first reading on a draft Directive on representative actions for the protection of the collective interests of consumers within the EU. The directive requires member states to put in place a system of representative actions for the protection of consumers’ collective interests against infringements of Union law. It covers actions for both injunctions and redress measures. It empowers qualified entities designated by Member States to seek injunctions and/or redress, including compensation or replacement, on behalf of a group of consumers that has been harmed by a trader who has allegedly infringed one of the EU legal acts set out in the annex to the directive. These legal acts cover areas such as financial services, travel and tourism, energy, health, telecommunications, and data protection. The directive will apply to representative actions brought on or after the date of its application. In line with the early second reading agreement reached last June, the European Parliament should approve the Council’s position at first reading before the end of the year. The directive will then be deemed to have been formally adopted. It shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. Member states will have 24 months from the entry into force of the directive to transpose it into national law, as well as an additional 6 months to start applying these provisions.
EU leaders willing to delay EU digital tax proposal in accordance with OECD negotiations
European governments may be willing to postpone EU digital tax proposal to give more time for global talks, according to leaked draft Council conclusions for December’s Finance Ministers Council. The text was put forward by the German Presidency and national tax officials are negotiating on the document, ultimately intended to set a policy line for the European Commission to follow. The draft “asks the Commission to contribute to the preparatory work in the Council on the way forward at EU level in case there is no international consensus by mid-2021.” According to the director of the European Commission’s tax department, Benjamin Angel, mid-2021 should be perceived as the ultimate deadline. The statement could serve as notice that the EU will not go ahead on its own legislation early next year, after global negotiations at the Organization for Economic Cooperation and Development (OECD) did not result in a deal in 2020. Member States are largely divided into two groups. A group of mostly northern countries supports the delay, so the OECD can have more time for negotiations. Meanwhile, France is looking for support from other Member States who also want stronger language in the conclusions about moving ahead. France has already pledged to begin collecting its own tax on digital companies again in December 2020. The final conclusions are due in December, when finance ministers meet for their monthly Ecofin gathering. The Commission will use them as a guide for the EU digital tax, the proceeds of which will help pay down the debt it is raising for the recovery fund. For a proposal to come in June, the initiative has to be ready in the spring, Angel said, adding that an EU digital tax would not overlap with the OECD tax and no company would be asked to pay twice.
Commission provides details for Digital Services Act and Digital Markets Act proposals
On 28 October, according to a leaked document, the European Commission provided the Council’s Telecoms Working Party with a detailed update on the DSA and the DMA, both expected to be published on 2 December 2020. In terms of the DSA, the Commission plans to include due diligence obligations for all service providers – including notice and action mechanisms, a Know Your Business Customer principle, transparency of content moderation and cooperation with authorities – as well as ‘enhanced responsibilities for very large platforms to mitigate systemic risk.’ Individual complaints would be tackled through notice and action, administrative orders and court injunctions, while ‘systemic issues’ would be handled by a network of national authorities, with support from an EU structure. The DMA will consist of two pillars: prohibited practices and market investigation. Prohibitions will apply to gatekeeper marketplaces, app stores, social networks and their advertising services, online search engine and operating systems. Cloud services are not mentioned. The rules would be enforced by national regulators and an EU-level regulator, with the goal of addressing unfair practices by gatekeeper platforms as well as the weak contestability of markets. As previously mentioned, the first pillar would take the form of ‘self-executing blacklist and whitelist’ of practices, as well as a ‘greylist’, requiring assessment and the possibility of ‘tailored solutions’. The Commission is considering prohibiting companies from using their business users’ commercial data to compete with them; a prohibition on restricting access to data generated by business users; a ban on self-preferencing; and a ban on preventing business users from promoting offers available outside the platform (anti-steering). Gatekeepers would also have to ‘ensure third parties’ access to the same operating system or technical features that are available to the gatekeepers’ own products or services.’ The definition of gatekeeper would include the following criteria: size, dependency and entrenchment. The Commission did not provide any details about the DMA’s second pillar, dealing with market investigation (previously known as the New Competition Tool (NCT)).
Executive Vice-President Vestager addresses EP’s IMCO Committee
On 27 October, the European Commission’s Executive Vice-President Margrethe Vestager addressed the European Parliament’s (EP) IMCO Committee on the upcoming proposals for a DSA and a DMA, expected to be published on 2 December. She thanked IMCO’s rapporteur MEP Alex Agius Saliba (S&D, Malta) for his ‘rich and well-developed’ report and stated that the missions of the Parliament and Commission converged. She supported the idea that digital services needed the ability to innovate and scale-up within the EU and that post-COVID competitiveness was vital for EU’s recovery. She stated the need for more transparency and oversight as well as for more legal clarity and supported the validity of the core principles of the liability regime, the prohibition of general monitoring and the internal market clause. Vestager argued that the DMA would ensure the proper functioning of the internal market by promoting effective competition within the digital market through its two complementary pillars (see paragraph above). In terms of data, she stated that the European Strategy for Data aimed at creating a Single Market for data where more data would be available for novel and innovative services as well as societal objectives. In addition, a European data governance framework for sensitive data would be created. It would enable data sharing within the Union and across sectors, create trust in data sharing mechanisms, and facilitate the development of common European data spaces in key areas. Finally, regarding artificial intelligence (AI), Vestager stated that a trustworthy framework for AI in Europe would create new opportunities for businesses to innovate and scale-up as well as allowing citizens and consumers to benefit from products driven by AI services. These services would be safe and deeply rooted in European values, achieving a balance between mitigating the risks of AI and leveraging its potential.
Executive Vice-President Vestager delivers a speech on DSA and DMA
On 29 October, the Margrethe Vestager delivered a keynote speech at a Digital Clearinghouse webinar on the upcoming DSA and DMA. She discussed the rapid technological development over the past 20 years since the creation on the e-Commerce Directive (ECD) and the rise of the so-called ‘gatekeeper’ platforms, whose influence could ‘protect – or undermine – our democracy’. The upcoming DSA would update the ECD and require digital services to take more responsibility for dealing with illegal content and dangerous products. The upcoming DMA would provide the right legal framework and powers to keep digital markets competitive and fair, giving companies of all sizes, from all over Europe and beyond, a fair chance to succeed. You can access the full speech here.
Germany presents position on DSA and DMA
On 28 October, Armin Jungbluth, head of the digital services division in the German Economy Ministry, presented Germany’s position on the upcoming DSA and DMA proposal, speaking at an expert panel. With regards to large gatekeeper platforms, he stated that Germany supports the introduction of a blacklist of prohibited practices and the adoption of tailor-made remedies on a case by case basis, adding that a set of clearly defined qualitative and quantitative criteria was crucial for that instrument. Germany also supports the notion of establishing a pan-European regulator to oversee the enforcement of the bloc’s new competition capacities but does not share the French position of advocating for the potential breakup of tech giants. In terms of the DSA, Germany believes in preserving the core elements of the EU’s current set of rules featured in the 2000 e-Commerce Directive, including the ban on a general monitoring obligation for service providers as well as platform liability exemptions. However, Mr. Jungbluth also believes that such measures may have to be ‘complemented’ by ‘incentives to take responsibility’ for the platforms. He also stated that the ‘country of origin principle’ of the 2000 e-Commerce Directive, which states that service providers only have to comply with the laws of the member state that they are legally established in when operating across the bloc, should be ‘rethought’, similarly to the French position. Mr. Jungbluth concluded by stating that the new rules should not be to the detriment of SMEs in Europe, and particularly in the app developing community, many of which rely on the larger platforms to deliver their services.
Czechia, Slovakia and Hungary want to distinguish between ‘illegal’ and ‘harmful’ content in DSA
According to the Visegrad Four countries, the Commission’s upcoming Digital Services Act (DSA) is necessary but Europe must avoid censorship and any other forms of violation of the right to freedom of expression. One of the most pressing topics seems to be the removal of illegal and harmful content from social platforms. Czechia calls for a clear legal framework for how platforms become aware of illegal content – without removing it by monitoring users’ content. When it comes to liability of platforms, the current liability exemption for intermediary service providers should be maintained. However, there is an absolute need to distinguish between the notion of illegal content and legal but harmful content, as there usually is a distinction between criminal conduct such as sharing terrorist content and sharing disinformation, which many users share with faith it is true. For the Slovak government, the issue of the responsibility of online platforms for content, including a question of users uploads, is an important part of the legislation-in-making. Slovakia advocates for maintaining the principle of limited liability, as well as the prohibition of the obligation of general monitoring. Moreover, the Slovak government does not think that platforms should be responsible for illegal and harmful content, placed there by their users, of which they are unaware. Hungary’s Institute for Media Studies, the research body of the Media Council of the National Media and Infocommunications Authority (NMHH), believes that the relationship between freedom of speech and disinformation ‘poses a challenge to all legislators, both on the national and EU level.’ Non-factual statements, it says, are a part of discourses and ‘as such, cannot be excluded from the scope of the freedom of speech simply due to their lack of factuality’, so their presence in the public discourse can only be restricted based on strict criteria. Overall, Hungarian actors are generally cautious against removing a too wide range of content online, favouring an approach based on multiple methods, transparency from the side of online platforms, and an opportunity to seek legal remedies against content moderation decisions.
European Parliament’s Plenary adopts reports on Digital Services Act
On 20 October, the European Parliament’s Plenary adopted the three own-initiative reports on the Digital Services Act (DSA): JURI Committee’s Digital Services Act: adapting commercial and civil law rules for commercial entities operating online; IMCO Committee’s Digital Services Act: Improving the functioning of the Single Market; and LIBE Committee’s Digital Services Act and fundamental rights issues posed. EP’s JURI Committee Rapporteur Tiemo Wölken (S&D, DE) gained the MEPs' support for a potential ban on targeted advertising, and IMCO Committee’s Rapporteur Alex Agius Saliba (S&D, MT)’s report successfully introduced a legally enforceable notice-and-action mechanism for online services’ users to notify platforms about potentially illegal online content or activities. Despite an agreement among political groups not to table amendments in the plenary session, the European People’s Party (EPP), the Confederal Group of the European United Left/Nordic Green Left (GUE/NGL), and the Identity and Democracy (ID) groups suggested changes to IMCO’s report, and the GUE/NGL group also wanted to amend the JURI report. The EP Plenary adopted EPP’s amendment on IMCO’s report, stating that the DSA should be without prejudice to ‘regulation or administrative action in member states concerning the provision of audiovisual media services.’ The other amendments were rejected. Targeted advertising emerged as the most contentious topic during the debate and subsequent vote, with MEPs narrowly approving the paragraph in JURI’s report which called for the Commission to phase out targeted advertising, leading to a ban. The Socialists and Democrats (S&D), Greens and GUE/NGL groups voted in favour of the ban, while the EPP and the European Conservatives and Reformists (ECR) voted against and Renew Europe’s votes were split. The European Commission is expected to publish its proposals for the Digital Services Act and the Digital Markets Act on 2 December 2020.
France calls for the Digital Services Act to tackle both illegal and harmful content
According to a French non-paper on the Digital Services Act (DSA), France argues that the DSA should go beyond illegal content to tackle material that is harmful but legal. France argues that many platforms already remove legal yet harmful content if they go against their own terms of service, and that such practices should also be regulated and supervised. The paper calls for the DSA to not only set rules for content removals after notification, but also impose transparency and supervision obligations on the platforms’ content moderation algorithms and filtering tools. When it comes to disinformation, measures to reduce the content’s virality – such as downgrading its visibility or limiting sharing – would be more appropriate than removals and blocking, according to the document. France recommends that the 2000 e-Commerce Directive’s liability regime remain unchanged for illegal content and that a ‘duty of care’ should also apply to the largest platforms, which would cover the content moderation measures they take to enforce their terms of services. France also wants regulators and civil society to be able to audit moderation algorithms, which implies having access to data, and have more information about human moderation. Regulators should also have the power to issue injunctions and, in the case of systemic failure to remove content, sanctions. After a meeting with French Prime Minister Jean Castex, Internal Market Commission Thierry Breton stated that the Commission would make sure to take into account the French position. Furthermore, in an interview with Le Monde, Commissioner Breton stated that platforms repeatedly failing to remove illegal content could be prevented from operating in the European single market. In case the DSA does not go far enough on hate speech, the French government will add measures in its upcoming national bill on separatism, which aims to fight against radical Islam. The draft legislation is expected on 9 December, one week after the DSA (2 December) and it is currently unclear what kind of additional obligations would be included. The French Justice Ministry stated that the government wanted ‘to ensure anonymity is quasi-automatically lifted when [users] post hateful content.’
Ecommerce Europe meets with DG JUST’s Director Nils Berhndt
On 21 October, Ecommerce Europe met with Nils Berhndt, Director in charge of the “Consumers” Directorate E in the Commission’s Justice and Consumers department (DG JUST), and his colleagues, Jeroen van Laer (Sustainable Consumption) and Myriam Denieul (Consumer product safety) to discuss Ecommerce Europe’s position on the various aspects of the New Consumer Agenda. Mr. Berhndt started the meeting with a brief update from the side of the European Commission, outlining the timeline for the different elements of the New Consumer Agenda. The Communication on the New Consumer Agenda will be published on 11 November and the initiatives on the General Product Safety Directive (GPSD) and the Consumer Credit Directive are expected for May 2021. On the GPSD, Mr. Behrndt indicated that the Commission intends to make it a Regulation and that they will include an obligation for non-EU players to identify an authorised representative within the EU. Furthermore, he believes that extra rules should be included because several issues are not yet covered by the GPSD, such as new types of products that have been developed, binding rules on response time for platforms to notifications (similar to the non-binding one in the Product Safety Pledge), potential minimum tracing information in notices. On empowering the consumer for the green transition, the Commission recognised the role of consumers to make more conscious choices, but also stressed the role of businesses in this change. In particular, the Commission focused on providing reliable “green” information about products online, for instance through green labels. Finally, in November, Commissioner Reynders will discuss/propose an initiative on voluntary green pledges, which could include initiatives such as consumer nudging/information online. A letter will be thus addressed to business stakeholders to invite them to think together with the European Commission. Ecommerce Europe will organize a new meeting with the Commission afterwards to discuss the topic in further detail.
Ecommerce Europe discusses digital priorities with upcoming Portuguese Presidency
In light of the upcoming Portuguese Presidency of the Council of the EU (from 1 January to 1 July 2021), the digital team of the Portuguese Permanent Representation to the EU invited Ecommerce Europe for a meeting on 26 October. During the meeting, the upcoming Presidency first presented their digital priorities, which are very much aligned with those of President Ursula von der Leyen’s Commission, aimed at a digital recovery on the basis of safe, trustworthy and ethical technology. Furthermore, the Presidency intends to reshape Europe as a start-up continent. In terms of concrete policy work, the focus will be on the Digital Services Act (DSA) and Digital Markets Act (DMA), ePrivacy (which they intend to finalise during their term), technical infrastructures (5G, data, roaming, cybersecurity), eIDAS and Artificial Intelligence (expected during the first half of the Presidency). Ecommerce Europe presented its position paper on the Digital Services Act and discussed the preferred outcome of the negotiations on the ePrivacy Regulation. For further questions, please contact Maike Jansen (maikejansen@ecommerce-europe.
Upcoming Portuguese Presidency of the Council of the EU argues against one-size-fits-all rules for platforms in DSA
On 23 October, Ricardo Castanheira, Digital Counsellor at Portugal’s Permanent Representation to the EU, stated at a webinar on the Digital Services Act (DSA), that a common set of requirements, including transparency, should apply to all platforms but specific sets of rules should only be applicable to the largest players. He added that enforcement remained one of the main issues concerning the DSA and shared that there was still no consensus on whether the EU should create a new centralised authority or reinforce the cooperation between Member States. Portugal will take over the six-month Presidency of the Council of the EU from Germany on 1 January 2021.
France announces reinstatement of Digital Tax after OECD agreement delay
On 14 October, following a Meeting of G20 Finance Ministers, French Finance Minister Bruno Le Maire stated that France will begin collecting tax on big digital companies in December 2020. The decision comes after the OECD postponed the decision on a global digital tax for mid-2021, as negotiations failed to reach an agreement. The reintroduction of the levy, previously postponed to allow for the OECD negotiations to make progress, could lead to the U.S. administration retaliating with tariffs on French products. Asked about France’s digital tax, European Commission’s Executive Vice-President Valdis Dombrovskis recently stated that the EU would not accept third countries interfering with the taxation rights of EU Member States, as taxation is a sovereign right. He additionally stated that the Commission remained ready to propose an EU-wide digital tax, in case no global agreement is reached at OECD level. In light of these developments, Spain is also proceeding with the implementation of a national digital tax of 3%, according to a draft budget it submitted to the Commission. The proposal has already received the Spanish Parliament’s approval.
France and the Netherlands call for rules and case-by-case remedies for gatekeeper platforms
On 15 October, France and the Netherlands published a joint paper, calling for a list of dos and don’ts as well as case-by-case remedies for gatekeeper platforms. Its creation was prompted by the Commission’s plan to publish a Digital Markets Act, which would combine the ex ante rules for gatekeeper platforms and the so-called New Competition Tool, and is expected on 2 December. The paper argues that pre-emptive action should intervene prior to the stage where damage becomes irreversible and claims that intervention is justified when the asymmetric bargaining power of structuring platforms leads to negative consequences. France and the Netherlands suggest “a number of simple and objective criteria” both quantitative and qualitative to define the scope of the future rules, such as the number of users, business contracts, market share and turnover. They argue the list of banned behaviour and obligations for gatekeepers could include an extension of the right to data portability for business users; rules regarding fair contracts; rules prohibiting “disruptive self-preferencing,” and rules prohibiting halting access for third party providers of services or goods without justification. Case-by-case remedies, including obligations to proactively offer alternatives to users, interoperability and data sharing obligations, could be imposed after an investigation by a regulatory authority.
EP Plenary to vote on DSA Reports
On 20 October, the European Parliament’s Plenary will vote on its three own-initiative reports, concerning commercial and civil law rules for commercial entities operating online, improving the functioning of the Single Market, and fundamental rights issues. The European People’s Party Group (EPP) has already tabled an amendment to EP IMCO Committee’s Report on commercial and civil law rules, insisting on adding a mention to the ‘European way of life’. Amendments were also tabled by the Identity and Democracy Group (ID) and by the Confederal Group of the European United Left/Nordic Green Left (GUE/NGL). The EP Plenary will debate the three reports today, starting at 17:00. You can follow the debate live from here.
Commission’s Digital Markets Act to apply to a dozen of gatekeeper platforms
The European Commission is preparing a new Digital Markets Act, which would combine the ex ante
Commission plans to merge New Competition Tool and ex ante rules for gatekeepers
On 12 October, an EU official stated that the European Commission plans to merge the Digital Services Act (DSA)’s ex ante rules for gatekeepers platforms with the New Competition Tool (NCT) into a single proposal titled the Digital Markets Act. The NCT, originally a market investigation tool meant to apply to all sectors including financial services and agriculture, will now be targeted mainly at tech companies. On 8 October, Executive Vice-President Vestager mentioned during her speech at the Fordham Competition Conference that the Commission was currently working on a new legislative proposal focused on digital markets, which would feature two complementary pillars, a combination of ex ante regulation and case-by-case enforcement. It is still unclear how the Commission will proceed with the merge of DSA’s ex ante rules and the NCT and whether the new Digital Markets Act will also be presented on 2 December together with the DSA.
European Parliament’s Digital Services Act Initiative Reports available
The European Parliament (EP) has made available the final versions of its three reports on the upcoming Digital Services Act:
- EP’s JURI Committee ‘Digital Services Act: adapting commercial and civil law rules for commercial entities operating online’;
- EP’s IMCO Committee ‘Digital Services Act: Improving the functioning of the Single Market’;
- EP’s LIBE Committee ‘Digital Services Act and fundamental rights issues posed’.
All three reports have already been adopted in their respective committees and will be put to a plenary vote on 19 October. They will feed into the Commission’s proposal for a Digital Services Act, which is expected to be published on 2 December 2020.
OECD publishes updated blueprints for global digital tax proposal
On 12 October, Pascal Saint-Amans, head of tax policy at the Organisation for Economic Co-operation and Development (OECD), announced that an agreement on the establishment of a global digital tax would be postponed until mid-2021. The original deadline for the end of negotiations between 137 countries was the end of 2020. Because of major political differences, particularly on which companies should be included in the new regime and whether the rules would be mandatory, as well as the effect of the COVID-19 pandemic, negotiators will require more time to reach an agreement. As part of its announcement today, the OECD also published updated proposals for the two areas of its digital tax plan: Pillar 1 and Pillar 2. The first pillar aims to ensure big digital and multinational companies are taxed in the places where they generate profit, not where they book them. The OECD suggests targeting consumer-facing firms with a significant footprint around the globe, notably revenues of at least €750 million, and whose sales in each country reach a specific revenue threshold. It has been the more contentious OECD approach, with strong disagreements between the United States and several EU countries. The OECD’s second pillar sets a global minimum corporate tax rate to stop countries lowering corporate tax rates in an attempt to shift company headquarters to their jurisdictions. The second pillar has proven less controversial and discussions focus mainly on what that rate should be and whether there would be any exceptions. Mr. Saint-Amans stated that while much of the details of these proposals have been already agreed upon, there was still need for difficult political choices, including the idea of ‘safe harbor’ making the entire digital tax agreement optional, for which the United States has been negotiating.
The OECD will present the two blueprints at the meeting of G20 finance ministers on 14 October, for which a report is already available. Furthermore, today a public consultation was launched on the reports of the two blueprints, inviting stakeholders to send their written comments to the OECD by 14 December. Public consultation meetings on the blueprints will be held in January 2021, for which the OECD will publish registration details in December 2020.
ECJ ruling on data retention endangers EU-UK data exchange
On 6 October, the European Court of Justice ruled that national data retention rules go against fundamental rights and could only be considered in face of serious security risks. National governments, backed by the European Commission, have argued that the question of data retention should not be covered by EU law because of its national security implications. However, the Court argues that Member States could not pass laws restricting the scope of EU privacy rules, especially around the confidentiality of communications data, suggesting reform for EU data retention rules. The ruling could have serious implications for the exchange of data between the EU and the United Kingdom from 1 January 2021, as the Court found the U.K.’s bulk data collection regime illegal under EU law. To keep data flows active, the U.K. will have to receive the European Commission’s approval in the form of an ‘adequacy decision’. However, given the court’s ruling that the U.K.’s Investigatory Powers Act violates fundamental rights to privacy, data protection and freedom of expression, the EU will find it difficult to approve U.K. data protection standards without reform of the act.
Commission to release Regulation on Data Governance a week later
According to the European Commission’s latest agenda, the upcoming Regulation on Data Governance will likely be released on 20 October 2020, 6 days later than previously announced. The Regulation is part of the Commission’s Data Strategy, which will also include a Data Act, aimed at establishing rules for data sharing, planned for 2021. As part of the Commission’s data strategy, the governance framework will set up nine “data spaces,” which will allow the sharing of data between market players in various sectors. The governance framework will also introduce rules on interoperability and so-called data altruism, which will allow users to donate their data for the public goo
Leaked Impact Assessments on the Digital Services Act and ex ante framework
On 1 October, Ecommerce Europe acquired two staff working documents from the European Commission for the Impact Assessments on the Digital Services Act (DSA) and on Ex ante rules for gatekeeper platforms. The DSA Impact Assessment concerns an intervention for deepening the single market for digital services and establishing clear responsibilities for online platforms to protect their users. It describes three policy options:
- Core set of due diligence and transparency obligations to mitigate risks posed by online platforms, horizontally applicable to all services and harmonised across Member States. Enhanced supervision by national authorities.
- Wider set of due diligence and transparency obligations and incentives for further measures by online platforms, and applicable also to services established outside the Union but with a significant user-base in the EU. Enhanced supervision by national authorities and better cooperation for cross-border issues.
- Asymmetric measures with enhanced obligations for very large platforms and a revised liability regime for all services in the internet stack. Flexible and agile framework for addressing new, emerging risks. EU level governance and supervision.
In the consequent analysis of the impact of the three options, the Commission argues that the third, option would be most beneficial. Furthermore, the Commission also mentions removing disincentives for platforms to take action, possibly implying that the future legislation will likely include a Good Samaritan principle.
Regarding the Impact Assessment on an ex ante framework for the economic behaviour of large, ‘gatekeeper’ platforms, the document defines gatekeepers as intermediary services that are de facto unavoidable for business users in the digital economy seeking to access their markets in the European Union. The term is closely related to the notions of “companies with strategic market status” and is not necessarily linked to the traditional market dominance concept, as many gatekeepers typically operate across multiple markets simultaneously. The Impact Assessment presents combinations of blacklist, whitelist and greylist practices for gatekeeper platforms in 4 key services: online intermediation services, online search engines, operating systems, and cloud services. However, this working document does not present a preferred policy option, stating that such would be identified after alignment between the Commission’s DG GROW, DG COMP and DG CNECT.
Leaked draft list from the Commission on black and grey practices
On 30 September, Ecommerce Europe acquired a document outlining a draft blacklist of banned practices and a whitelist of obligations for gatekeeper platforms, which the European Commission would be considering addressing in the context of the upcoming proposal for an ex ante instrument regulating practices of “large online gatekeeper platforms”. The proposal is expected to be presented in the context of the Digital Services Act (DSA) package in early December. The lists of banned practices and obligations will most likely apply to gatekeeper companies offering “online intermediation services”, including marketplaces, app stores and social networks, as well as online search engines; operating systems and cloud services. The list is quite extensive and focuses on practices in relation to data, self-preferencing, and bundling and tying, such as:
- A prohibition of exclusive use of data, unless ensuring non-differentiated sharing;
- A ban of preferential display/ranking;
- A ban on exclusive pre-installation;
- Not requiring users to sign up/register with an email service of the platform when using another of its products;
- Audit of gatekeeper services and general compliance measures (reporting, provision of information to regulatory authorities), including a notification of planned mergers, acquisitions, partnerships and new activities.
The Commission also includes a “greylist” that would apply for unfair practices where intervention by the competent regulator is required. It includes a ban to restrict the use of business users’ data, a ban to propose different prices for similar services if one of them is operated by the gatekeeper, and obligations to share click-and-query data.
The document contains notes reflecting DG COMP’s involvement in the process and is not dated, but includes a footnote referring to comments from 18 September, hinting it was written after that date.
EP’s JURI Committee adopts Digital Services Act report
On 1 October, the European Parliament’s JURI Committee adopted its own initiative report on the Digital Services Act (DSA) with 22 votes for, 1 against, and 1 abstention. The JURI Committee’s final report asks the Commission to review the civil and commercial law rules applicable to commercial entities operating online and to present a regulation establishing contractual rights as regards to content management. The report focuses on user control, opt-outs for targeted advertising and content curation. On 28 September, the European Parliament’s IMCO Committee adopted the final version of its DSA report with 86% majority. The final version of the IMCO’s Report requires that the Commission reinforces the liability regime for online marketplaces and adds more obligations including more information to consumers and enhanced verification of their sellers’ identity. The report also touches upon artificial intelligence, ex ante rules for gate-keeper platforms and online advertising. The third EP Committee with an own initiative report on the DSA, the LIBE Committee, already adopted the final version of its report on 22 September. The EP’s Plenary is expected to vote on the three reports between 19 and 22 October.
Commission launches public consultation on the revision of packaging rules
On On 30 September, the European Commission launched a public consultation on “Reducing packaging waste – review of rules”. The consultation seeks to gather input on a review of the Directive on Packaging and Packaging Waste, which regulates the placing on the market of packaging as well as packaging waste prevention and management in the EU. The consultation is divided into two parts: the first part addressed to the general public and the second seeks the input of experts, business associations and businesses, as well as local, regional and national public authorities. The first part of the consultation inquires about EU consumers’ views and personal experiences regarding packaging. The second section focuses on the following topics:
- Increase of level playing field and harmonization of requirements for products placed in the Single Market;
- Reduction of packaging waste;
- Promotion of the use of reusable packaging;
- Increased recyclability of packaging;
- Clear definitions and harmonized labels.
Furthermore, the consultation proposes sets of possible policy measures aimed at the abovementioned issues. The deadline for contributions to the public consultation is 6 January 2021.
EP’s JURI and IMCO Committees vote on Digital Services Act reports
On 28 September, the European Parliament’s IMCO and JURI Committees voted on their respective own initiative reports on the Digital Services Act (DSA). The IMCO Committee adopted the final version of its report with 86% majority, and the JURI Committee agreed on compromise amendments today and will hold its final committee vote on Thursday, 1 October. The final version of the IMCO’s Report requires that the Commission reinforces the liability regime for online marketplaces and adds more obligations including more information to consumers and enhanced verification of their sellers’ identity. The report also touches upon artificial intelligence, ex ante rules for gate-keeper platforms and online advertising. JURI Committee’s final report asks the Commission to review the civil and commercial law rules applicable to commercial entities operating online and to present a regulation establishing contractual rights as regards to content management. The report focuses on user control, opt-outs for targeted advertising and content curation. The third EP Committee with an own initiative report on the DSA, the IMCO Committee, already adopted the final version of its report on 22 September.
Update on e-Privacy
The German Presidency of the Council has prepared a compromise text of the e-Privacy Regulation proposal, according to a leaked document. The text was supposed to be discussed on 15 September, but the discussion still has not taken place, allegedly due to disagreement between Germany’s Economy and Justice ministries. With the start of its mandate, the German Presidency had prepared a discussion paper asking for input on the rules for the processing of electronic communications data in Articles 6 to 6d and for the protection of end users’ terminal equipment information in Article 8 of the draft e-Privacy Regulation. The paper offered two policy options: the first was following the lead of the more business friendly Croatian Presidency proposal, and the second was closer to the Finnish Presidency proposal. Portugal, Italy, Finland, Greece, France, the Czech Republic, Poland and the Netherlands, among others, have signaled their preference for the German Presidency’s option 2 for statistical counting and legitimate interest in Article 6. On Article 8, a vast majority of national delegations including France, Italy, Spain, Portugal, Denmark and the Netherlands also said they preferred option 2. The German Presidency aims to have a General Approach of the Council by December 2020, after three years of Council negotiations. Only after that, trialogue negotiations will be able to start.
Commission publishes Customs Union Action Plan
On 28 September, the European Commission launched a new Customs Union Action Plan setting out a series of measures to make EU customs smarter, more innovative and more efficient. The Action Plan includes a number of initiatives in areas such as risk management, managing e-commerce, the promotion of compliance and customs authorities acting as one. In terms of risk management, the Action Plan focuses in particular on ensuring greater availability and use of data and data analysis for customs purposes. It calls for intelligent, risk-based supervision of supply chains and for establishing a new analytics hub within the Commission for collecting, analysing and sharing customs data. Regarding e-commerce, the Plan strengthens obligations on payment service providers and online sales platforms to help fight customs duty and tax fraud in e-commerce. Furthermore, the Plan promotes compliance through the upcoming ‘Single Window' initiative, which will make it easier for legitimate businesses to complete their border formalities in one single portal and allow for more collaborative processing, sharing and exchange of information. Finally, the Action Plan details the roll-out of modern and reliable customs equipment under the next EU budget. A new reflection group formed of Member States and business representatives will be set up to help prepare for future crises and challenges such as unanticipated global developments and future business models.
Sweden publishes position paper on the Digital Services Act
On 14 September, the Swedish government published a position paper on the upcoming Digital Services Act (DSA) calling for a focus on illegal content and dangerous and counterfeit goods. The document urges the Commission to focus on illegal as opposed to harmful content, as the coverage of legal yet harmful content is still being openly discussed. Furthermore, Sweden wants the DSA to harmonize notice and action procedures, introduce a Good Samaritan principle and require platforms to verify the identity of their business customers. The paper argues that the DSA should also preserve the main principles of the e-Commerce Directive, although they should be further developed and clarified. For example, this should apply for the principle on mere conduit as well the prohibition on Member States imposing general obligations on providers to monitor their services. Finally, the Swedish government welcomes the Commission’s plan to draft ex ante rules but warns they should be coherent with the review of EU competition law and the Platform-to-Business (P2B) Regulation.
Commission reacts to platforms’ agreement with advertisers
On 23 September, Facebook, YouTube and Twitter, in collaboration with marketers and agencies through the Global Alliance for Responsible Media have agreed to adopt a common set of definitions for hate speech and other harmful content and to collaborate with a view to monitoring industry efforts to improve in this critical area. As the European Commission is currently drafting the Digital Services Act (DSA), which will deal with content moderation online, a Commission spokesperson has stated that while self-regulatory agreements as the one in question are potentially useful, it is important to bring on the table the interest and fundamental rights of users, and not leave the solutions be driven solely by economic interests. There is currently no EU-wide definition of hate speech and whether the DSA will define harmful content remains unclear. In June, the Commission stated that instead of harmonising definitions throughout the bloc, the DSA could instead harmonise procedures for dealing with them. More and more voices in the Parliament and the Commission are now saying that dealing with reach is more relevant than requiring material deletions.
EP’s JURI Committee reaches preliminary agreement on Digital Services Act draft report
Political groups in the European Parliament’s Legal Affairs Committee (JURI) have reached a compromise on MEP Tiemo Wölken’s (S&D, Germany) initiative draft report ‘Digital Services Act: adapting commercial and civil law rules for commercial entities operating online’. MEP Wölken’s text revolves around three pillars: the protection of fundamental rights such as freedom of speech, a new approach to dealing with disinformation, and privacy. He argues that illegal and legal yet harmful content, such as disinformation, should be dealt with differently, stating that there should be clear procedural standards of how platforms should deal with notified illegal content. Furthermore, the draft report proposes an independent dispute settlement body that would be supported by a fund financed by the largest platforms. A separate agency working at EU-level would be in charge of enforcement, including via the auditing of algorithms. Yet, MEP Wölken argues that the DSA should not impose new obligations to use content filtering technologies or any kind of ex ante control, and calls for tackling the ad-based model of social media platforms instead. The agreement of political coordinators on the draft report paves the way for its adoption after a committee vote scheduled for 28 September, when the IMCO Committee will also vote on its draft initiative report on the Digital Services Act (DSA). Furthermore, the Commission has announced that the Digital Services Act package will likely be published on 2 December 2020 (target date).
Commission launches new roadmap on sustainable products
On 14 September, the European Commission launched a new roadmap titled ‘Sustainable products initiative’, which will revise the Ecodesign Directive and propose additional legislative measures as appropriate. Currently, the Directive only covers energy-related products and the planned revision aims to widen its scope to cover a wider range of products including electronics and tech. The Commission is also considering establishing minimal requirements on mandatory sustainability labelling, improving information sharing in the form of a digital product passport and measures on production processes, for example to facilitate recycled content. Furthermore, the Commission is considering measures to ban the destruction of unsold durable goods, as well as rules to make producers responsible for marketing more circular products and providing better repair services. The initiative aims to make products placed on the EU market more sustainable and will also address digital product information and the presence of harmful chemicals in products such as electronics & ICT equipment, textiles, furniture, steel and cements. The deadline for providing input to the roadmap is 2 November 2020 and the Commission proposal is expected by the end of 2021.
The Netherlands publishes a non-paper on the upcoming Digital Services Act
On 14 September, the Netherlands published a non-paper on the revision of the e-Commerce Directive and the introduction of the Digital Services Act, which calls for the DSA to distinguish between hosting services and services whose business model is linked to the consumption of information that users deliberately upload, such as social media platforms. According to the Dutch government, the Commission should not revise the e-Commerce Directive’s (ECD) articles 12 and 13, which guarantee that communications networks are not liable for illegal content. However, article 14 should be amended to clarify the roles and responsibilities of platforms such as social media, who benefit from the ECD’s limited liability regime while being “widely misused for sharing or disseminating illegal or unlawful information or carrying out unlawful or illegal activities.” The non-paper argues that the revision of the Directive should maintain some of the legislation’s principles, such as the protection of fundamental rights, consumers, and businesses, and avoid additional administrative burdens. Regarding the country of origin principle, the Dutch government calls for the DSA to ensure a good balance between economic freedoms and public interests.
Commission’s upcoming strategy for payments introduces instant payment system and digital euro
According to a leaked version of the European Commission’s Retail Payments Strategy, expected to be published by the end of September, the Commission plans to introduce instant payment systems and a digital euro to prevent foreign digital companies from taking over the EU market. The 26-page document states that the Commission will continue to play an active political role to foster the development of pan-European payment solutions that rely extensively on instant payments, proposing the development of a single, open and secure European standard for QR-codes on mobile phones. The target set for the implementation of instant payment in the EU is the end of 2021. Given the upcoming launch of Facebook’s Libra digital currency this fall and the pressure form the European Central Bank (ECB) for the Commission to mandate a shift to systems for instantaneous bank transfers and purchases, the draft strategy argues that “Big Tech firms can use their customer data and network effect advantages to enter the payments sector, leveraging their market power from social media or search services”. The Commission also proposes to work with the ECB on developing a digital euro, which central bankers have discussed as a response to the emergence of virtual currencies such as Libra. A digital euro could strengthen the Commission’s effort to challenge the U.S. dollar’s dominance on world markets and protect Europe from protectionist policies and foreign sanctions. Still, the communication says further work is needed, especially when it comes to assessing the possible impacts that a digital currency could have on monetary policy and financial stability.
Commission launches public consultation on carbon border adjustment mechanism
On 22 July, the European Commission launched an public consultation on the new carbon border adjustment mechanism, part of the Green Deal. A Carbon Border Adjustment Mechanism (CBAM) would ensure that the price of imports reflects more accurately their carbon content. This measure will be designed to comply with World Trade Organization rules and other international obligations of the EU. It would be an alternative to the current free allocation of allowances or compensation for the increase in electricity costs that address the risk of carbon leakage, because of carbon pricing in the EU’s Emissions Trading System (ETS). The public consultation aims to gather citizens’ opinion on policy options and their possible impacts and to identify opportunities and challenges in relation to the future Carbon Border Adjustment Mechanism. The deadline for providing input for the consultation is 28 October and the Commission’s proposal is expected in the second quarter of 2021.
Ecommerce Europe provides feedback to the Commission’s Digital Services Act consultation
On 8 September, the European Commission closed its 3-month public consultation on the Digital Services Act (DSA). The consultation sought input on topics such as keeping users safe online, upgrading the liability regime of digital intermediaries, issues deriving form platforms’ gatekeeper powers, transparency in online advertising, as well as provisions for platform workers. The results will feed into the Commission’s upcoming Digital Services Act, which will likely include a revision of the e-Commerce Directive (ECD), introduction of ex ante rules for ‘gatekeeper’ platforms and potential
Ecommerce Europe provides feedback to the Commission’s consultation on Product Safety
On 9 September, the European Commission closed its consultation on the review of the General Product Safety Directive (GPSD). The consultation (which was prepared by a consultancy firm) aimed to gather input on issues related to new technologies and online sales, better enforcement of the rules and more efficient and even market surveillance, simplification the standardization process, and improving the recall of dangerous products in the hands of consumers. The feedback gathered will be used for a possible future revision of the Directive. Ecommerce Europe provided input for the consultation, stating that the current EU legal framework for product safety is overall fit for purpose as it is principle based, which makes it easy to apply these principles by way of interpretation to new technologies. However, Ecommerce Europe argues that the GPSD framework could be improved by ensuring a more harmonized and uniform interpretation of its rules across the EU, by increasing the funding and capabilities of Member States’ enforcement authorities, and eventually by promoting intergovernmental cooperation to act against non-compliant players based outside the EU. For further information on Ecommerce Europe’s position, please contact Maike Jansen (maikejansen@ecommerce-europe.
MEP Saliba drafts a new version of DSA initiative report
On 9 September, Member of European Parliament (MEP) Alex Agius Saliba (S&D, Malta) presented a new version of the Internal Market and Consumer Protection (IMCO) Committee’s draft report on Digital Services Act: Improving the functioning of the Single Market, of which he is the rapporteur. The text reflects amendments suggested by the consulting committees on the file and proposes limited changes. It states that the DSA should not affect the General Data Protection Regulation’s (GDPR) data minimization principle and should allow users to “opt-out, limit or personalize” the use of automated personalization features, including for ranking and content curation. After a final discussion between the negotiators for the S&D and shadow rapporteurs on 10 September, the IMCO Committee is close to finalizing the text of the report. The Committee vote will be held on 28 September and the Plenary vote is scheduled for October.
EP’s TRAN Committee adopts Opinion on Digital Services Act
On 2 September, European Parliament’s TRAN Committee adopted its Opinion to the IMCO Committee’s draft report on ‘Digital Services Act: Improving the functioning of the Single Market’. The opinion calls on the Commission to clarify the liability of transport and tourism platforms, taking into account their specific business model. It invites the Commission to set a uniform obligation for transport and tourism platforms to verify the identity of the service providers and to request from service providers the permits, licenses and certificates attesting the legality and safety of the service offered. Furthermore, it draws attention to the very specific nature of content on transport and tourism platforms compared to other sectors, which in some instances is required to be compliant with precise criteria set at national level and calls for a sector-specific EU-coordinated effort involving all stakeholders to agree on such criteria. The TRAN Committee calls on the Commission to enhance the relationship between stakeholders and local authorities in the Short-Term Rental market and mobility services and stresses the need to promote data exchanges, digitisation and big data on transport and logistics platforms in the interests of greater efficiency. Finally, the opinion highlights the need for online platforms in Transport and Tourism to promote sustainability through their services in line with the European Green Deal and calls on the Commission to set up an EU Platform for the exchange of data and information between all stakeholders in the tourism sector to facilitate the sharing of best practices and promoting sustainability in the recovery phase. The IMCO Committee vote on the draft report will take place on 28 September, followed by a Plenary vote in October.
EP’s JURI Committee adopts draft opinion on the Digital Services Act
On 2 September, European Parliament’s JURI Committee adopted its draft opinion on Digital Services Act: Improving the functioning of the Single Market with 20 votes in favor, 1 against, and 3 abstentions. Prior to the vote the rapporteur Patrick Breyer (Greens/EFA, Germany) stated that the opinion addressed major challenges of the digital age to put an end to surveillance capitalism and stressed that unlawful content needed to be treated in line with the rule of law and following an assessment of the content, which filtering algorithms were unable to do. The opinion will feed into EP’s IMCO Committee’s draft report on Digital Services Act: Improving the functioning of the Single Market, for which the IMCO Committee will hold a vote on 28 September. Prior to the Committee vote, the draft report will be discussed in the EP Plenary on 14 September, followed by a final Plenary vote on 19 October.
EP’s IMCO Committee discusses Communications on the Digital Strategy for Europe
On 3 September, European Parliament’s IMCO Committee discussed the Digital Strategy for Europe with representatives of the European Commission. Manuel Peix Castiella (DG CONNECT) presented an overview of the developments regarding the Digital Strategy, referring to the proposal for a Digital Education Action Plan, the reinforced Digital Skills Agenda and an initiative to improve labor conditions for platform workers, aimed to address the digital skills and gig economy part of the Strategy. Furthermore, the Commission adopted a Working Paper on AI to address EU values and proposed a revised EuroHPC regulation on supercomputing, and aimed at deploying joint capacities in AI, cyber, super and quantum computing. In terms of the Strategy’s second pillar on a fair and competitive economy, the Commission had adopted strategies on Industrial Policy and SMEs, and is considering the inclusion of ex-ante rules in the upcoming Digital Services Act. Regarding the third pillar on a open, democratic and sustainable society, the Commission proposed new revised rules to increase and harmonize online platforms’ and information services providers’ responsibilities and a revision of the eIDs regulation as well as the Circular electronics initiative. He added that the Multiannual Financial Framework (MFF) would include InvestEU, Digital Europe, Connecting Europe Facility, the EU 5G deployment support program, Horizon Europe, developing programs in health, industry and space, climate, energy and mobility, and the European Innovation Council.
EP’s IMCO Committee holds exchange on AI with Commission
On 3 September, European Parliament’s IMCO Committee discussed developments concerning the White Paper on Artificial Intelligence with Commission officials. Kilian Gross (DG CONNECT) presented the Commission’s work regarding AI. He announced that a first analysis of the public consultation on the White Paper for AI was available and that the Commission was currently organizing workshops as well as an European AI Alliance Assembly, scheduled for 9 October 2020. Regarding high-risk AI systems, identified in the AI White Paper, he stated that the Commission would introduce an external conformity assessment for products and strict requirements on training data, information, record keeping, robustness and accuracy, human oversight and biometric identification. He elaborated that such systems would be checked ex-ante with post-ante monitoring and market surveillance mechanisms. Additionally, the Commission has proposed a voluntary labeling system for low-risk AI systems. Mr. Gross concluded that the industry sector was hesitant on the need for a new legislation and seemed to prefer to fill the gaps in current legislation and that the main risk identified concerned fundamental rights and discrimination. He stated that the Commission would prepare an impact assessment before tabling the legal proposal, taking into account Parliament’s opinion.
European Commission ready to launch Digital Tax next summer
On 4 September, during a meeting with national tax officials in the High Level Working Party on Tax Questions, the European Commission presented their plans to launch a new digital tax in the summer of 2021. The tax is meant to feed into the EU budget necessary for the recovery plans. It is not clear how the negotiations at OECD level will impact the EU digital tax, as some say that the tax will come regardless of the progress at OECD level, while the Commission officially states it will only come forward with a new tax proposal if OECD negotiations fail. OECD negotiations for a global digital tax still have several political obstacles to overcome, according to two leaked blueprints on pillar one and pillar two. The documents, which are still subject to change, highlight which aspects of the blueprints still require a political decision. For pillar one, the OECD highlights leaders need to decide on the scope of the tax, the amount of profits to be reallocated as well as the extent of tax certainty. The U.S. has strongly opposed pillar one, arguing that it discriminates against US companies. Last June, the U.S. announced it wanted to pause negotiations. Consequently, France, the UK, Spain and Italy suggested a “phased approach” to the digital tax talks. Some other countries (i.e. Austria) decided to proceed anyway. There will be a meeting with G20 finance ministers on 15-16 October. The OECD’s plan is to have a global tax deal by the G20 summit in Saudi Arabia in November.
Commission published roadmap and public consultation on European Digital Identity
On 23 and 24 July, the European Commission launched respectively an Inception Impact Assessment (roadmap) and a public consultation on European Digital Identity (EUid). The two initiatives are being undertaken in the context of the revision of the eIDAS Regulation, which is expected to be presented as part of the Digital Services Act by the end of the year. The eIDAS Regulation, adopted in 2014, introduced the first cross-border framework for trusted digital identities and the so-called trust services such as electronic signatures that can be used to sign documents in the online world. It is meant to ensure secure and seamless electronic interaction between citizens, businesses and public authorities.
The main focus of the Commission’s initiative is to assess the extent to which the eIDAS framework remains fit for purpose and whether it is appropriate to modify the scope of the Regulation or its specific provisions, taking into account the experience gained in the application, as well as technological, market and legal developments. The Commission will consider revising the eIDAS Regulation to improve its effectiveness, extend its benefits to the private sector and promote trusted digital identities for all Europeans. The aim of the public consultation is to collect feedback on drivers and barriers to the development and uptake of eID and trust services in Europe and on the impacts of the options for delivering an EU digital identity. It targets the broad public (e.g. citizens and end-users, including older persons and persons with disabilities) as well as companies directly impacted by the eIDAS Regulation (e.g. trust service providers, identity providers), competent authorities in the Member States, international organizations and concerned stakeholders.
The deadline for contributions to the roadmap is 27 August and the deadline for the public consultation is 2 October.
Commission publishes Summary report of the public consultation on the European strategy for data
On 24 July, the European Commission published a summary report of the public consultation on the European Strategy for Data, which was open for contribution from February to May and to which Ecommerce Europe contributed. The summary report takes stock of the contributions and presents preliminary trends that emerge from them, focusing on quantitative aspects. Almost all respondents (97.2%) confirmed the need for an overarching data strategy to enable the digital transformation of society, and 91.5% agreed that ‘More data should be available for the common good, for example for improving mobility, delivering personalised medicine, reducing energy consumption and making our society greener.’ Regarding data governance, there is a general consensus (91% of the 554 respondents to the question) that standardisation is necessary to improve interoperability and ultimately data re-use across sectors. 82.2% of respondents considered that the establishment of a list of high-value datasets, to be made available free of charge, without restrictions and via application program interfaces (APIs), is a good way to ensure that public sector data has a positive impact on the EU’s economy and society. This online consultation is part of a broader stakeholder consultation process that will contribute to the preparation of several data initiatives. These include a legislative framework on the common European data spaces, expected in 2020, and an implementing act on a list of high-value datasets, expected in 2021.
Commission launches roadmap on Requirements for Artificial Intelligence
On 23 July, the European Commission launched an Inception Impact Assessment (roadmap) on Requirements for Artificial Intelligence. While Artificial Intelligence (AI) is a strategic technology with tremendous opportunities, some of its uses pose specific significant risks relating to the application of various EU rules designed to protect fundamental rights, to ensure safety and to attribute liability. With this initiative, the Commission aims to ensure that AI is developed and used in an appropriate legal framework with the overall goal to stimulate the up-take of trustworthy AI in the Single Market. The deadline for contributions is 10 September and the Commission is planning to release a public consultation on the topic in the near future.
Commission’s Joint Research Center publishes report on Artificial Intelligence and Digital Transformation
On 22 July, the European Commission’s Joint Research Center published a report on ‘Artificial Intelligence and Digital Transformation: early lessons from the COVID-19 crisis.’ The report analyses the increasing use of AI in medicine and healthcare, the tensions in data sharing between individual rights and collective wellbeing, the search for technological solutions like contact tracing apps to help monitor the spread of the virus, and the potential concerns they raise. The report concludes that the COVID-19 crisis has acted as a boost for AI adoption and data sharing, and created new opportunities. It has also amplified concerns for democracy and social inequality and showed Europe’s vulnerability on data and platforms, calling for action to address these crucial aspects.
Commission’s High-Level Expert Group on Artificial Intelligence publishes Sectoral recommendations
On 23 July, the European Commission’s High-Level Expert Group on Artificial Intelligence (AI HLEG) published its Sectoral considerations on the policy and investment recommendations for trustworthy AI. The document is non-binding and lists specific requirements for the manufacturing and Internet of Things sector, public sector (justice and law-enforcement) and healthcare sector. The report makes recommendations on how governments and the tech industry should cooperate and use AI in a trustworthy way. It also emphasises the importance to build an environment where EU citizens are protected from potential harm or discrimination caused by AI. Additionally, the report identifies the lack of digital skills and literacy, data spaces and digital infrastructure as the main obstacles for future AI innovation. This is the second document published by the AI HLEG. Last week, they published a nonbinding Assessment List for Trustworthy AI, intended to be used as a tool by companies to develop and use AI in a trustworthy way. With the Assessment List and the Sectoral Considerations report published, the AI HLEG’s three-year mandate is now completed. Both documents will most probably feed into the Commission’s upcoming AI legislation, expected in Q1 2021.
Commission launches public consultation on the Postal Services Directive
On 13 July, the European Commission launched a public consultation on the evaluation of the Postal Services Directive (97/67/EC), postponed for 2021 by the Commission because of the COVID-19 pandemic. The purpose of the consultation is to collect stakeholders’ opinions on whether the Postal Services Directive, lastly revised in 2008, has achieved its objectives and remains relevant in the current context. It should complement the information provided by statistical data and studies, with recent evidence about the state of affairs and trends in the postal markets. The results of the public consultation will factor into the evaluation report that will assess, in the first place, whether the Directive still fits the purpose for which it was adopted in 1997 and, second, whether new policy objectives might need to be considered in the future. The deadline for contributions is 9 November 2020. Ecommerce Europe is still in the process of preparing a position paper on the directive, which will serve as a basis to reply to the consultation. The e-Logistics Working Group will be consulted accordingly.
Update on the VAT E-commerce Package deferral
On 24 June, Council’s COREPER (Member States' ambassadors to the EU) reached a preliminary agreement on the European Commission’s proposal to defer the implementation of the VAT E-commerce Package by 6 months from 1 January 2021 to 1 July 2021. This postponement will include:
- The launch of the VAT One-Stop-Shop;
- The abolition of the import VAT exemption for small consignments (up to €22) and the Import One-Stop-Shop VAT return;
- Rules on marketplaces as deemed suppliers related to VAT.
Following the decision of the Permanent Representatives Committee on 24 June 2020 to use the Council written procedure, Member States will have until 20 July to comment on the VAT E-commerce Package deferral, as announced by a Council Communication on 10 July. Member States will be able to answer with ‘Yes’, ‘No’ or ‘Abstention’ and could include unilateral statements in their responses. You may find more detailed information on the written procedure here (pp. 59-60).
Commission publishes Package for fair and simple taxation
On 15 July, the European Commission published an extensive Package for fair and simple taxation. The package consists of three main elements:
- Action Plan for fair and simple taxation supporting the recovery;
- Revision on the Directive on administrative cooperation (DAC 7);
- Communication on tax good governance in the EU and beyond.
The Action Plan consists of a Communication and an Annex, outlining a set of 25 actions that the Commission will bring forward between now and 2024 in the field of taxation. Here you can find Ecommerce Europe’s detailed summary outlining the most relevant aspects of the publications.
OECD and G20 publish status update on Digital Tax
On 18 July, G20 Finance Ministers and Central Bank Governors published a communication in which they state that they “remain committed to further progress on both pillars to overcome remaining differences” and that they reaffirm their “commitment to reach a global and consensus-based solution this year”. Before the next meeting in October, they set out to have a report on the blueprint for each pillar submitted. Earlier in July, the OECD also published a new report for the G20 Finance Ministers and the Central Bank Governors, in which they describe the progress on the tax agenda. The OECD will present a detailed blueprint of Pillar One in October, which could serve as the basis for both a public consultation and a final round of negotiation with a view to agreeing a consensus-based solution. The work on Pillar Two is also well advanced according to the OECD Secretary-General Angel Gurria. He explains that work is underway to finalize the technical design of Pillar Two, which will be submitted to the G20/OECD Inclusive Framework at its plenary meeting in October 2020.
European Parliament’s ECON Committee discusses digital taxation
On 13 July, European Parliament’s ECON Committee held an exchange of views on recent international developments in the area of digital taxation with representatives from the OECD and the European Commission. Pascal Saint-Amans, Director of OECD’s Centre for Tax Policy and Administration, stated that there were 137 countries involved in the negotiations for a consensus-based long-term solution which would consist of two pillars. The first pillar was about a new nexus and the second one about a unified approach that involved the revision of international taxation rules to allow the taxation of companies even if they are not physically present on the territory. He informed the EP that before October 2020 the OECD would present the technicalities for both pillars and confirmed United States’ temporary withdrawal from the negotiations due to the COVID-19 outbreak and their upcoming presidential elections. Furthermore, he stated that the US had also decided to take action against France over its digital services tax and introduce trade sanctions on several French products. Benjamin Angel from the European Commission’s Taxation DG stated that the taxation of the digital sector was a very strong political priority for the EU and expressed doubt that an agreement would be concluded before the US presidential elections. In case no international agreement is found, the Commission would table a proposal and was currently considering two options: one related to digital taxation and one on minimum taxation. However, an international agreement remained EU’s preferred option and Mr. Angel urged for keeping the two OECD pillars in the same package.
Commission will put forward a digital tax proposal in early 2021
According to the latest budget proposal from 10 July by Council President Charles Michel, the European Commission will present a proposal for the introduction of a EU-wide digital tax in the beginning of 2021. The tax is expected to bring €1.3 billion to the EU in terms of revenue in case the ongoing OECD negotiations fail to deliver an international agreement by the end of 2020. With the withdrawal of the United States from the negotiations, France has announced its intention to lift the suspension on imposing its national tax by the end of the year, which might be met with retaliation in terms of tariffs from the US side. The budget proposal will be discussed at the European Summit on 17 and 18 July in Brussels.
Commission publishes Q&A on Platform to Business Regulation
On 10 July, the European Commission published a Q&A on Establishing a Fair, Trusted and Innovation Driven Ecosystem in the Online Platform Economy. The document is aimed to provide practical guidance on the main provisions of the Platform to Business Regulation (P2B Regulation), which entered its application phase on 12 July. The document contains information in the form of detailed questions and answers which can be useful to: providers of online intermediation services and online search engines which may need to adapt their commercial practices in accordance with the P2B Regulation; business users or corporate website users; representative organisations or associations, or public bodies; and for the authorities in the Member States who are responsible for the enforcement of the P2B Regulation. However, the long-anticipated P2B Ranking Transparency Guidelines have not yet been published and are expected to be released in the next few weeks.
Commission launches public consultation on progress reports on the online platform economy
On 10 July, the European Commission launched a public consultation for three draft progress reports, published by the expert group to the EU Observatory on the Online Platform Economy: Measurement of the Online Platform Economy; Differentiated treatment; and Data in the Online Platform Economy. The three draft reports cover the major aspects of data access, differentiated treatment and methodological ideas relating to the question on how best to measure key aspects of the online platform economy. These preliminary reports point to imbalances in market power in the relationship between online platforms and their users in terms of both access to, and the use of data, as well as discrimination as a potential source of issues. The progress reports will feed into the Commission’s current work priorities in the digital area as announced in the Commission’s Communication on Shaping Europe’s Digital Future as well as in its Data Strategy. They will provide evidence for the upcoming initiative on the ex-ante regulation of platforms with significant network effects acting as gatekeepers as part of the Digital Services Act package. The deadline for providing feedback for the public consultation is 8 September and the final report is expected to be adopted by the end of 2020.
German Presidency starts work on proposals for the e-Privacy Regulation
On 6 July, the German Presidency distributed a discussion paper to national delegations asking for input on the rules for the processing of electronic communications data in Articles 6 to 6d and for the protection of end users’ terminal equipment information in Article 8 of the e-Privacy Regulation proposal. The Presidency has provided sets of options for each point of discussion, offering both the Croatian and Finnish proposals as solutions to Article 8 tackling the issue of appropriately balancing a high level of protection of end-users’ privacy with the legitimate interests of online publishers. Member States will be asked to give their options on the aforementioned articles during a Working Party on 13 July and will have until 24 July to submit written comments, with the new compromise text expected shortly after. The Presidency aims to close the file by December 2020, after three years of Council negotiations.
Coreper approves Collective Redress Agreement
On 30 June, Coreper formally endorsed the text on the Collective Redress Directive, on which the EU co-negotiators agreed in trialogue on 22 June. The text is based on the latest Council’s Coreper agreed text with some additions coming from the European Parliament’s resolution from end 2018. The directive requires member states to put in place a system of representative actions for the protection of consumers’ collective interests against infringements of Union law. It covers actions for both injunctions and redress measures. It empowers qualified entities, meaning organizations that can bring cases forward, designated by Member States to seek injunctions and/or redress, including compensation or replacement, on behalf of a group of consumers that has been harmed by a trader who has allegedly infringed one of the EU legal acts set out in the annex to the directive. During the trialogue negotiations, the designation of qualified entities was a red line for the Council. The directive will allow each country to name at least one qualified entity that will be allowed to bring cases forward, and the split between cross-border and domestic cases remains. The eligibility criteria for qualified entities in cross-border cases will be harmonized on a EU level, while for domestic actions a qualified entity will have to fulfill the criteria set out in the law of its Member State of designation (or those set out in the directive in case the Member State does not have such law in place). The political agreement still needs to be approved by the Parliament and Council. After the Directive enters into force, EU member states will have two years to transpose it into their national laws and six months to apply it. Ecommerce Europe has been coordinating actions with other EU trade associations on this file, including a recent push to improve the text.
Commission launches targeted consultation on cross-border parcel delivery
On 1 July, the European Commission launched a targeted consultation on cross-border parcel delivery, which will run until 30 September 2020. The targeted consultation is addressed to parcel delivery service providers, consumers and retailers, as well as their associations, and the social partners. The aim of the consultation is to gather respondents’ views on the application of Regulation (EU) 2018/644 on cross border parcel delivery services. The Regulation aims at enhancing regulatory oversight and transparency in the parcel delivery sector, in particular by enhancing transparency of public list tariffs for certain parcel delivery services and by providing for the assessment of certain cross-border parcel delivery tariffs. The feedback received from stakeholders will feed into a report on the application of the Regulation which will be published by the European Commission. The report will assess the Regulation’s contribution to the improvement of cross-border parcel delivery services and its impact on e-commerce.
Commission launches public consultation on a New Consumer Agenda
On 30 June, the European commission launched a public consultation on the upcoming New Consumer Agenda, which the European Commission intends to publish on 18 November 2020, according to a Commission official. Last week the Commission also published the Roadmap for the Agenda. The Commission will present a communication laying out a new vision on the role of consumers, gaps in effective enforcement of consumer rights and disparities between different national consumer policies. The text will cover issues addressed in three initiatives next year, namely the update of the Consumer Credit Directive; the improvement of information on sustainable products and the revision of the General Product Safety Directive. The open public consultation includes questions on overall consumer policy strategy, on empowering consumers for the green transition, and on the reviews of the Consumer Credit Directive and of the General Product Safety Directive. The deadline for contributions is 6 October 2020.
Commission to publish report on online platforms next week
The European Commission is planning to publish an expert report on potentially harmful practices within the online platform economy between 6 and 12 July, according to Commission officials. The report will include the findings of the Expert group of 15 academics, supporting the EU Observatory on the Online Platform Economy. The observatory and the expert group were set up to monitor the latest trends in the sector with the adoption of the Platform-to-Business (P2B) Regulation, which will enter into application as of 12 July. The topics the expert group was tasked with researching include algorithmic decision-making and ranking of search results, access to data, remuneration for online content, and preferential treatment for products offered by the platform. After a peer review and comment period, the findings of the expert report will be considered in the drafting of the Digital Services Act proposal, planned for Q4 2020. The Commission is also expected to publish guidelines on ranking and questions and answers linked to the P2B Regulation in the same timeframe as the expert report, 6 to 12 July.
Political agreement (trialogue) reached on the Collective Redress Directive
On 22 June, the EU co-negotiators agreed in trialogue on the text on the Collective Redress Directive. The final text is still not available yet and it will be published in the coming days after a formal vote in COREPER. From the information gathered so far, we know that the text is based on the latest Council’s COREPER agreed text with some additions coming from the European Parliament’s resolution from end 2018. The agreement means that the consumers will be able to file class-actions in various areas such as data protection, passenger rights, travel and tourism, environment, and many others, including retail. During the trialogue negotiations, a red line for the Council was the designation of so-called qualified entities, meaning organizations that can bring cases forward. The directive will allow each country to name at least one qualified entity that will be allowed to bring cases forward, and the split between cross-border and domestic cases remains. The criteria for qualified entities in cross-border cases will be harmonized, but countries will have more freedom when it comes to domestic cases. Ecommerce Europe has been coordinating actions with other EU trade associations on this file, including a recent push to improve the text. After the joint business statement, we can notice a positive evolution. In particular:
- The new tool is only usable by qualified entities, and not given to any citizen like in the United States. This is an important filter.
- There are important safeguards still included such as the loser pays principle and rules around third party funding (which few countries worldwide possess).
The political agreement still needs to be approved by the Parliament and Council. After the Directive enters into force, EU member states will have two years to transpose it into their national laws and six months to apply it.
Commission launches public consultation on the review of the General Product Safety Directive
On 23 June, the European Commission launched an Inception Impact Assessment (Roadmap) on the review of the General Product Safety (GPSD) Directive 2001/95/EC, with a deadline for contribution on 1 September. The review aims to tackle product safety challenges linked to new technologies and online sales channels. Market surveillance rules are „complex and not fully effective”, the Commission argues. The GPSD provides a legal framework for non-harmonized non-food products and establishes the EU Rapid Alert System (RAPEX). The main problems identified by the Commission are product safety challenges linked to new technologies, product safety challenges in the online sales channels (level playing field), insufficient recall effectiveness, complex and not fully effective market surveillance rules, and inconsistent application of product safety rules for food-imitating products. The Commission identifies the following policy options in its Roadmap: keeping the status quo, improving implementation and enforcement of the existing legal framework, targeted or full revision of the Directive, and the integration of legal instruments. Furthermore, The EP IMCO Committee is currently working on an own-initiative Report on addressing product safety in the single market.
Commission publishes first GDPR evaluation report
On 24 June, the European Commission published its first evaluation report of the General Data Protection Regulation, two years after its implementation in 2018. The report states that the GDPR has proven to be successful in offering citizens a strong set of enforceable rights and has proven to be flexible in supporting unexpected situations such as the COVID-19 pandemic. However, some shortcomings still apply, and the Commission’s report identifies several areas for improvement, namely emphasizing the resources provided to data protection authorities (DPAs) and the need to address the fragmentation in the way Member States apply the law, crucial areas that were also flagged by Ecommerce Europe to the European institution on several occasions. The Commission finds that DPAs have been making increasingly use of their stronger corrective powers, ranging from warnings to administrative fines. However, they need to be adequately funded by their respective governments to acquire the needed human and technical resources. The Commission commits to using all tools at its disposal, including infringement procedures, to ensure Member States’ compliance with the GDPR. The use of infringement proceedings in the context of data protection would be a precedent in the EU. Additionally, vis-à-vis large digital platforms and integrated companies, the Commission stresses that strong and effective enforcement of the GDPR, especially in online advertising and micro-targeting, is essential to protect individuals’ rights. In terms of future steps, the Commission reveals it will set up a so-called „Data Protection Academy” designed to facilitate exchanges and cooperation between EU and foreign data protection authorities, as well as engage more with African partners to promote regulatory convergence as part of the digital chapter of the new EU-Africa partnership. Furthermore, it will explore whether possible future targeted amendments to certain provisions of the GDPR might be appropriate, in particular regarding records of processing by SMEs that do not have the processing of personal data as their core business (low risk), and the possible harmonization of the age of children consent in relation to information society services. Ecommerce Europe, also as an active member of the European Commission’s Multistakeholder Expert Group on the application of the GDPR, will continue feeding the work of the EU institutions with its contributions to ensure that the interests of e-commerce players and consumers are well balanced.
Ecommerce Europe met with the Cabinet of Commissioner Sinkevičius for Environment
On 26 June, representatives of Ecommerce Europe and the German e-Commerce Association (bevh) met with Ms. Rozalina Petrova, Member of Cabinet of Commissioner for Environment, Oceans and Fisheries, Virginijus Sinkevičius. Ms. Petrova elaborated on the Commission’s focus on waste prevention as well as on the reuse, repair and increase of lifetime of products. Ecommerce Europe and the bevh presented the priorities of the sector, and reflected on the impact of COVID-19 on the role the sector in a fair and sustainable transition and recovery. The question of VAT on donations was raised in connection to the plan for a EU ban on destruction of unsold goods. Ms. Petrova stated that barriers to the exemption from VAT for donations stemmed more from national legislation than from EU rules, as there were Member States who already allowed for such exemptions. She argued for the use of extended producer responsibility as a tool for sustainability and was interested in receiving further input from the sector. Reusable packaging and green taxation were also discussed. Ecommerce Europe will follow up by sending feedback on areas of interest to the Commission later in the year.
Third collective redress trialogue to be held today
After intense discussion in the past weeks in the Council Working Party (meetings on 3 and 10 June and written exchanges since then) the Croatian Presidency sent to COREPER a compromise text for examination and political endorsement on 17 June 2020. It is based on a Commission non-paper that was circulated at the end of May. The revised mandate of the Council serves as a basis for the next trilogue with the European Parliament and Commission on 22 June. The Presidency is linking the need for a swift agreement with the context of COVID19 crisis where consumer rights have been strongly affected. However, some problematic elements remain, such as lack of a true homogeneity requirement for collective redress, inclusion of GDPR in the scope and the need for proper safeguards on qualified entities. If the trialogue does not result in an agreement, the file will be taken over by the German Presidency, who have not commented on it but is expected due to pressure to have to prioritize the closure of the file.
US withdrawal from OECD Global Digital Tax talks
On 17 June, US Trade Representative Robert Lighthizer stated that United States Treasury Secretary Steven Mnuchin decided to pull out of negotiations on digital services taxes with European Union officials after they failed to make any progress. On 12 June, Mnuchin sent a letter announcing the United States will no longer be part of the negotiations, suggesting a pause in the OECD talks on international taxation while governments around the world focus on responding to the COVID-19 pandemic and safely reopening their economies. Yet, some US officials still believe an agreement could be reached by the end of 2020. After Washington confirmed that it had pulled out of the OECD talks, officials including Bruno Le Maire, French Finance Minister, and Paolo Gentiloni, European Economy Commissioner, expressed their support for national or EU-wide digital levies plans that would likely bring retaliation from the United States. France stated that it would enforce its national digital services tax, while Italy and the UK stated they remained hopeful for a global solution. At the EU level, the Commission said it would revive plans for an EU-wide tax if the OECD level negotiations become thwarted by US’s withdrawal. The tension between the US and the EU could transform into a trade war, given the active US probe into national digital tax bills and its threat to impose tariffs on French products if France enforces its digital tax. For now, Angel Gurría, the OECD’s Secretary General, urged countries to remain at the negotiating table with the aim of reaching a global digital tax deal by year-end. Yet, he added, failing to agree on a global solution would eventually increase trade disputes just as governments worldwide were struggling economically because of the COVID-19 public health crisis.
Commission publishes Report-contribution from the Multistakeholder Expert Group to the 2020 GDPR Evaluation
On 17 June, the European Commission published the Contribution from the Multistakeholder Expert Group to the Commission 2020 evaluation of the General Data Protection Regulation (GDPR). This report is an update of the contribution of the expert group, which gathers business and civil society associations, among which Ecommerce Europe, on the basis of the Commission’s revised questionnaire of 25 November 2019. Members of the Expert Group emphasized the considerable investments businesses have made in ensuring compliance with GDPR and the workload generated by GDPR accountability requirements. Several organizations experienced difficulties in respect of the information technology systems they use and found it challenging to deal with data subjects’ requests for access and erasure. Some members indicate difficulties in applying the GDPR stemming from the way that certain provisions of GDPR are formulated (absence of a definition of ‘risks’ in relation to personal data breach notification, no definition of ‘processing on a large scale’, no minimum threshold for when to include a processing activity in the records). Some members complain that the GDPR lacks exceptions for SMEs, and that the law in some Member States obliges them to appoint a Data Protection Officer also in situations not required by the GDPR. Several members report that, while there has been a high level of awareness of individuals about the GDPR, they do not always fully understand the impact of the GDPR; for example, there are misunderstandings leading to the assumption that it is always necessary to obtain their consent or that the right to erasure is absolute. Some members also report concerns on the fact that the ePrivacy Regulation is not yet adopted, which leads to legal uncertainty for telecom operators and online services on the application of the law and on the scope of the future additional requirements. Therefore, they call on the Commission, the Parliament and the Council to fully align ePrivacy with the GDPR.
EP JURI Committee discusses draft opinion on Digital Services Act
On 15 June, European Parliament’s JURI Committee considered its Draft opinion on IMCO’s Draft report called ‘Digital Services Act: Improving the functioning of the Single Market.’ The rapporteur, Member of the European Parliament (MEP) Patrick Breyer (Greens/EFA, DE) focused on three key issues: privacy, unlawful content and interconnectivity. He called for the end of the permanent tracking and recording of online behavior and argued for the right to use digital services anonymously. He demanded more user control over the content they wished to see, argued for the ban of online filters and supported the evaluation of the legality of messages by independent public authorities. Lastly, he stressed the lock-in effect of tech companies on their platforms, instead of interconnectivity with other services. The EPP argued that the issue of data protection at the EU level would not be solved through anonymity but rather through stable and predictable digital services rules as well as accountable data protection rules. Furthermore, the EPP called for a balance between protecting freedom of expression and taking down misleading or hateful content, stating that it was up to the platforms to flag the offence and to respond to authorities’ request to take down content but that stricter regulation on digital content was inadvisable as it had to match regulation offline. S&D and Renew Europe expressed general support for the opinion and opposed the idea of ex-ante content control. The deadline for amendments was 17 June and the Committee vote will be held on 3 September.
DG GROW replies to Ecommerce Europe on P2B ranking Guidelines
Ecommerce Europe reached out to the European Commission’s DG GROW at the end of April to share members’ remaining concerns in view of the application of the Regulation on (EU) 2019/1150 on Platform-to-Business (P2B) relations, which will come into application on 12 July 2020. We specifically flagged issues related to ranking (art. 5) and the fact that the Commission’s Guidelines are unduly delayed by several months, basically leaving businesses without the necessary clarity on how to update their terms and conditions. Last Friday, DG GROW informed Ecommerce Europe that the Commission is advancing with the necessary procedures to publish them. However, due to the unprecedented events (read “COVID-19”), the Commission had to modify its original intention to have these guidelines available in April 2020. If the Commission can proceed with its new timetable, the guidelines should be published in July, but they cannot confirm it yet. The Commission asked us to reassure our members that they are using their “best endeavors to expedite the publication of the ranking guidelines and that the guidelines, and the proposed detailed Q&A, are both documents that shall remain a valuable source after the application date of the Regulation.” On Tuesday 16 June, we will have a follow up call with other associations to further discuss this matter and we will update members accordingly.
Ecommerce Europe sent its contribution to the Commission’s public consultation on AI
Ecommerce Europe contributed on Friday 15 June to the Commission’s consultation on the White paper on Artificial Intelligence. The key messages highlighted in the reply are: the need to ensure access to general and practical knowledge on AI, but also strong cooperation to ensure the EU has the necessary capacity to develop state of the art but also accessible AI solutions; the fact that the existing EU framework is sufficient to tackle concerns arising from the development and use of AI solutions when it comes to safety and liability; and that particular attention should be paid to full harmonization of national legal framework and legal certainty (e.g. definition of the role of deployers). The result of the consultation will feed in the European Commission’s work on a legislative proposal on AI in Q4 2020.
EU Parliament starts negotiations on the Digital Services Act
The Member of the European Parliament Alex Agius Saliba (S&D, MT) has started drafting compromise amendments on his draft report called “Digital Services Act: Improving the functioning of the Single Market” in the European Parliament’s IMCO Committee, according to a leaked document. The spirit of the initial draft report is not changed, yet additional requirements have been added for platforms in the following areas: fair contract terms and general conditions; transparency requirements on commercial communications – including the introduction of accountability and fairness criteria of algorithms used for targeted advertising; and notice and action mechanisms to deal with illegal content. Additionally, he states that the Digital Services Act should “maintain its derogations of non-active providers” and calls on the Commission to clarify the concept of active versus passive hosts, which under the 2000 e-Commerce Directive determines whether an intermediary is liable for illegal content hosted. Mr. Saliba calls for a differentiation between the measures for digital services offered in a purely business-to-business relationship, and services which are targeted directly at consumers and the general public. Shadow rapporteurs from the political groups will meet on Monday 15 June to discuss the text.
Commissioner Dombrovskis replies to Ecommerce Europe on the impact of COVID-19 on the transition to Strong Customer Authentication
Ecommerce Europe reached out to the European Commission on 31 March asking that “full consideration be given to granting a harmonised extension to the current deadline of 31 December 2020 for the migration to SCA”. The European Commission shares that the European Banking Authorities to extend the period of regulatory flexibility, and the Commission themselves do not support any further delay. The rules are therefore set to fully apply by 31 December 2020. You will find the letter here.
Omnibus Directive Transposition: Commission publishes draft minutes of the first workshop
The European Commission’s DG JUST published the draft minutes of the first workshop on the transposition of the Directive on better enforcement and modernization of EU consumer protection (so-called “Omnibus Directive”) adopted on 27 November 2019. The new rules on the announcement of price reductions were also part of the discussion with Member States. On its scope, DG JUST clarified that price comparisons where traders demonstrate a price advantage by comparing to another reference price (e.g. ‘recommended retail price’), would not be subject to the new rule but they remain subject to the Unfair Commercial practices Directive (UCPD) provisions. It depends on the traders’ business model whether they announce a reduction of their own prices (in accordance with the rule) or compare their prices with other traders’ prices or recommended retail prices. Obviously, they need to make it absolutely clear to consumers that their announcement is indeed a price comparison and not a reduction of their own price. launching price together with other forms of price advantages have also been discussed (see the draft minutes for more information). EU Member States have two years to transpose these new rules: national implementation measures must be adopted by 28 November 2021 and Member States are required to apply the new measures from 28 May 2022, with some Member States already making progress on the transposition process. Due to the Coronavirus pandemic, Commission’s work on the Directive will likely resume in September, with the second transposition workshop tentatively planned for October 2020.
Council publishes draft conclusions on shaping Europe’s digital future
On 3 June, the Council of the EU published an updated draft conclusions on Europe’s digital future. The conclusions emphasize the importance of accelerated digital transition to EU’s recovery from the COVID-19 generated economic crisis and call for reinforced European digital sovereignty. Member States express support for the Commission’s plans for a European cloud federation and for a labeling scheme for artificial intelligence, as long as their use remains voluntary. On the Digital Services Act, national delegations stressed the need for clear and harmonized rules on responsibilities of digital services and welcomed the Commission’s intention to look into ex-ante rules for platforms. In terms of sustainability, the current conclusions appear weaker than previous versions suggesting that the digital sector should ‘actively contribute’ to EU’s climate neutrality objectives instead of ‘make its own processes climate neutral as soon as possible’ as previously proposed. Member States’ deputy ambassadors endorsed the document without any proposed changes and European ministers will formally adopt it through a written procedure in the coming days.
Launch of Digital Services Act consultation
On 2 June, the European Commission launched the consultation for the Digital Services Act. Stakeholders will have until 8 September to weigh in on the way future platform rules are created. Additionally, the Commission has published two inception impact assessments on the DSA (also known as ‘roadmaps’) focusing on the process of the future legislation, open for feedback until 30 June. The first roadmap looks at policy options aimed at the internal market, considering a legal instrument regulating online platforms’ procedural obligations, a more comprehensive update of the e-Commerce Directive, and a regulatory oversight system supported at EU level. The second one focuses on ex-ante rules, with the Commission considering a revision of the Platform-to-Business Regulation, adoption of a horizontal framework for the collection of information from online platforms acting as gatekeepers, and the adoption of a new ex-ante regulatory framework for large platforms. Internal Market Commissioner Thierry Breton supported the launch of the consultation with a blogpost defining the key questions for EU policymakers at the moment. He urged interested parties to participate in the DSA public consultation. French Finance Minister Bruno Le Maire also welcomed the launch of the consultation, arguing that it would complement France’s efforts for the fair taxation of Big Tech. He argued for economic ex-ante rules of structuring digital platforms as well as stronger platform responsibility in terms of illegal or dangerous content and products.
Ecommerce Europe attended event on micro-targeting in the Digital Services Act
On 4 June, Ecommerce Europe attended a webinar on advertising and micro-targeting in the Digital Services Act (DSA) with MEP Tiemo Wölken (DE, S&D), rapporteur of EP JURI Committee’s own initiative report on the DSA. Mr. Wölken argued that legal yet harmful content such as micro-targeting should be banned or, at least, consumers should be given the option to opt out. He praised the Commission for including questions on content curation and micro-targeting in the DSA consultation and admitted that he expects significant resistance from Member States and shareholders. Additionally, he called for one powerful EU agency instead of several limited ones to provide oversight and ideally work on guidelines together with the stakeholders. He admitted his report does not distinguish between SMEs and large platforms and expressed his certainty that that would be addressed during the upcoming consideration of amendments and compromise amendments in JURI (end of June/beginning of July).
European Commission launched Digital Services Act public consultation
Internal Market Commissioner Thierry Breton announced the launch of the public consultation on the Digital Services Act (DSA) on 2 June 2020. The Commission is also seeking input (until 30 June) on two roadmaps on the Digital Services Act, namely on ex ante regulatory instruments and on the internal market and responsibilities for online platforms. A roadmap (also called inception impact assessment) basically sets out the problem the Commission would like to address, how to address and what options it thinks are available. For what concerns the main, 3-month public consultation, the Commission is seeking input on six areas related to online platforms:
- Keeping users safe online: evidence on illegal activities online and harmful but not illegal material such as disinformation
- Upgrade to liability regime of digital intermediaries: evaluation of the current framework and need for upgrades for social media, search engines, online marketplaces and cloud storage providers
- Issues deriving from the platform’s gatekeeper power: mapping problems experienced by players on the market as well as definitions of notions such as ‘market power’ and ‘gatekeeping power’. Issues addressed include data portability, barriers to entry, terms and conditions for business relations with platforms
- Other ‘emerging’ issues: input on transparency in online advertising
- Individuals offering services through platforms: terms and conditions as well as potential health and safety risks of ride-hailing, food delivery and domestic work platforms.
- How to complete the single market for digital services: enforcement of existing rules and more efficient regulators
Ecommerce Europe will work together with its members to prepare a response to the public consultation, which is ending on 8 September 2020. Members’ internal consultation has already started a few weeks ago. All members are invited to share their feedback on the public consultation by sending an e-mail to Luca Cassetti (lucacassetti@ecommerce-
EP LIBE Committee discussed Draft Report on DSA and fundamental rights
On 25 May, the European Parliament’s LIBE Committee considered its Draft Report on the Digital Services Act and fundamental rights issues posed, prepared by MEP Kris Peeters (EPP, BE). The rapporteur argued that national legislation regarding illegal online content would create a fragmented digital market and called for mandatory EU-level legislation. He highlighted the fine line between freedom of expression and illegal content and concluded that automated tools were not sophisticated enough to recognize the necessary content contextualization. Therefore, a combination of automation and transparent human oversight would be key in the future. Peeters recommended keeping the prohibition of the general monitoring obligation, the limited liability of content and the internal market clause to avoid overregulation but called for the introduction of obligations on meaningful transparency, accountability for content moderation, and a proactive approach. Finally, he suggested the creation of an independent EU body to exercise oversight on the procedural efforts of digital services providers. The S&D group generally supported the draft report but argued against the idea of platforms taking proactive measures and suggested a stronger emphasis on more non-discrimination and fundamental rights as opposed to content moderation. The Renew Europe group supported S&D and called for Member States to improve access to and the efficiency of their law and enforcement systems to ensure universal approach to illegal content offline and online, which would also be supported by the establishment of a EU system of digital services supervision. The deadline for amendments is 10 June.
EP IMCO Committee published two papers on the Digital Services Act
The European Parliament’s IMCO Committee published a summary of the Workshop on ‘E-commerce rules, fit for the digital age’ with IMCO Chair Petra de Sutter and the rapporteur for the Digital Services Act (DSA) initiative report, Alex Agius Saliba. The workshop was devoted to discussing which areas of the e-Commerce Directive were outdated and needed reforming in the DSA. Furthermore, IMCO also published a study on ‘The functioning of the Internal Market for Digital Services: responsibilities and duties of care of providers of digital services’. The paper reflects on responsibilities and duties of care of online intermediaries as set out in the e-Commerce Directive and gives recommendations for the upcoming DSA.
Ecommerce Europe co-signed a letter on the representative actions proposal
A Commission non-paper on the proposed Directive on collective redress, shared by the Croatian Presidency with member states’ delegations for discussion on the next Working Party meeting on 3 June and Coreper on 10 June, was subsequently leaked. The wider business sector, including Ecommerce Europe, decided to express its concern that the document was drafted without proper discussion in trialogue and seems to push for a deal at any cost. Therefore, representatives of the European business community have sent a letter today to the Croatian Presidency, Coreper I, the EP Rapporteur (MEP Geoffroy Didier) and the cabinets of Commissioners Reynders and Jourová, urging against rushing the conclusion of trialogue negotiations. The letter argues against the Croatian Presidency’s plan to conclude discussions in Coreper by 10 June and calls for continued deliberation of the ‘many remaining issues’, referring to a previous letter sent in 2019 where the group argued for ensuring common minimum standards as opposed to maintain already existing national systems, which would result in a regulatory ‘race to the bottom’. Business organizations pledge to continue their contributions with the aim of achieving a balanced and harmonized EU system.
European Parliament political groups formulate positions on the DSA
Political groups in the European Parliament’s Committee on the Internal Market and Consumer Protection (IMCO) have laid out their positions on the Digital Services Act (DSA). The political groups agree that self-regulation is no longer sufficient to tackling illegal content but they are divided over the political solution, with disagreement focusing around the current platforms’ liability regime. Members of the European Parliament (MEPs) have issued more than 900 amendments to the DSA Draft Report of MEP Alex Agius Saliba (S&D, MT) laying out the IMCO Committee’s stance on the DSA. EPP’s MEP Pablo Arias Echeverría doubled down on the need for obligations for online marketplaces, arguing they should identify manufacturers and sellers of products from third countries. He wants the liability regime to be further clarified, especially regarding active and passive hosting, and ex-ante rules to include a list of “obligations/prohibitions” for gatekeeper platforms. Renew Europe’s MEP Dita Charanzová insists that “harmful” legal content should not be regulated in the DSA and recommends introducing a Good Samaritan principle of sorts. Charanzová added a section on smart contracts and wants different rules for B2B and B2C platforms. The S&D Rapporteur Saliba tabled a new amendment to emphasize his skepticism about the introduction of the Good Samaritan clause. Green MEP Alexandra Geese focused on transparency and interoperability and wants fines to be up to 5 percent of a company’s total worldwide annual turnover. ECR argued that the “notice-and-action” procedure was already sufficient and did not need revision and called for the Commission to promote better cooperation between Member States in terms of enforcement. The proposed IMCO amendments and compromise amendments will be considered respectively on 8 June and 6 July.
EP JURI Committee published its Draft Opinion on the Digital Services Act
On 18 May the European Parliament’s Committee on Legal Affairs (JURI) published its Draft Opinion for the Committee for Internal Market and Consumer Protection (IMCO) with recommendations to the Commission on the Digital Services Act (DSA). The rapporteur Patrick Breyer (Greens/EFA, DE) calls for the right to use digital services anonymously to be upheld wherever it is technically possible and reasonable and urged that digital services be subjected to a specific privacy framework, limited to the extent necessary to provide and bill the use of the service. He argued that content-moderation procedures used by providers should not lead to any ex-ante control measures based on automated tools or upload-filtering to differentiate illegal content and stressed that the responsibility for enforcing the law should remain with independent judicial authorities. Finally, the draft opinion states that curating content on the basis of tracking user actions should require the user’s consent and that users of dominant social media services and messaging services should be given a right to cross-platform interaction to ensure competition and consumer choice.
EP LIBE Committee presented Draft Opinion on Digital Services Act
On 18 May the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs (LIBE) considered its Draft Opinion on the Digital Services Act: Improving the functioning of the Single Market. The rapporteur Paul Tang (S&D, NL) called for a complete ban on personalized advertisements to ensure that they would not be an incentive to infringe on privacy rights and for age verification mechanism to ensure the protection of minors online. He argued for the protection of data and digital dignity and wanted to make sure that there would be an alternative available for people who did not trust this technology and did not want to use their face or voice for recognition. He underlined the importance of fair and non-discriminatory automated decision-making algorithms to disseminate content. . He concluded by arguing for auditors for these algorithms as well as for a European supervisor who would provide platforms with guidelines according to a specific duty of care between responsibility and liability. The deadline for amendments was 19 May.
European Commission to publish new MFF, Recovery Fund and updated Work Program 2020
On Wednesday 27 May, the European Commission is expected to come up with several landmark publications. The new proposal for the Multiannual Financial Framework (MFF) 2021-2027 will be published and it will be accompanied by an EU Recovery Fund aimed at the economic recovery of the EU amid the COVID-19 crisis. Apart from these two major publications, the Commission is expected to finally publish its updated Work Program 2020, as the original work plan proposed at the end of January 2020 has been significantly shaken up as a consequence of the COVID-19 outbreak.
Impact of COVID-19 on e-commerce: Ecommerce Europe sends letter to EU Commission President
Ecommerce Europe has sent a letter to European Commission President Ursula von der Leyen, in which it shares the results of the new survey on the impact of the COVID-19 crisis on the e-commerce sector. The survey shows that the e-commerce sector has been a reliable factor throughout the crisis, in which confinement measures prevented many people from visiting physical stores. Ecommerce Europe finds that European economies are slowly trying to get out of the crisis, with 95% of respondents indicating that their countries have started an exit strategy. Moreover, the e-commerce sector has made a slight recovery in the last months, as fewer respondents currently expect a decrease in sales (from 73% to 39%). Finally, Ecommerce Europe stresses the importance of information sharing in the light of the upcoming recovery phase of the European economies.
EP IMCO Committee study on the assessment and reform options of e-Commerce Directive
The European Parliament’s Committee on Internal Market and Consumer Protection (IMCO) requested a study on the e-Commerce Directive (ECD) focusing on an assessment of the Directive and exploring options for a reform. The study finds that the definition of the Information Society Service has proven robust over time and it argues that the Internal Market clause is one of the greatest successes of the ECD. The study also finds that the country of origin principle should certainly be maintained, even though the cooperation between Member States could be strengthened. Moreover, the ECD could be extended to cover online platforms that are not established in the EU but provide services to EU customers. When it comes to liability rules, the ECD lacks sufficient safeguards to prevent violations of fundamental rights. The study further states that the revision of the ECD should be accompanied by two complementary reforms within the Digital Services Act. The first complementary reform could increase the incentives for data sharing and mobility. The second complementary reform could consist in the adoption of stricture rules for online platforms raising systemic risks to the European economy and society.
EP IMCO study on new economic opportunities for digital services
The European Parliament’s Committee on Internal Market and Consumer Protection (IMCO) requested a study on the new economic opportunities and challenges for digital services 20 years after the adoption of the e-Commerce Directive (ECD). The study proposes three actions to foster cross-border-e-commerce, facilitate cross-border access and improve the sustainability of digital platforms. First, the proper and timely implementation of recently adopted EU measures is essential to improve the framework in which e-commerce activities are taking place, while focusing on new and better targeted interventions to address remaining problems. Second, three different option would enable the removal of existing regulatory barriers to the functioning of the Digital Single Market for copyrighted content, through lifting geo-blocking, allowing competition law to prevail over copyright law or introducing a unitary copyright title. Third, the sustainability of e-commerce in the age of platforms relies on a holistic approach, bringing together platforms, businesses, citizens, enhanced actions against illicit trade, environmentally friendly ways to power data centres and ICT infrastructure, and tax rules updated to the challenges of the digital age.
EP JURI Committee publishes Draft Opinion on Digital Services Act
The European Parliament’s Committee on Legal Affairs (JURI) published its Draft Opinion on the Digital Services Act (DSA). In the report, the JURI Committee recommend the Internal Market and Consumer Protection (IMCO) Committee to incorporate certain suggestions into its motion for resolution. The JURI Committee stresses that wherever it is technically possible and reasonable, intermediaries should be required to enable the anonymous use of their services and payment for them, since anonymity effectively prevents unauthorized data disclosure and identity theft. Moreover, the report notes that the use of personal data concerning the use of digital services should be subjected to a specific privacy framework. The DSA should also prohibit any obligation on hosting service providers or other technical intermediaries to use automated tools for content moderation. When it comes to law enforcement, the responsibility to decide on the legality of online activities and ordering hosting service providers to remove or disable access to illegal content as soon as possible should rest with independent judicial authorities.
EP IMCO Committee to discuss Digital Services Act and artificial intelligence files
The European Parliament’s Committee on Internal Market and Consumer Protection (IMCO) will hold two meetings this week in which it will discuss the Digital Services Act (DSA) and several files concerning artificial intelligence (AI). On 18 May, the IMCO Committee will discuss Product Safety in the Single Market and the Framework of ethical aspects of AI, robotics and related technologies (agenda). On 20 May, the IMCO Committee will discuss its Draft Report on the DSA and the Civil liability regime for AI (agenda).
European Commission postpones VAT e-commerce rules by six months
The European Commission has decided to postpone the entry into force of two EU taxation measures to take account of the difficulties that businesses and member States are facing at the moment within the COVID-19 crisis. Firstly, the Commission decided to postpone the entry into application of the VAT Ecommerce Package by six months. This postponement will include the launch of the VAT One-Stop-Shop, the removal of the import VAT exemption for small consignments (up to € 22 euros) and the Import One-Stop-Shop (IOSS) VAT return, and the rules on marketplaces as deemed suppliers in relation to VAT. Therefore, these rules will apply as of 1 July 2021 instead of 1 January 2021, giving Member States and businesses more time to prepare for the new VAT e-commerce rules. Secondly, the Commission also postponed the EU Directive on reporting cross-border tax arrangements (DAC 6). The Directive will still apply as of 1 July 2020, but reporting deadlines for companies and deadlines for the exchange of information will be deferred by three months.
Ecommerce Europe’s call on a harmonized approach to contactless click-and-collect solutions
On 5 May, Ecommerce Europe sent a letter to Internal Market Commissioner Thierry Breton calling on the European Commission to promote a harmonized approach to contactless click-and-collect solutions in the EU. This issue, which was flagged to us by one of our members, is related to the fragmentation of the Single Market caused by the fact that solutions such as contactless click-and-collect and deliveries, which are crucial in this period of COVID-19 crisis, are not allowed in all EU countries, thus creating uncertainty and placing a clear disadvantage on omnichannel retailers in certain markets. The day after we sent the letter, we were contacted by the European Commission’s DG GROW, which thanked us for the initiative and mentioned that it would be interested in bringing this matter forward and prepare for a sort of reaction to promote a harmonized approach. More information will follow in the coming weeks.
European Data Protection Board adopts new Guidelines on Consent under the GDPR
On 4 May, the European Data Protection Board (EDPB) has adopted and released its Guidelines 05/2020 on consent under Regulation 2016/679/EU (GDPR). In the Guidelines, the EDPB clarifies that the validity of consent provided by data subject when interacting with so-called “cookie-walls” makes consent not freely given and is thus invalid. Furthermore, on scrolling and consent, the EDPB states in the new Guidelines that scrolling does not constitute valid consent. After being inquired by Ecommerce Europe regarding the fact that there is no stakeholder consultation on the new document, the EDPB admitted it has decided not to open a public consultation on the Guidelines 05/2020 because they “only form a clarification of an already existing document, which was subject to public consultation in the past”. We will discuss with other EU trade associations the possibility for a joint statement criticizing the way of proceeding of the EDPB and calling for a consultation period. Meanwhile, members are invited to inform Ecommerce Europe of their views on the updated sections of the guidelines before Wednesday 20 May COB by sending an e-mail to Maike Jansen (maikejansen@ecommerce-europe.
EP IMCO Committee schedules new debate to discuss Draft Report on Digital Services Act
After the extremely short meeting of the European Parliament’s Committee on Internal Market and Consumer Protection (IMCO) on 4 May, a new date for a proper debate has been found. The debate for the Draft Report on the Digital Services Act (DSA) will now take place on 20 May. During the debate of 4 May, Commission Executive Vice-President (EVP) Vestager already expressed her support for the Draft Report of MEP Saliba and she told that the Commission is looking at ex ante instruments in the field of competition policy (see below for more information).
European Commission to contract study on gatekeeping powers of digital platforms
The European Commission is to contract a €600.000 study on the gatekeeping or market-dominating power of digital platforms. The study assists the Commission’s impact assessment and aims thus to gather evidence that could feed into the upcoming Digital Services Act (DSA). The study aims to provide an analysis on the issues raised by digital platforms with strong data-driven network effects and the potential regulatory failures. The contractor will carry out studies in sex areas of concerns identified by the Commission. These areas include self-preferencing, data access, information asymmetries, digital identity services, interoperability of services and leveraging conglomerate. The Commission considers an ex ante regulatory framework to complement competition rules, and as a way of securing the contestability of digital markets as well as improved regulatory oversight. This call by the Commission is in line with the earlier remarks of EVP Vestager, who emphasized the need for a ‘new competition tool’ during last Monday’s (4 May) meeting of the European Parliament’s IMCO Committee.
European Commission started online scam sweep in context of COVID-19
To continue efforts against consumer scams and misleading practices related to COVID-19, the European Commission has started a so-called sweep. In this COVID-19 sweep, Consumer Protection (CPC) authorities agreed to rapidly carry out an online investigation exercise in a coordinated and simultaneous manner of websites and advertisements to identify infringements of the Unfair Commercial Practices Directive. The sweep operates in two-step action process. The first step is the high-level screening of online platforms, which is linked to the prima facie investigation of the most common consumer scams as outlined in the CPC common position, and the analysis of their occurrence on online platforms. This high-level screening also provides insight into the effectiveness of proactively taken measures by online platforms. The second step is the in-depth screening of certain offers and advertisements. The websites or platforms that are associated with irregularities will be flagged for further investigation. National e-commerce associations are invited to disseminate the information on the sweep among their members as soon as possible.
EP IMCO Committee discussed Draft IMCO Initiative Report on the Digital Services Act
The European Parliament’s Committee for Internal Market and Consumer Protection (IMCO) today discussed the Draft Report on the Digital Services Act (DSA), prepared by Member of the European Parliament (MEP) Alex Agius Saliba (S&D, MT). Saliba presented his Draft Report and emphasized the need for updated regulation as the wide spread of digital services has also led to an increase in violations via these digital services. Even though his presentation was subject to significant time constraints, he shortly introduced the “What is illegal offline, is illegal online” principle and the “Know Your Customer” principle. Moreover, he emphasized the need for regulation to prevent the distribution and sale of products that do not comply with EU safety rules, and wants future regulation to ensure that market entrance of SMEs is facilitated. MEP Dita Charanzová (RE, CZ) also presented her Draft Opinion on the DSA. Most importantly, Charanzová corrected an error in her draft report, where she had asked platforms to monitor advertisements, but she did not mean to refer to a general monitoring clause, but rather to a voluntary measure.
EP IMCO Committee published study on effective model of enforcement for Digital Services Act
The European Parliament’s Committee for Internal Market and Consumer Protection (IMCO) published a study called ‘Enforcement and cooperation between Member States: Ecommerce and the future Digital Services Act’. The study presents an overview of possible options for an effective model of enforcement for a future Digital Services Act (DSA). The study focuses on four areas of regulatory design being the failure of self-regulation in relation to platforms, the importance of correct regulatory framing, the necessity of focusing on the internal operations of platforms and finally, that the scope of the DSA should be limited but include robust transparency and enforcement measures. Furthermore, the study evaluates a range of enforcement strategies alongside barriers to Member States cooperation and effective enforcement. The study found that the enforcement model of the DSA seeks to combine the best attributes of the Consumer Protection Cooperation Regulation (CPCR) and the GDPR approach.
European Parliament published report on the reform of EU liability regime
The European Parliament has published a report on the reform of the EU liability regime for online intermediaries, which serves as a background on the forthcoming Digital Services Act (DSA). The report focuses on the struggles of the EU liability regime to capture liability issues raised by new actors, such as search engines, social networks and online marketplaces. The forthcoming DSA package will set rules on how companies will have to policy illegal and possibly harmful content online. Against this background, the study aims to describe the current EU liability regime, highlight the implementation gaps that have been identified and present the main proposals for reforming such an online liability regime and the main policy questions that have been discussed so far.
OECD: COVID-19 increased need to reach an agreement on a global digital tax
On 4 May, Pascal Saint-Amans, Director of the Centre for Tax Policy and Administration of the Organization for Economic Cooperation and Development (OECD) has stated that the COVID-19 crisis shows an increased need “to reach an agreement on the digitalization of the tax economy under Pillar 1, and renewed impetus on Pillar 2 with rising pressure on public finances pushing for minimum taxation of multinational enterprises”. Saint-Amans said this in the context of the virtual OECD Tax Talks that are taking place today.
Poland imposes digital tax on the revenue of streaming platforms
On 29 April, the Polish Finance Minister announced that Poland will introduce a 1.5% levy on the revenue of streaming platforms including Netflix and Amazon. The introduction of this tax comes as calls mount for a broader taxation on the operation of tech firms in Europe to mitigate the economic fallout from the COVID-19 pandemic. European Commissioner Paolo Gentiloni has recently stated that the strain imposed by COVID-19 on the European economy highlights the importance of agreeing on a global framework for digital taxation. Discussions on a global digital tax will continue on 1 and 2 July in Berlin as the G20/OECD plenary session will take place.
A study from the Oxford Internet Institute of the University of Oxford found that EU countries are already rolling out systems to tax income from the platform economy.
EP JURI Committee published Draft Initiative Report on the Digital Services Act
On 27 April, the European Parliament’s Legal Affairs Committee’s (JURI) Rapporteur for the Digital Services Act (DSA) file, Tiemo Wölken (S&D, Germany), published his Draft Initiative Report (INL). The INL is the second draft report from the Parliament, after IMCO’s MEP Alex Agius Saliba published his Draft Initiative Report last week. The JURI Draft Report calls on the Commission to make the “notice-and-action” principle more effective. To achieve this, Wölken identifies two ways via which the DSA can strengthen the notice-and-action procedures: (1) laying down a clear procedural framework for these procedures and including them in the terms and conditions of content hosting platforms; and (2) ensuring that notice-and-action procedures allow for effective judicial redress. The Rapporteur prefers this approach over asking hosting platforms to become more proactive and calls on the Commission to not include any provisions to force hosts to implement any automated ex-ante content moderation tools or filters. To make judicial redress effective, the Draft Report calls for the creation of independent dispute settlement bodies in the Member States with legal experts responsible for handling disputes related to content moderation decisions. Similar to the IMCO Draft Report, Wölken also calls for the establishment of a European Agency responsible for ensuring compliance with the DSA. Finally, the DSA should include measures to limit the collection of data for the purpose of building targeted advertisement profiles and give users a certain degree of control over the content curation algorithms.
Application of VAT Ecommerce Reform might be delayed
In a recent virtual meeting of the Low Value Consignment Project Group of European Commission’s DG TAXUD, of which we are a member, it was mentioned that it is expected that the EU Member States will postpone the implementation date of the VAT Ecommerce Reform (click here for a summary of the new measures) by 9-12 months. It is also expected that the EU will allow a transition period to adjust the Members States’ IT systems until 31 December 2022, with the potential consequence of creating an EU at different speeds. Commission and Member States are discussing not only the need for a uniform EU-wide postponement but also if the postponement should include all measures or just be partial. It seems that there is a broad support among Member States for an EU-wide approach on the postponement, due to both the Coronavirus crisis and Brexit. For the postponement, the European Commission has to put forward an official proposal that then needs to be adopted by the (ECOFIN) Council at unanimity.
European associations send joint letter on Strong Customer Authentication to the EBA
Ecommerce Europe cosigned a letter together with organizations including EPIF, EuroCommerce, DIGITALEUROPE, Visa and Mastercard, on Strong Customer Authentication. The letter calls on the European Commission and the European Banking Authority (EBA) to consider appropriate additional measures and coordination to assist in the smooth transition to SCA in all EU Member States equally, including the possibility of a 6-month extension of the deadline.
Eurostat publishes figures showing online shopping in Europe continues to grow
On 20 April, Eurostat published new figures that show a continuation of the growth in online shopping. The survey shows that 60% of people aged 16 to 74 shopped online during the year prior to the 2019 survey, compared to 56% in 2018. The highest shares were found in Denmark (84%), and Sweden (82%), followed by the Netherlands (81%) and Germany (79%). On top of this, Eurostat found that the share of enterprises that rely on e-commerce is also increasing. 17% of EU enterprises reported online sales of at least 1% of their annual turnover, which is the same as the previous two years but an increase compared to the 13% recorded in 2009. Ireland has the highest share with 36% and Austria recorded the strongest growth as the share of enterprises relying on e-commerce increased form 14% in 2017 to 20% in 2018.
European Commission to delay Digital Services Act and framework for artificial intelligence
In the light of the COVID-19 crisis, the European Commission is currently reassessing its work program for 2020. A draft of the revised work program reveals that the Commission might postpone the publication of the Digital Services Act, originally scheduled for the last quarter of 2020, to the first quarter of 2021 as this is unlikely to have a negative impact. The legislation on artificial intelligence, that was expected by Q4 2020, is also likely to be moved to the first quarter of 2021.
EP IMCO Committee published Draft Report on product safety
On 3 April, the European Parliaments’ Committee for Internal Market and Consumer Protection (IMCO) published a Draft Report on addressing product safety in the EU. The report calls on the Commission to evaluate the role marketplaces could play in improving the detection of unsafe products, and to propose mandatory rules on their responsibility, taking into account the special role of SMEs as part of the Digital Services Act. Online marketplaces are encouraged to work together with Rapex in the fight against unsafe products. The draft motion for resolution stresses the need to adapt product safety rules to the digital world. This means redefining the term ‘product’ to include emerging technologies such as stand-alone software and self-learning technology driven by artificial intelligence.
EP TRAN Committee issued Draft Opinion on Digital Services Act
The European Parliament’s Committee for Transport and Tourism (TRAN) has published a Draft Opinion on the Digital Services Act (DSA). The Committee calls on the Commission to clarify liability for transport and tourism platforms, and to set a uniform obligation for platforms to verify the legality of the service offered and the service provider and to act on illegal content through a legally binding Notice and Action procedure. Furthermore, the opinion stresses the need to build on the P2B Regulation to limit the dominance of market giants in the transport and tourism sector, amongst other things by establishing well defined criteria for the “size” of platforms. Finally, the opinion stresses the need to protect platform workers, to provide transparency on algorithms and to promote sustainability.
European Commission publishes EU toolbox for introduction of ‘corona apps’
On 16 April, the Commission published an EU toolbox for the use of mobile applications for contact tracing and warning. To address privacy concerns, the toolbox includes a guidance to ensure full data protection standards of contact tracing apps. First of all, the application should be voluntary and the user has to give consent for every separate functionality of the application. The guidance also recommends member states to only use Bluetooth to have people’s applications interact, and to ensure that data storage is decentralized. Use of personal data will have to be minimized and the data should not be stored longer than necessary. The Commission also discourages the use of location data, as this would not be necessary for the purpose of contact tracing.
EP IMCO Committee issues Draft Opinion on ethical aspects of artificial intelligenc
The European Parliament’s Committee for Internal Market and Consumer Protection (IMCO) issued a Draft Opinion on the framework of ethical aspects of artificial intelligence, robotics and related technologies. The IMCO Committee wants the framework to be applicable when consumers are subject to an algorithmic system, irrespective of where the developing entities are established. Moreover, the opinion states that future regulation should take a risk-based approach, based on the potential harm that automated-decision making process can cause to consumers. The legal obligations should be based on the risk an algorithmic system exposes a consumer to. Finally, the opinion stresses the importance of consumer protection. Algorithmic systems should be transparent and explainable, and the availability of procedures for impartial review of violations caused to consumers through the use of algorithmic systems should be ensured. The EP Committee for Transport and Tourism (TRAN) has also issued its Draft Opinion.
European Parliament adopts resolution on COVID-19 pandemic
On 17 April, the European Parliament (EP) adopted a resolution on the EU’s response to the COVID-19 outbreak. The EP supports the EU’s fiscal measures and liquidity support to address the pandemic. However, the EP wants a long-term recovery plan financed through the Multiannual Financial Framework (MFF) that includes “recovery bonds” guaranteed by the EU budget. Moreover, the EP wants the EU to establish an EU Coronavirus Solidarity Fund worth at least €50 billion.
IMCO MEP Dita Charanzová shares thoughts on the Digital Services Act
The Czech Member of the European Parliament (MEP) Dita Charanzová (IMCO, Renew Europe) has recently elaborated on her priorities when it comes to the upcoming Digital Services Act (DSA). Charanzová, who recently published her Draft Opinion for the EP Legal Affairs (JURI) Committee Report, stressed that she wants to preserve the three main elements of the e-Commerce Directive of 2000, namely the country of origin principle, the limited liability regime and the prohibition of general monitoring obligations. However, some details of the current legislation could be changed, such as the scope of who is an active platform and who is a passive one. Furthermore, on ads and online marketplaces, the MEP stressed that more work should be done on online advertisement, in line with what she wrote in her Draft Opinion, which calls on platforms to “actively monitor the advertisements shown on their sites.” On unsafe products, Charanzová is in favor of a Good Samaritan clause.
EP LIBE Committee issues Draft Opinion on IMCO’s motion for resolution on Digital Services Act
The European Parliament’s Committee for Civil Liberties, Justice and Home Affairs (LIBE) has sent its Draft Opinion to the Committee for Internal Market and Consumer Protection (IMCO) on the motion for resolution the latter is preparing on the Digital Services Act. The LIBE Committee underlines that digital services and the underlying algorithms need to respect fundamental rights such as privacy, non-discrimination and the freedom of speech and information, and therefore calls on the European Commission to implement an obligation of transparency and explainability of algorithms. Furthermore, the LIBE Committee wants digital dignity to be ensured by having strong legislation in place to protect privacy and a reasonable duty of care.
European Commission to publish revised work program by the end of April
The European Commission is expected to publish a revised Work Program for 2020 by the end of April. The COVID-19 crisis has occupied the Commission’s agenda for the last weeks and the crisis seem not be over soon. Therefore, some of the initiatives will be postponed. The Digital Services Act is supposed to remain high on the agenda as digital services are expected to play an important role in upcoming exit strategies of Member States. The deadline for the consultation on Artificial Intelligence might be extended to give smaller companies more time to reply as they have been occupied with dealing with the COVID-19 crisis.
Spain suspends Right of Withdrawal period
Last week, Ecommerce Europe’s Spanish member Adigital informed us that Spain decided to suspend the 14-day period for consumers to withdraw from distance contracts. Ecommerce Europe is aware that in some other countries the majority of webshops (on their initiative) are offering an extension of the right of withdrawal, by giving consumers the possibility of returning the products within 30 to 60 days, in order to take into account travel restrictions imposed by the lockdown. Members are invited to notify Ecommerce Europe if their governments decided to suspend the period for the right of withdrawal via e-mail.
EP IMCO Committee and Commissioner Reynders to discuss consumer protection during COVID-19 crisis
Today 14 April, the European Parliament’s Committee for Internal Market and Consumer Protection (IMCO) holds and extraordinary remote committee meeting in which it will exchange views with the European Commissioner for Justice, Didier Reynders. Members of the European Parliament are expected to assess the actions by EU and national authorities to tackle corona-related scams on consumers. During the COVID-19 crisis, consumer protection authorities observe a strong increase in misleading claims and unreasonably high prices in digital commerce.
COVID-19 outbreak will influence the work on the Digital Services Act
The Maltese Member of the European Parliament (MEP) Alex Agius Saliba, Rapporteur for the Digital Services Act (DSA) in the Parliament’s Internal Market and Consumer Protection (IMCO) Committee, expects the COVID-19 outbreak to impact the content of the DSA. Saliba said the Coronavirus crisis has shown existing problems such as fake news and unsafe products. The vote in the IMCO committee on the initiative report has been postponed from July to September, which means newly emerged problems can be incorporated. The main focus of IMCO Committee for the DSA Initiative Report will be on the revision of the e-Commerce Directive (ECD). Saliba mentioned that the ECD includes elements that are still totally relevant today, such as the country of origin principle. Saliba said that they would not touch the limited liability regime and the prohibition of general monitoring principle, but added that clarifications are needed. He will not add removal deadlines for illegal content either but will ask the Commission to define what “expeditiously” means. In the meanwhile, the parliamentary committee for Transport and Tourism (TRAN) has issued its draft opinion on the DSA.
Collective Redress file delayed due to COVID-19
The trialogues for the Directive on the representative actions for the protection of the collective interests of consumers have been delayed. The trialogue, originally planned for 1 April, has been cancelled due the COVID-19 outbreak. Before the outbreak, the plan was to hold the trialogue meetings during the first half of 2020 in order to reach an agreement by June 2020. At this point in time, knowing the whole of Europe is in lockdown, it will be hard for the Croatian Presidency of the Council to finish this file before their presidency ends. This means that the file would pass to the upcoming German Presidency, due to start in July 2020. The Germans are strongly opposing the current EU proposal, fearing it will weaken the German redress system. Also, Germany and Austria abstained from the final vote on the Council’s general approach. If the file comes under the German Presidency, it will likely be delayed even longer and could push the negotiations to the Portuguese Presidency in 2021.
European Commission opens public consultation on GDPR
On 1 April, the European Commission launched a public consultation on the report on the application of the General Data Protection Regulation (GDPR), two years after its entry into force. The report will include the issue of international transfer of personal data to third countries (Chapter V of GDPR) and the cooperation and consistency mechanism between national data and protection authorities (Chapter VII of GDPR). The consultation is open until 29 April and Ecommerce Europe will prepare a draft contribution based on the consolidated feedback received from members so far and which had been already shared with the Commission’s Expert Group on the application of GDPR, of which we are an active member. Nevertheless, members are invited to share with us any new eventual issues they/their members encountered in the application of the GDPR by 20 April 2020 COB via e-mail to Maike Jansen (maikejansen@ecommerce-europe.
European Commission launches Coronavirus disinformation webpage on COVID-19
In the fight against the spread of disinformation during the COVID-19 outbreak, the European Commission has launched a website on which it advises citizens on how to deal with misinformation during the pandemic. The Commission first held meetings with online platforms to tackle the spread of fake news, but now stepped up actions by launching a dedicated website. Part of the website is a webpage on online scams used when people are buying products online
COVID-19 outbreak shakes up European Commission’s digital agenda
Since outbreak of COVID-19, the European Commission has devoted almost all of its attention to handling the crisis and its economic consequences. This means that the many digital initiatives that were planned for 2020, have become less prominent on the political agenda. Initiatives like the consultation on the Digital Services Act (DSA), which was planned for end March, are technically ready to be published, but still need the political approval of European Commissioner for Internal Market, Thierry Breton. Even though the Commission has not notified any official delays yet, the DSA package might be slightly delayed. When it comes to Artificial Intelligence, the consultation on the White Paper is still open until 31 May and the first hard laws are still planned to be published by the end of the year. On data, the Commission was planning to present a legislative framework for data spaces by the end of 2020 and a new Data Act in 2021. The public consultation on the Commission’s Data Strategy is still open until 31 May. In general, stakeholders would like to see extended deadlines due to COVID-19. Finally, the Commission’s two-year evaluation of the General Data Protection Regulation was scheduled for 22 April, but this date has been canceled. It not yet known what the new data for this review will be.Since outbreak of COVID-19, the European Commission has devoted almost all of its attention to handling the crisis and its economic consequences. This means that the many digital initiatives that were planned for 2020, have become less prominent on the political agenda. Initiatives like the consultation on the Digital Services Act (DSA), which was planned for end March, are technically ready to be published, but still need the political approval of European Commissioner for Internal Market, Thierry Breton. Even though the Commission has not notified any official delays yet, the DSA package might be slightly delayed. When it comes to Artificial Intelligence, the consultation on the White Paper is still open until 31 May and the first hard laws are still planned to be published by the end of the year. On data, the Commission was planning to present a legislative framework for data spaces by the end of 2020 and a new Data Act in 2021. The public consultation on the Commission’s Data Strategy is still open until 31 May. In general, stakeholders would like to see extended deadlines due to COVID-19. Finally, the Commission’s two-year evaluation of the General Data Protection Regulation was scheduled for 22 April, but this date has been canceled. It not yet known what the new data for this review will be.
Ecommerce Europe writes to Commission President von der Leyen
Following the letter Ecommerce Europe had sent to Commission President Ursula von der Leyen on the important role e-commerce is playing in the current crisis caused by the Coronavirus outbreak, Ecommerce Europe wrote a second letter to bring to her attention another important issue we, together with other EU organizations, are currently facing in relation to feedback-gathering to feed the legislative work of the EU Institutions. The letter basically calls on the European Commission to postpone upcoming public consultations and extend the deadline of the ongoing ones. A reasonable delay would allow Ecommerce Europe and its members to provide policymakers with more valuable feedback and a better representation of the European e-commerce industry. More information can be found in the letter (not for publication).
ECR Group’s representatives comment on EU Green Deal and COVID-19
European Parliament’s Budget Committee Chairman, Johan Van Overtveldt (ECR, Belgium) wrote in a statement that the Commission should produce a new proposal for the 2021-2027 EU budget given the coronavirus pandemic, and it should “take account of the new challenges and needs deriving from a post-corona world,” adding that the crisis “should not serve as an argument for a smaller budget.” His own ECR group co-member, Derk Jan Eppink (the Netherlands), had more specific ideas and told the Parliament’s plenary on behalf of his group that the Commission should “radically restructure” its proposal and that money now assigned to climate policy “has to be mobilized to address the corona pandemic.”
Ecommerce Europe presents results of second survey on impact COVID-19 on e-commerce
On 27 March, Ecommerce Europe published its second survey on the impact of COVID-19 on the e-commerce sector. The survey consulted national e-commerce associations about the general situation in their countries with regards to the COVID-19 outbreak and the impact on the functioning of e-commerce. The results show that 93% of all respondents are in a full or partial lockdown, meaning that citizens in these countries can only go out with some or very heavy restrictions. However, online shops are still allowed to maintain their activity. More information can be found in the survey or in the news article.
EP IMCO letter to EU Commission: Internal Market as the solution of the COVID-19 crisis
Today MEP Petra de Sutter, Chair of the Internal Market (IMCO) Committee of the European Parliament, wrote a letter addressed to Commission Executive Vice-President Margrethe Vestager, Internal Market Commissioner Thierry Breton, Justice Commissioner Didier Reynders and the Croatian Minister of Economy Darko Horvat about the need of the Internal Market as the solution of the Coronavirus crisis and to protect Europe’s consumers. The letter underlines how a scattered and diverging approach between Member States would not be the right response to the COVID-19 outbreak, and calls for an immediate coordinated approach. In particular, the letter stresses that unilateral restrictions to the free movement of goods adopted by Member States could jeopardize the supply and distribution of goods and dramatically affect Europe’s capacity to manage the current crisis. Free movement of goods is thus indispensable in order to prevent the shortage and to improve cooperation at EU level. More information, including the letter, can be found here.
EU watchdog launched probe into fake coronavirus goods
The EU anti-fraud agency OLAF has started an inquiry into imports of fake goods that are related to the coronavirus. It concerns fake goods such as masks, medical devices, disinfectants, sanitizers and test kits. The anti-fraud office claims it has evidence that “counterfeit products enter Europe through online sales and are brought into our homes via postal or courier services”. OLAF stresses that preventing these fake products from entering the European market is essential to protect our health and fight effectively against the coronavirus.
P2B regulation: Status of the ranking transparency guidelines
In the context of the Platform-to-Business Regulation (EU) 2019/1150, the European Commission is tasked with producing guidelines to help online intermediation services and online search engines understand their obligations to set out, in their terms and conditions, the main parameters determining ranking and the reasons for their relative importance. Ecommerce Europe participated in the workshops organized by the Commission in the previous months. These workshops were supposed to gather stakeholders’ feedback on the upcoming guidelines. The Commission will still continue to process the stakeholders’ feedback in order to finalize the guidelines before they will be published by the end of April 2020, only a couple of months prior to the entering into application of the Regulation, scheduled for 12 July 2020. Ecommerce Europe will continue providing feedback accordingly. More information, including minutes of the previous workshops, can be found on the Commission’s website here.
Universal Postal Union publishes new E-commerce Guide
The Universal Postal Union has published a new E-commerce Guide that emphasizes the important of mobile technology in e-commerce growth. According to the guide, mobile online shopping has grown exponentially since UPU’s Postal E-Services Survey in 2012. In the US, 79% of mobile phone users have bought online using their phone in the last six months. The Guide charts expansion of mobile phone applications among postal operators globally. Furthermore, the Guide sets out the UPU’s capacity building and technical assistance to Posts to help them succeed in the e-commerce market.
European Court of Auditors examines EU’s efforts to tackle spread of disinformation
On 17 March, the European Court of Auditors (ECA) has started an audit to examine the Union’s efforts to fight the spread of verifiably false or misleading information for the purposes of economic gain or intentionally deceiving the public. The audit will examine the EU action plan against disinformation looking at its relevance, the results achieved and its accountability framework. The European External Action Service (EEAS) StratCom task forces’ capacity to tackle disinformation will be examined as well. Baudilio Tomé Muguruza, the ECA Member leading the audit stated that “EU citizens must know whether the EU Action Plan against disinformation is effective”.
Launch of Ecommerce Europe Info Center on coronavirus and e-commerce
On 16 March, Ecommerce Europe has launched an Info Center on the impact of the corona virus COVID-19 on the e-commerce sector in Europe. The Info Center, which is publicly accessible at this website, displays an overview of EU information and initiatives as well relevant publications from national e-commerce associations and companies across the EU, to show how the different members are dealing with the impact of the coronavirus on online retail. This website will be updated by the Brussels Secretariat on a regular basis, depending on the amount of publications our members will share with us. In case you would like to contribute and for any questions, please reach out to Maike Jansen at maikejansen@ecommerce-europe.
Ecommerce Europe also published a detailed article on the impact of the virus, which is available here.
European Commission publishes new package of strategies
European Commission publishes study on the application of Interchange Fees Regulation
EP IMCO Committee publishes draft opinion on AI in education, culture and the audiovisual sector
The Committee for Internal Market and Consumer Protection (IMCO) of the European Parliament has issued its Draft Opinion for the Committee on Culture and Education (CULT), in which it calls on the CULT Committee to incorporate some changes into its report. The IMCO Committee underlines the unreliability of the current automated means of removing illegal content from online platforms on which audiovisual content is shared. It therefore wants a ban on generalized moderation and automated content filters. Moreover, the committee calls for recommendation algorithms and personalized marketing to be transparent in order to give consumers insights into these processes and ensure that these personalized services are not discriminatory. Finally, the IMCO Committee stresses the need to guarantee and properly implement the right of users to opt out from recommended and personalized services.
EP Committee on Culture and Education releases its opinion on the Digital Services Act
The European Parliament’s Committee on Culture and Education (CULT) released its Draft Opinion for the Committee on the Internal Market and Consumer Protection on the law on digital services (DSA). The CULT Committee considers it necessary to adopt uniform, Union-wide rules to combat hatred and disinformation and to protect children and youth as well as rules governing online advertising and fair e-commerce. It also calls on platform operators not only to immediately delete illegal content after positive identification, but also to continuously transmit it to the law enforcement authorities for further prosecution. The CULT Committee emphasizes that open, network and technology-neutral access to the internet must be particularly protected by law.
New US law could make e-commerce marketplaces liable for counterfeits sold on their platforms
A new US bill, the Shop Safe Act 2020, unveiled on 2 March, outlines steps that e-commerce platforms would have to take to prevent the sale of counterfeits third-party sellers sold on their platforms. The bill proposes e-commerce companies that fail to take these steps can be held liable for the sale of counterfeits, a move that would shift burden onto the marketplaces. In January, the US Department of Homeland Security released a report saying e-commerce companies need to do more to fight fake goods on their sites in order to protect American consumers and businesses. More information can be found here.
Ecommerce Europe joined industry initiative on mandatory product information and digital means
Ecommerce Europe cosigned a letter, dated 3 March 2020, together with other organizations representing a broad number of consumer-facing industry sectors to draw the European Commission’s attention to the opportunities that digitalization can bring to the European Union, notably regarding mandatory product information, for the joint benefit of citizens and businesses across the EU. The letter calls for further action and leadership from the European Commission to make Europe fit for the digital age. The letter also encourages the Commission to establish a European Stakeholders Forum for Digital Consumer Information to facilitate the regular exchange of views and best practices and the development of guiding principles for the digitalization of consumer and product information. Moreover, the Commission is asked to investigate where opportunities exist for digital means as a legally recognized option to provide mandatory product information and adapt the relevant EU regulatory framework including general product and consumer legislations. More information can be found in the letter.
EP ECON Committee published final report on competition policy
On 25 February, the European Parliament Committee for Economic and Monetary Affairs (ECON) has published its Annual Report 2019 on Competition Policy. The report focuses on six topics being the role of competition law in globalized markets, adapting competition to the digital age, effectiveness of competition policy instruments, competition rules supporting the European Green Deal, sectoral policies and a better focus on citizens through the European Parliament. The ECON Committee wants the Commission to focus on strategic sectors in its industrial strategy. When it comes to digitization the committee want the Commission to take data into consideration when assessing mergers. The report also raises the question of gatekeepers, systemic operators and self-preferencing. Finally, the committee wants the Commission to assess more demanding data access regimes and to unbundle search engines from their service activities.
European Commission considers five policy options for Digital Services Act
The European Commission is considering five policy options to regulate online platforms, according to EU press. Option 1 is enforcement and would focus on the application of the Platform-to-Business Regulation, the enforcement of the e-Commerce Directive (ECD) and other codes of conduct. Option 2 also focuses on enforcement but would add legislation regulating platforms’ responsibilities and establish mandatory procedures. Option 3 would be a wider legal intervention that would update and modernize the ECD whilst maintaining the country of origin principle, the liability regime and the prohibition of general monitoring obligations. Option 4 would entail the creation of an effective regulatory oversight system with transparency obligations and cooperation schemes across EU member states. Finally, option 5 is ex ante regulatory intervention that would go hand in hand with competition law. This intervention would focus on horizontal issues such as data sharing, interoperability and digital identity services of platforms with significant market power. These options can be cumulative. The consultation on the DSA, expected to be published by the end of March, will focus on several areas: the completion of the Digital Single Market, online safety of users, the upgrade in the liability regime of digital services, the framing of market power of online platforms, the degree of transparency and needed regulatory oversight, innovation for digital services and, finally, the emerging challenges in the global digital economy. The DSA’s impact assessment is expected in the second half of 2020.
Opening up of the Universal Postal Union decided in principle
During the Universal Postal Union (UPU) Council of Administration (CA) plenary, the potential opening up of the UPU to wider postal stakeholders was on the agenda. The CA decided in principle the UPU will have to open up to wider stakeholders. The UPU created a taskforce in October 2019 that conducted a comprehensive report, including the questionnaires of four important stakeholder groups (governments, regulators, designated operations, wider stakeholders). All four groups indicated that they are in favor of the opening up of the UPU to wider stakeholders. This decision in principle still leaves some questions unanswered. The what, how and when of the opening up of the UPU will only be answered at the 27th UPU Congress that takes place in August 2020.
Reynders states that European Commission will address safety in online sales
Commissioner for Justice, Didier Reynders, stated that the European Commission is planning to address the safety in online sales in the new Consumer Agenda and in the revision of the General Product Safety Directive. Reynders said this as a response to last week’s report stating that two-thirds of products bought from popular online shops does not comply with EU safety rules. Reynders will present the new Consumer Agenda at the end of this year. Reynders also stated that the Commission is “already working on the evaluation and revision of the General Product Safety Directive, which will assess, among others, product safety challenges related to online sales”.
EDPB adopts its contribution to the evaluation of the GDPR under Article 97
On 18 February, the European Data Protection Board adopted its contribution to the evaluation of the GDPR under Article 97. The EDPB states that the application of the GDPR in this first year and a half has been successful and that GDPR has strengthened data protection as a fundamental right and harmonized the interpretation of data protection principles. The EDPB emphasizes that the GDPR is a technologically neutral framework designed to be comprehensive and to foster innovation as well as that it is fully applicable to emerging technologies. In conclusion, the EDPB takes a positive view of the implementation of the GDPR and is of the opinion that it is premature to revise the legislative text at this point in time. Rather than revising the GDPR itself, the EDPB calls upon the EU legislators, in particular the European Commission, to intensify efforts towards the adoption of an ePrivacy Regulation to complete the EU framework for data protection and confidentiality of communications.
EDPS warns: ‘Prepare for all eventualities’ on UK-EU data transfers
The European Data Protection Supervisor warned that securing an EU-UK adequacy agreement on post-Brexit data transfers could face a series of obstacles. For that reason, the EDPS recommends that the Union takes steps to prepare for all eventualities, including where the adequacy decision(s) could not be adopted within the transition period, where no adequacy decision would be adopted at all, or where it would be adopted only in relation to some areas. The steps to adopt an adequacy agreement involve a period of assessment followed by a draft decision by the Commission, an opinion by the European Data Protection Board and a final approval by member states as well as the College of Commissioners. Read more here.
Croatian Presidency tries to bring ePrivacy closer to GDPR (with limitations)
European Commission’s new leaked draft on the Circular Economy Action Plan
European Commission’s new leaked draft on the Circular Economy Action Plan
Communication on a European strategy for Data published by European Commission
White Paper on Artificial Intelligence and report on safety and liability implications of new technologies
New version of EU Data Strategy has leaked
Thierry Breton thinks Europe can win global battle for industrial data
UPU High-Level Forum: ,,We are open to dialogue”
Europe urges G20 to make global digital tax priority of 2020
Leaked draft Communication 'Europe fit for the digital age'
Ecommerce Europe has acquired a draft version of the upcoming European Commission’s Communication on a 'Europe fit for the digital age', which can be found here in its entirety. It will be accompanied by the Commission’s AI White Paper and the Data Strategy. The strategy is currently based on four pillars:
- Technology that works for people;
- A fair and competitive digital economy;
- A digital and sustainable society;
- International dimension.
The most relevant actions that the Commission has planned for the e-commerce sector are the Revision of eIDAS Regulation (Q4 2020), the Digital taxation initiative (TBC) and, as expected, the Digital Services Act Package (Q4 2020).
Prime Minister Johnson: UK will diverge from EU data protection rules
On 3 February, UK Prime Minister Boris Johnson has said the UK is planning on diverging from EU data protection rules and will introduce their own 'sovereign' rules on data protection. This statement was done despite the EU claiming that the UK should respect EU data protection regulation. The European Commission has previously announced it will start an assessment for an adequacy agreement between the EU and the UK as of 1 February. An adequacy agreement requires an assessment by the Commission, a draft decision, an opinion by the European Data Protection Board and finally approval by the Member States and College of Commissioners.
OECD organizes webcast on Pillar 1 and Pillar 2 proposals of digital taxation system
The Organization of Economic Cooperation and Development (OECD) organizes a webcast with experts on the analysis and impact assessment of the pillar 1 and pillar 2 proposals for the establishment of an international digital taxation system. Pillar 1 concerns future rules establishing how digital activities that are undertaken without physical presence will be taxed. Pillar 2 is meant to ensure that only a minimum level of taxation is introduced. Experts from the OECD?s Centre for Tax Policy and Administration and Economics Department will reflect on the revenue and investment effects of the proposals. Registrations are open until 13 February.
EDPB’s annual survey on its activities: deadline extended
The European Data Protection Board (EDPB) launched a short survey as part of the annual review of its activities under article 71 of the General Data Protection Regulation. The questions concern the practical application of the guidelines, recommendations, best practices adopted by the EDPB and, if applicable, binding decisions adopted as part of the EDPB’s dispute resolution process. The deadline to complete the stakeholder survey has been extended until Friday 21 February, 18.00 CET. Ecommerce Europe, which is replying to the relevant EDPB consultations on GDPR, will provide a contribution to the survey. The survey seeks to gather views of individual entities (companies and non-profits) and sectoral organisations (trade associations) across various industries. We would be thankful if you could share the consultation with your members for their direct input.
Ecommerce Europe calls on members to share the survey on the Geo-blocking Regulation
Ecommerce Europe recently launched a survey on the Geo-blocking Regulation (EU) 2018/302. We are now kindly requesting the support of National Associations in disseminating the survey among their company members. Company Members wishing to contribute to the survey can do so directly. The objective of the survey is to understand the impact that the Geo-blocking Regulation has had on e-commerce businesses since its application. The target is B2C digital retailers selling goods and/or services and the deadline is 25 February. The available languages are English, Danish, German, French, Italian, Dutch and Greek. Please note that the survey is not publicly available, so please do not publish the link on social media / websites, as we want to keep the survey within the Ecommerce Europe membership network.
European Commission Work Program 2020
Last Wednesday, the European Commission published its Work Program for 2020. Ecommerce Europe has made an analysis of the work program, please find the main points outlined below.
During the first quarter of 2020, the Commission will not only publish a Strategy for Europe – Fit for the Digital Age, but it will also put forward a White Paper on Artificial Intelligence (AI) (of which we have already seen a leak) and a Circular Economy Action Plan (of which we also obtained a leaked version). In the second quarter the Commission will publish a report on the application of the GDPR and update the Digital Education Action Plan to improve digital literacy and investment. In the third quarter, the Commission will present an Action Plan on FinTech including a Strategy on an integrated EU Payments Market, an initiative on Crypto Assets and a legislative proposal on a Customs Single Window. Finally, in the last quarter of 2020, the Commission will give a legislative follow-up of the White Paper on AI, including safety, liability, fundamental rights and data. Moreover, the Commission will propose a new Digital Services Act that reinforces the single market for digital services and helps smaller businesses with the legal clarity and a level playing field. The Commission will also prose a non-legislative Consumers Agenda in this period. Finally, in the field of taxation, the European Commission considers new rules on tax evasion and digital taxation. This includes a ,,Communication on Business Taxation for the 21st century” and an action plan to fight tax evasion and make taxation simple and easy in the second quarter of 2020.
EU Industrial Strategy has been leaked
On 28 January, a draft version of the EU Industrial Strategy has been leaked from the European Commission. The official strategy is expected to be published in March. The Industrial Strategy contains the building blocks for a transition to a sustainable and digital EU industry. In the field of sustainability, the strategy mentions the Circular Economy Action Plan (content from leaked version below). The Ecommerce Europe sustainability working group follows this with special attention. In the field of digital policy, the strategy announces that the 2016 Digitizing European Industry initiative will be reviewed. Furthermore, the Commission will evaluate and review EU competition rules, ensuring that competition rules allow European companies to compete globally. Finally, as already mentioned in the work program, the Commission will propose a regulatory framework on AI, that promotes innovation through AI, whilst ensuring that the fundamental values of the EU are respected.
EU Circular Economy Action Plan has leaked
On 28 January, Ecommerce Europe obtained a leaked version of the Commission’s Circular Economy Action Plan, which is originally planned for publication in March 2020. The Action Plan explains the Commission’s circular economy ambitions and outlines the regulatory actions planned to achieve them. On production and consumption, the Commission plans to introduce a Sustainable Product Framework in 2021 targeting priority products with high impact. Of particular relevance for the e-Commerce sector will be the new ”Right to Repair” in EU Consumer law, which is already expected for 2020 and sets out to assure consumers of the availability of spare parts and repair manuals, high-quality and affordable repair services, easiness to disassemble product components and access to product consumables. In terms of waste, the Commissions aims to review the Packaging and Packaging waste Directive and assess the feasibility of establishing an EU harmonized model for separate collection of waste. To enable circularity in value chains or specific sectors, the Commission will come with an EU Strategy for textiles and look at an EU-wide reward system to return or sell back. Regarding green mobility, a new regulatory framework setting sustainability requirements for rechargeable batteries in electromobility will be adopted. Finally, the Action Plan stresses the importance of the European Circular Economy Stakeholder Platform and the intention to come with measures to improve the performance of EPR schemes.
Ecommerce Europe participated in the European Consumer Summit 2020
Ecommerce Europe attended the European Consumer Summit, which took place in Brussels on 30-31 January. The Summit brings together up to 500 stakeholders involved in shaping the future EU’s consumer policy. Justice Commissioner Didier Reynders, who opened the event, explained that, by the end of this year, the Commission will publish a new Consumer Agenda. The focus would be not just on protecting consumers but also empowering them. This would include ensuring that the proposed Collective Redress Directive will be passed quickly, and Reynders is working hard to have it adopted by mid-2020. Overall, the Commission’s priorities in this space will be ”human-centric” digitalization and addressing climate change. Reynders added that we could expect a focus on online fairness. He noted that every consumer who goes into a physical shop will receive the same products and prices, but different consumers may be offered different prices and even service levels when transacting online. The Commission’s starting point, he said, is that consumers should enjoy at least the same level of protection when shopping online as offline. The Commission will also work on an update to the General Product Safety Directive to deal with emerging technologies and the increase of online shopping. This would be discussed further in the new Commission’s AI White Paper. With regards to the Green Deal, the focus would, he said, be on empowering consumers who want to make more sustainable choices and to fight climate change. The Commission will look at tougher rules on false environmental claims, encouraging longer lifespans for consumer products, combatting planned obsolescence of products and encouraging their re-use.
France’s privacy watchdog launched public consultation on its draft Recommendation on cookies
CNIL, France’s data protection authority, has recently published a draft recommendation concerning practical methods of obtaining Internet users? consent for operators using online tracking tools. The draft guidelines are part of an action plan to help better protect users' privacy against the unjustified use of their data. CNIL declared that online profiling for advertising purposes ”can be massive and perceived as intrusive”. CNIL mentioned it has received numerous individual and collective complaints relating to online marketing and stated that its mission is to deal with these complaints and, more generally, to ensure the proper application of the legal texts by combining professional support tools (such as its guidelines and the draft recommendation) and the recourse, if necessary, to its powers of investigation. Companies have until 25 February 2020 to comment on the draft, which will then be finalized and lead to a six-month period for companies to adapt to the new measures. More information (in French) can be found here.
Ecommerce Europe contributed to a consultation on the Roadmap for the Circular Economy Action Plan
On 20 January, Ecommerce Europe contributed to a consultation of the Roadmap of the Circular Economy Action Plan. In March 2020, the European Commission announced that it will adopt a Circular Economy Action plan. The Action Plan will help to modernize the EU’s economy and stimulate the development of lead markets for climate neutral and circular products. Ahead of the publication of the Communication, the European Commission published a Roadmap outlining the issues at stake, and the objectives of the future Communication. The Commission uses roadmaps to define the scope of new policies or plans, describe the problem and explain why EU action is required. The roadmap explains that the action plan aims to speed up the transition towards a circular economy. To achieve this, it will: include a sustainable products policy, include measures to empower consumers to contribute to the circular economy, help reduce waste generation and support the modernization of certain waste laws, foster a well-functioning and integrated internal market for secondary raw materials to ensure that they are safe, competitively priced and reliable, identify actions to address high-impact sector and seek to build European leadership at global level by working closely with key global partners. Ecommerce Europe?s feedback presents the key principles that will be further developed in its Sustainability Working Group. To get a copy of the contribution, please contact Juliette Beaulaton (juliettebeaulaton@ecommerce-
Commission’s White Paper on Artificial Intelligence has leaked
A Commission draft White Paper on Artificial Intelligence (AI) has leaked. The Commission paper gives insight into proposals for a European approach to AI. The draft presents five options for different regulatory branches: voluntary labelling, sectorial requirements for public administration and facial recognition, mandatory risk-based requirements for high-risk applications, safety and liability, and governance. The labelling would offer developers the change to commit to ethical and trustworthy AI. The Commission considers time-limited ban on facial recognition in public spaces. Moreover, AI will have to deal with GDPR provisions, giving citizens ?the right not to be subject of a decision based solely on automated processing, including profiling?. The third field in which regulation will be introduced, will feature binding instrument only applicable to ?high-risk applications? of AI. In the field of liability and safety rules, changes might be made to EU safety and liability legislation in the field of product safety, radio equipment and product liability. Finally, with regards to governance, the Commission foresees an effective enforcement system with public oversight with the help of national authorities. The US has also presented a draft guidance on ten ”Principles for the Stewardship of AI Applications.” The approach by the US also has a strong focus on managing risks and maintaining security.
Brussels' conference on the Digital Services Act in March 2020
On 24 March 2020, ForumEurope is organizing a Conference on the Digital Services Act: ?A new rulebook for the digital economy??. The keynote speaker at the conference will be the Danish Executive Vice-President ?A Europe Fit for the Digital Age? of the European Commission, Margrethe Vestager. The registration has opened hereand more information will become available soon on the website of the event, which will take place in Brussels.
Croatian Presidency Working Paper outlines priorities
A working paper of the Croatian Presidency of the Council of the EU shows that the Council will work on during the first semester of 2020. The Croats are still planning on continuing the negotiations on new ePrivacy legislation and they want to close this file during their Presidency. The Civil Liberties Committee (LIBE) of the European Parliament has scheduled a one-hour presentation of Croatia on the continuation of the ePrivacy proposal on 21 January at 15h30. Apart from e-Privacy, the Presidency will support the European Commission in its work on AI and the Digital Services Act.
Breton: EU ready to act on digital tax, if OECD fails
European Commissioner for Internal Market, Thierry Breton, said on 20 January that the European Union will take action if discussions at the OECD level on the digital services tax for big tech companies do not lead to an agreement. Breton also noted that EU countries which failed to agree on a tax in an earlier stage, are now on the same line.
European Parliament to hold a hearing on Product Liability Directive and the Digital Single Market
The Parliament’s Committee on the Internal Market and Consumer Protection (IMCO) will hold a public hearing on the Product Liability Directive and on protecting consumers in the Digital Single Market. The event will take place in the EP on 22 January 2020 from 14h30 to 16h30. The aim of the discussion is to hear the views of stakeholders and academia on the need to review the Product Liability Directive and on related challenges in the new digital age. It would allow participants to present their views on whether the overall liability regime is adequate to facilitate the uptake of the new technologies, and to address the matter from different perspectives. It will also offer the opportunity to hear the Commission?s conclusions of its evaluation work and results achieved in the Expert group on liability and new technologies together with a presentation of further plans in this regard. Ecommerce Europe will follow the debate and report back to members accordingly. More information can be found here.
Europe urged to use industrial data
European Commissioner for Internal Market, Thierry Breton, has stated during an interview with Financial Times that Europe has to help its companies to do more with industrial data to help them stave off competition from the US and China. These plans are part of the EU?s ambition to achieve ”digital sovereignty” over America. Part of this is to be harsher on non-EU internet companies. Breton considers revising the EU?s e-Commerce Directive, which has not been changed in 20 years. Breton states that the Directive has to adapt to some fears, complaints from governments, citizens for the responsibility of platforms with regards to illegal and inappropriate content. Breton concludes stating that ,,big companies cannot say it is not my fault or it is not my responsibility”.
CEN/TC331 blocks standardization efforts on Electronic Advanced Data requirement for customs and security
National standardization authorities sitting in the European Committee for Standardization (CEN)’s Technical Body on Postal Services (CEN/TC 331) blocked an agreement on activating standardization for electronic advanced data (EAD) systems for customs and transport security. Standardization work is integral to the EU VAT E-commerce Package, which is mandated by DG GROW to CEN/TC331. As a result, the existing mandate to CEN/TC331 is in danger of failing. CEN/TC331 and the European Commission need to explore alternative routes to make the work done available to the wider postal sector players For more information, please consult the full report or contact our e-Logistics Expert Walter Trezek (firstname.lastname@example.org).
Tech companies urge EU not to hold them liable for illegal content
Big tech companies such as Google, Facebook and Twitter have accepted that removing illegal and harmful activity might require a new oversight body ahead of a new Digital Services Act, but they do not want to be held liable for all illegal content on their platforms. Until present, the EU allowed platforms to regulate themselves for illegal material in everything except content related to terrorism. Thierry Breton, the Commissioner overseeing digital economy has said during his confirmation hearing that he will not give in on the liability of tech companies. Senior officials have said that the process of concluding the DSA is very unpredictable and can still take a long time to come to an agreement.
European Parliament confirms negotiating position on Collective Redress
On 9 January, the Legal Affairs Committee of the European Parliament confirmed the Parliament?s position on collective redress. Following the confirmation, MEPs can now start the negotiations on the final shape of the legislation with the Council, which had already previously adopted its general approach. The Representative Action Directive is part of the New Deal for Consumers, and aims to ensure stronger consumer protection in the EU. The proposed rules allow consumer organizations, or other eligible entities, to pursue collective actions, and according to the European Parliament ?enforce a high level of protection and to represent the collective interest of consumers?. The Parliament?s position introduces the ?loser pays principle?, ensuring that the losing party reimburses the winning party?s legal costs, to avoid abusive use of the new instrument. The next step will be the trialogue negotiations. Both technical and political trialogues are already scheduled to take place in January.
Ecommerce Europe meets Commission President Ursula von der Leyen?s digital adviser
On 23 January, Ecommerce Europe will meet Commission President Ursula von der Leyen?s digital adviser, Antony Whelan. His responsibilities include the Digital Society and Economy, the Digital Single Market, the Internal Market, Industry, Entrepreneurship & SMEs, Research and Innovation and Competition. Mr. Whelan is also the contact point for the Executive Vice-President for Europe fit for the Digital Age, Margrethe Vestager. With the meeting, Ecommerce Europe sets out to discuss the priorities of the Commission?s current mandate, the challenges for the e-Commerce sector and exchange views on ongoing and new policy files. From Ecommerce Europe, Luca Cassetti, Director of Public Affairs, Léon Mölenberg, Senior Policy Advisor and Marc Lolivier, Vice-President of Public affairs at Ecommerce Europe and Director General of the French Federation of e-commerce and distance selling (FEVAD), will attend the meeting.
The US and France seek tax compromise to avoid French sanctions
Steven Mnuchin, the US Treasury Secretary, and French Finance Minister Le Mairespoke to each other on 7 January and agreed to increase their efforts to reach a compromise on their tax conflict. France introduced a digital tax of 3% on the revenue made by tech companies such as Google, Apple, Facebook and Amazon. The US argued that these measures are discriminatory and therefore responded with a measure that would affect 2.4 billion dollars of French products such as wine, cheese and makeup. Both leaders agreed to try and reach an agreement within 15 days.
On the same day, the European Commissioner for Trade, Phil Hogan, has met with the French Economy Minister Bruno Le Maire, to discuss an action plan for possible US sanctions. The US has threatened with a 100% tariff on French luxury products after government investigation found the French tax discriminates against American technology companies. Hogan will also talk to Le Maire?s American counterpart next week. The Organization for Economic Cooperation and Development is developing a global digital services tax, something big tech companies desire themselves as they will not have to adapt to many different fiscal systems across the globe.
Omnibus Directive officially entered into force
On 7 January, new rules on better enforcement and modernization (also known as the Omnibus Directive) of the current EU consumer rules entered into force. The rules are part of the Commission?s New Deal for Consumers. The rules set out to create more transparency of online marketplaces by making it clearer whether products are sold by an individual or a trader. In addition, the submission of fake reviews or endorsements will be prohibited. Important for the e-commerce sector, is the clause on price reductions. According the Directive, sellers will no longer be allowed to have what the Commission calls ?fake price reductions?. This means that sellers will have to indicate for every price reduction, as a reference price the lowest price applied within a period of at least 30 days preceding the price reduction announcement. Ecommerce Europe is organizing a meeting with the Commission?s DG GROW to further discuss our concerns on these new rules and invited other EU industry stakeholders to meet on 16 January to coordinate our action at EU level. Although the rules have entered into force now, in practice, from adoption, member states have 24 months to adopt the measures necessary for its implementation. These measures will start to apply 6 months later.
Ecommerce Europe members invited to participate in consultation on cryptocurrency in the EU
The European Commission is exploring ways to address the challenges created by the emergence of crypto-assets such as bitcoin and the effect these new technologies will have on how financial assets are issued, exchanged, shared and accessed. It has begun the impact assessment process to assess if new legislation is needed in this field. The Commission has opened two consultation procedures. The first is to collect Feedback on the Inception Impact Assessment on a Directive/regulation establishing a European framework for markets in crypto-assets. The Inception Impact Assessment is a concise preliminary document highlighting the context, issues that are meant to be tackled, possible policy options and a preliminary impact assessment. The European Commission is seeking feedback on the content of the Inception Impact Assessment, to feed into the broader impact assessment process. The deadline is 16 January 2020. The second is a Public consultation on EU framework for markets in crypto-assets has been opened to clarify various aspects of the use of crypto-assets and the current regulatory framework and invite stakeholders to express their views on the best way to enable the development of a sustainable ecosystem for crypto-assets. The deadline for this consultation is 12 March 2020.
European Data Protection Supervisor publishes its preliminary opinion on data protection and scientific research
The European Data Protection Supervisor (EDPS) has published its preliminary opinion on data protection and scientific research. When scientific research involves personal data processing (e.g. medical research), it falls under the General Data Protection Regulation and other relevant applicable rules. The EDPS acknowledges that there are two camps: one claiming that the GDPR offers too much flexibility and another believing that it limits the innovative aspect of research. Therefore, the EDPS advises to have further discussions between data protection authorities and ethical review boards in order to find out which research activities are deemed as genuine research. Furthermore, the EDPS recommends EU codes of conduct for scientific research, closer alignment between EU research framework programs and data protection standards, and to initiate a debate on the circumstances in which access by researchers to data held by private companies can be based on public interest.
The digital commerce sector is at a turning point. Now more than ever, the decision taken by EU policymakers will determine the success of European e- retailers globally.
What makes an e-retailer competitive in a global market is profoundly changing. Businesses have to operate in a globalized business environment where a company’s competitive edge depends on access to new technologies, data, the capacity to operate efficiently cross-border and to adapt rapidly to evolving consumer behavior.
Catching up with the growth of digital commerce and the pace of innovation in other markets, especially Asia Pacific and North America, will require strong political will to achieve a harmonized, borderless Digital Single Market, and equally important, a global level-playing field. EU policymakers need to seize the opportunity of the new upcoming mandate in the European Institutions to build a strong political vision for digital commerce.
A major challenge for the European e-commerce sector is the lack of a European and ultimately global level-playing field, with possible unfair competition from players often based outside the European Union. E- commerce does not stop at the border of the European Union, it is a global phenomenon. Hence the EU should continue working towards a global regulatory level-playing field for e-commerce.
For an overview of the latest e-commerce related news from Brussels, please have a look at the following attachment: Ecommerce Europe Monitoring 10-07 to 16-07.
This week, Ecommerce Europe will be meeting with several EU policymakers to discuss two important proposals: the New Deal for Consumers and the Platform-to-Business relations (P2B). In particular, on 18-19 and 23 July, Ecommerce Europe will meet with the Permanent Representations of Luxembourg, Ireland, Bulgaria and Belgium. Furthermore, Ecommerce Europe will meet with:
Mr. Eric Peters, from the Cabinet of Commissioner Mariya Gabriel;
Representatives of the European Commission’s Directorate General in charge of the New Deal for Consumers (DG JUST);
Mr. Werner Stengg, Head of Unit „E-commerce and online platforms” of the European Commission’s Directorate General in harge of the Proposal on Platform-to-Business relations (DG CONNECT);
The assistant of the Shadow Rapporteur for the one of the two proposals of the New Deal for Consumers in the European Parliament, MEP Jasenk Selimovic.
Furthermore, this week the team will keep performing public affairs and lobbying activities, focusing mainly on the Digital Services Tax, New Deal for Consumers and Platform-to-Business relations.
Please see below the policy highlights of the past week:
EU Commission and EU consumer authorities push Airbnb to comply with EU consumer rules
The European Commission and EU consumer authorities are calling on Airbnb to align their terms and conditions with EU consumer rules and be transparent on their presentation of prices. Commissioner Jourová declared today that: „More and more consumers book their holiday accommodation online and this sector has brought many new opportunities to holidaymakers. But popularity cannot be an excuse for not complying with EU consumer rules. Consumers must easily understand what for and how much they are expected to pay for the services and have fair rules e.g. on cancellation of the accommodation by the owner?. The Commissioner expects Airbnb to follow up swiftly with the right solutions. In particular, the Commission believes that Airbnb’s current pricing presentation and a number of its terms do not comply with the Unfair Commercial Practices Directive, the Unfair Contract Terms Directive, and the Regulation on the jurisdiction in civil and commercial matters. Therefore, the European consumer authorities and the Commission have demanded from Airbnb a number of changes. Airbnb has until the end of August to present their proposals. Once Airbnb proposes its solutions, the Commission and the EU consumer authorities will evaluate them and, if they are not considered satisfactory, Airbnb could face an enforcement action.
Austrian Presidency of the Council publishes a revised text of the ePrivacy Regulation
On 10 July, the Austrian Presidency of the Council of the EU released a revised text of the Proposal for a Regulation on Privacy, focusing on Permitted processing, Protection of end-users' terminal equipment information and Privacy settings, which are respectively covered by articles 6, 8 and 10 (and the related recitals). This text will be considered by the national delegations in view of the discussion in the Working Party on Telecommunications and Information Society (WP TELE), which will take place on 17 July. In Article 6, the Presidency introduced a possibility for further compatible processing of electronic communications metadata. Furthermore, additional safeguards for the protection of citizen?s data have been included. Regarding Article 8, no amendments were introduced. However, further details on conditional access to website content have been provided. Regarding Article 10, on privacy settings, the Presidency announced that it would like to discuss the possibility of deleting the article from the regulation and its respective recitals.
MEP Gebhardt reports back to the EU Parliament on the negotiations regarding contracts for the supply of digital content
On 11 July, the Rapporteur for the Proposal for a Digital Content Directive, MEP Gebhardt, reported back to the IMCO Committee of the European Parliament on the state of play of the interinstitutional negotiations on this legislative file. She warned that there were difficulties with the Council in reaching an agreement and that MEPs need to put pressure on the Council. Ms. Gebhardt stated that there are two outstanding issues: smart goods (goods with embedded digital content) and the level of harmonization. These issues could not be dealt with in technical meetings, as they are very political, so they will need to be discussed at trialogue level. She stressed that the Council has so far declined to include smart goods in the scope of the Digital Content Proposal, saying that they should be included in the Sales of Goods Proposal. The European Parliament, however, insists on the fact that smart goods are digital goods, at least as far as the digital component of these goods is concerned. Ms. Gebhardt said that this is creating a huge problem since the Council failed to come up with any common position on the Sales of Goods Proposal. She also expressed her fear that an agreement on this file will not be reached by the European elections in May next year.
MEP L?kkegaard reports back to the EU Parliament on negotiations regarding the Accessibility Act
On 11 July, the Rapporteur for the Proposal for a European Accessibility Act, MEP L?kkegaard, reported back to the IMCO Committee of the European Parliament on the state of play of the interinstitutional negotiations on this legislative file. Mr. L?kkegaard said that, during the last trialogue which took place on 10 July, all parties had confirmed their willingness and dedication to make progress on this file. Since the Council did not have an updated mandate, no specific movement on the most difficult topics was made. However, compromises were found on some technical issues. For instance, on enforcement, the European Parliament and the Council have similar approaches and they both seek to limit the possibility to end up with numerous litigations. The Parliament limits actions to people who have direct interest in the case and the Council to organizations that have received approval of the consumer to introduce a complaint on their behalf. Furthermore, the Parliament was supported for adding the proposal for alternative dispute resolution. The next trialogues will take place on 2 October and 8 November, with the hope to have the final result by then.
EU Parliament held a public hearing on consumer protection and the New Deal for Consumers
On 11 July, the IMCO Committee of the European Parliament held a public hearing on ?Better enforcement and modernisation of EU consumer protection rules?, in the context of the New Deal for Consumers. More specifically, during the hearing, participants discussed about a modification proposed by the Commission to the Consumer Rights Directive for a fairer right of withdrawal, in order to avoid abuses by consumers caused by over-use of goods that are returned to the trader. A representative from the University of Passau stated that, based on a survey they conducted, there were no sufficient data that would suggest there is a requirement to make changes to the right of withdrawal. This is because, according to her, the majority of SMEs stated they never faced disproportionate burden when accepting the return of unduly tested goods. Ecommerce Europe does not agree on the conclusions of this survey, and fully supports the Commission?s approach for an amended right of withdrawal, which would avoid consumers? abuses of such a right. Also other stakeholders stated that the ?limitation of the right of withdrawal is not the right approach? and that it should be deleted from the proposal. MEP Dalton, the IMCO Rapporteur for the Proposed Directive on better enforcement and modernisation of EU consumer protection rules, said that he plans to publish the draft report in the coming days, with a deadline for amendments in the IMCO Committee in September and, hopefully, a committee vote in November 2018, so that the trialogues could start in January 2019. He also said that the limitation to the right of withdrawal has little support in the European Parliament and that fines on turnover were too repressive. He also questioned the part of the legislation on online rankings because requirements to disclose product placement on shelves in offline stores do not exist. On the other hand, the European Commission has said that it fully stands behind the right of withdrawal, but that it believes that the current obligations pose an undue burden for retailers, which is perfectly in line with the position of Ecommerce Europe. Therefore, the Commission proposes simpler rules which would only impact a minority of consumers. Ecommerce Europe is meeting with EU policymakers to represent the interests of online merchants in this important discussion.
For an overview of the latest e-commerce related news from Brussels, please have a look at:Ecommerce Europe Monitoring 03-07 to 09-07.
This week, Ecommerce Europe will attend the official opening of the Austrian Presidency of the Council of the EU where the Austrian Federal Minister for the EU, Arts, Culture and Media, Gernot Blümel, will address the main priorities of the presidency.
Furthermore, this week the team will keep performing public affairs and lobbying activities, focusing mainly on the Digital Services Tax, New Deal for Consumers and Platform-to-Business relations.
Please see below the policy highlights of the past week:
Ecommerce Europe to meet legislators on New Deal for Consumers and Platform-to-Business relations
Last week, Ecommerce Europe published two new position papers, covering two important files: the Proposal for a Regulation on fairness and transparency in online platform trading and the Proposal for a Directive on better enforcement and modernization of EU consumer protection rules. The first Proposal was published by the European Commission in April 2018. Ecommerce Europe overall welcomed its publication. In particular, we appreciate and support the soft-touch and principle-based approach of the Commission. Online platforms, such as e-commerce marketplaces, are engines of growth. That is why we want this Regulation to struck the right balance between their interests and the interests of online merchants, especially SMEs that sell via marketplaces. Well balanced also in redress rights which, in our view, are best served by a transparent complaints-handling completed by a fair mediation system, however not by the proposed representative court action, which lacks the balance between collective redress and individual redress. The second Proposal is part of the New Deal for Consumers package, also presented in April 2018. In general, we agree with the Commission on the fact that EU Consumer Law is mostly already fit for purpose and need only some targeted adjustments. Some changes included in this proposal, for instance on the right of withdrawal, are likely to foster online sales, by removing current burdensome obligations on merchants. Nevertheless, we question some other adjustments that may ultimately harm businesses. We already sent our contributions to the EU legislators and we will already meet with some of them before the summer break. For more information, please download our position papers from this website.
The Digital Services Tax is a de facto tariff, according to PIIE
The Peterson Institute for International Economics published its policy brief on the European Commission?s Proposal introducing a (temporary) Digital Services Tax, claiming that it de facto acts as a prohibited tariff, under the WTO rules. These claims come from the Proposal?s high revenue thresholds and exclusion of certain revenues which would inevitably discriminate U.S. companies as opposed to the European ones. The policy brief warns that the U.S. could therefore decide to retaliate and sets out several possible U.S. retaliation responses to the DST. The PIIE policy brief is available here. Ecommerce Europe is actively lobbying for a global solution, at OECD level, since the taxation of the digital economy is a global issue.
The European Payment Retail Board published new documents stemming from the meeting on 18 June
As you may remember, on 18 June, Ecommerce Europe attended the 9th meeting of the European Payment Retail Board. The participants discussed – among other things – the new workplan of the ERPB for 2019 to 2021, that will be finalize during the next meeting in Autumn, as well as the work of the European Commission on ongoing files. The new workplan will likely include key topics for the ecommerce sector, such as e-Identity, fraud, obstacles to electronic payment or interoperability of point-of-interaction acceptance for instant payment. All the relevant documents of the meeting can now be found on the ERPB webpage.
This week in the EU Parliament: Accessibility Act, Digital Content Directive and EU consumer protection rules
On 11 July, the Rapporteur Morten L?kkegaard will report back to the Internal Market and Consumer Protection (IMCO) Committee on the state of the negotiations regarding the Accessibility Act. Likewise, the Rapporteur Evelyne Gebhardt is scheduled to report back to the committee on the discussions on contracts for the supply of digital content. Moreover, the IMCO Committee will hold a public hearing on ?Better enforcement and modernisation of EU consumer protection rules?, in the context of the package ?New Deal for Consumers?. Members and experts will discuss the post-REFIT proposal on the revision of consumer law. The hearing will also provide input for an IMCO implementation report on the same topic, to be elaborated later this year. The program and other details are available here. Ecommerce Europe will follow the discussions and will provide a summary in due time. In the meantime, Ecommerce Europe published it position paper on the New Deal for Consumers (Part I), which is available here.
First player to embrace European harmonized parcel label for more sustainable and efficient last-mile delivery
Eco2city is a Dutch non-governmental organization (NGO) that supports cities all over Europe in their effort to achieve efficient and zero emission city logistics. As part of this goal, Eco2city has become the first player in Europe to implement the European Harmonized Parcel Label, recognizing its ability to positively impact the future of last-mile delivery. Ecommerce Europe and GS1?s joint blue paper The Business Case for the Harmonized Parcel Label, states that ?E-commerce is fundamentally changing postal and parcel markets?. However, ?? the current parcel streams are ill-fitted to accommodate this?. The sharing of data between players involved in a delivery is crucial to improving the efficiency and sustainability of last mile delivery. The Harmonized Parcel Label and its globally unique parcel identifier will help answer the future demands of all stakeholders in the delivery service industry, including customers, manufacturers, retailers, integrators, e-fulfilment companies, carriers, parcel collection/return points and the government. As you may remember, in 2016-2017, Ecommerce Europe chaired a working group within the European Committee for Standardization (CEN) to deliver the harmonized standard for parcel labels. For more information, please read the press release of GS1 in Europe here.
For an overview of the latest e-commerce related news from Brussels, please have a look at:Ecommerce Europe Monitoring 26-06 to 02-07.
Today, Ecommerce Europe has launched the new European B2C Ecommerce Report 2018. The report gathers data collected and provides with e-commerce facts, figures and trend while offering great insights into European e-commerce markets, describing both the commercial opportunities, as well as various challenges. To download the report, please visit this website.
Furthermore, this week the team will keep performing public affairs and lobbying activities.
Please see below the policy highlights of the past week:
Ecommerce Europe sent a letter on the Digital Services Tax to the European Council ahead of their meeting on 28-29 June
Ecommerce Europe sent a letter on 25 June warning the European leaders that the proposed Digital Services Tax (DST) would have a negative impact on the EU economy, as it would harm European businesses, particularly SMEs. Ecommerce Europe expressed its concerns about the fact that the DST targets company revenues, not profits, and called the leaders to rather focus on working towards a global solution through the OECD. While not supporting the DST Proposal, Ecommerce Europe proposed a few suggestions on how to make it less problematic in case Member States agree to pursue that solution. Safeguards that take into account profitability, avoidance of double taxation and ensuring enforceability against non-EU companies are the three major suggestions on how to improve the DST Proposal. In addition, Ecommerce Europe recommended a sunset clause to be included in the Proposal which will ensure that it will indeed be an interim measure on the way to a new international solution. The letter is available here.
European Council meeting concludes: The Council should work forward on the Commission proposals on digital taxation
During their meeting on 28 and 29 June, the EU heads of state and government concluded that ensuring fair and effective taxation is a key priority. The leaders agreed that the fight against tax avoidance, evasion and fraud must be vigorously pursued both at global level (notably in the OECD) and within the EU. Moreover, they stressed that there is a real need to adapt the taxation systems to the digital era. Therefore, they called on the Council to take work forward on the Commission proposals on digital taxation. More information is available here.
European Commission and four online marketplaces sign a Product Safety Pledge to remove dangerous products
On 25 June, four major online marketplaces, Alibaba (for AliExpress), Amazon, eBay and Rakuten-France have signed a commitment for faster removal of dangerous products sold on their online marketplaces. The four major online companies have committed to responding to notifications on dangerous products from Member State authorities within 2 working days and take action on notices from customers within 5 working days. V?ra Jourová, EU Commissioner for Justice, Consumers and Gender Equality, welcomed this decision that will improve consumer safety and called on other online marketplaces to join the initiative. These four major online marketplaces have agreed to a series of commitments to ensure EU consumers are well protected. The online marketplaces and the European Commission will assess the progress made on the commitments every six months, publishing a report. The full press release is available here.
The Council of the EU agrees its negotiating stance on the Commission’s Proposal on Cross-border payments
On 27 June, EU ambassadors agreed the Council’s negotiating stance on the Commission’s proposal to make cross-border payments in euros cheaper across the EU. They asked the presidency to start negotiations with the European Parliament as soon as the Parliament is ready to negotiate. It was agreed that a euro transfer should never be subject to a disproportionately high fee, whether or not the consumer is based in the euro area. The Council endorsed the Commission’s proposal to align the charges for cross-border payments in euros for services such as credit transfers, card payments or cash withdrawals with the charges for corresponding national payments of the same value in the national currency of the Member State where the payment service provider of the payment service user is located. In addition, the proposal increases transparency requirements on the costs of currency conversion when such a service is offered before a payment transaction is carried out. Negotiations with the European Parliament will proceed as soon as the Parliament has agreed its stance. For more information, visit this link.
The Council of the EU sets VAT minimum standard rate permanently at 15%
On 22 June, the Council adopted a directive making the 15% minimum standard rate a permanent feature of a new VAT system. The minimum standard rate prevents excessive divergence in VAT rates in the member states. This eliminates the risk of distortions of competition through lower VAT rates that would have an impact on cross-border shopping and trade. More information is available here.
New Deal for Consumers: Plenary adoption planned for 22 November
On 20 July, MEP Daniel Dalton, the lead rapporteur of the IMCO Committee of the European Parliament, is expected to publish his draft report on one of the proposals of the New Deal for Consumers, which is modifying four main EU consumer directives. MEPs Pascal Arimont, Evelyne Gebhardt, Julia Reda and Marco Zullo have been appointed Shadow Rapporteurs. According to the new calendar, the IMCO Committee will discuss the report on 3 September and the deadline for tabling amendments is 18 September with the aim to adopt the legislation on 22 November, during the Plenary. Ecommerce Europe sent its position paper to the all relevant MEPs and has requested a meeting with them to further discuss Ecommerce Europe?s views on this important
For an overview of the latest e-commerce related news from Brussels, please have a look at the attachment: Ecommerce Europe Monitoring 19-06 to 25-06.
This week, the Ecommerce Europe team will be engaged in the following meetings:
On 27 June, Ecommerce Europe will meet with the Fiscal Attache of the Czech Republic Permanent Representation to the EU, Ms. Hana Stulajterova in order to discuss the position of the e-commerce industry with regard to the introduction of a Digital Services Tax.
On 28 June, Ecommerce Europe will attend EuroCommerce Working Group on ePrivacy and New Deal for Consumers. The Working Group will discuss the state of play of the two proposals, the next steps and the lobbying strategy.
Furthermore, the team will keep performing public affairs and lobbying activities.
Please see below the policy highlights of the past week:
The IMCO Committee holds a public hearing with industry representatives on addressing unfair trading practices in B2B relations in the online environment
On 19 June the Internal Market and Consumer Protection Committee held a public hearing with the members of the IMCO Committee, the European Commission and representatives from online platforms, the hotel industry and SMEs. Mr. Stengg, from the European Commission, briefly explained the proposed P2B Regulation and the main issues of friction between online platforms and their business users. Mr. Price (Google) expressed his concern with the proposed collective action process. Mr. Laurinkari (eBay) called for more flexibility to ensure platforms can efficiently run their business and to ensure the right balance between the needs of the consumers and the needs of businesses. Mr. Lochbihler (booking.com) said that there is a need to further clarify certain definitions in the proposal and that transparency requirements should apply to everyone who competes in the same field. Mr. de Barrin (HOTREC) gave three proposals for the improvement of the Regulation: ensuring that business owners can control their own brand, ensuring access to data of the guest and ensuring that the business user can control its own distribution. He also asked for an objective description of all types of sanctions and penalties applied to business users as well as for the Regulation to be revised every 2 years (not every 3 years as proposed). Ms. Bermejo (Spanish Association of start-ups and micro SMEs) warned that the scope of the Regulation was too wide, that it was hard for startups to constantly adapt to new legislation, that 15 days prior notice when terms and conditions change was too long and that Article 7 (point 2b) was not clear. The representative of Seznam expressed her opposition to the extension of the Regulation to search engines. Representative of Spotify warned that transparency alone doesn?t prevent unfairness and that the Regulation must include specific obligations not to engage in certain specific unfair practices. It should also include effective remedies to ensure compliance, she added. For the full video of the hearing please click on this link. The European Commission also reiterate that the Proposal should be adopted before the European elections next year.
Legal Affairs Committee: rapporteurs report back on the state of negotiations with the Council of the EU on the issue of contracts for the supply of digital content
On 20 June, the Rapporteurs of the Legal Affairs Committee, Mr. Voss and Ms. Gebhardt, reported back to the Committee on the state of negotiations with the Council of the EU on the issue of contracts for the supply of digital content. Mr. Voss stated there were two main points that remained open, causing a deadlock in the negotiations. The first one is the digital goods issue (or goods that combine software and hardware). The second one is the issue of harmonization in this area. The Council would like to see those software products included in the online trade provisions, but the European Parliament wants to ensure that goods with digital content are regulated in some way. Mr. Voss added that they had called upon on the Council to move forward on the Sales of Goods Directive so that some progress can be made by October to ensure that the Digital Contracts Proposals would not contradict each other The Parliament wants to ensure that all goods are covered, regardless of where they were bought (online or offline) and wants to see both packages negotiated in parallel. It asked the Council for suggestions to be tabled by October the latest, to wrap up on the file in February/March. Ms. Gebhardt warned that the Council had no position on the digital goods or on how these software-based goods would be incorporated. The Parliament wants embedded software included whereas some states openly oppose the Directive (e.g. Germany). She urged the Parliament not to give ground on this as it has already made concessions in other areas. She also said that it was unacceptable that there was no timetable for technical meetings or trialogues on these matters under the Austrian Presidency. The full video of the discussion is available here.
The IMCO committee held a public hearing on illegal content removal in the digital single market
On 19 June the Internal Market and Consumer Protection (IMCO) committee held a public hearing with several experts and members of the IMCO committee on the topic of illegal content removal in the digital single market. The discussion was mainly focused on the legal framework and the imperfection of content filters and human review in determining what content should be taken down. It was stressed that we must ensure that legal content is not take down in the process. The participants did not discuss the topic of counterfeit goods sold online. The full video of the discussion is available here.
Ecommerce Europe met DG Energy to discuss obligations of online marketplaces regarding energy labelling
On Friday 25 June, Ecommerce Europe met with the European Commission?s DG Energy at their request to discuss the obligations of online marketplaces regarding energy labelling. Under the framework regulation on energy labelling, 2017/1369, ?dealers? of certain energy related products have an obligation to visibly display energy label and provide product information. According to the Commission, this obligation also applies to online marketplaces when they act purely as intermediaries. The Commission is now preparing delegated acts and wants to ensure that this interpretation prevails and that it is indisputable that online marketplaces have a material obligation to display energy label and product information and are liable for non-compliance. The Commission has time until mid-July to submit the legislative draft and plans to have the rules adopted by November. More information can be found on the Commission?s website on the products that are regulated through Energy Labelling, including the Energy Labelling FAQ, with explanations on page 34-35 indicating when the electronic label and product fiche are expected to be shown. We will provide members with a more detailed update on the intention of the European Commission on this matter shortly.
The European Banking Authority opens its online Interactive Single Rulebook and Q&A tool to questions on PSD2
The EBA has updated its online Interactive Single Rulebook and Q&A tool to include PSD2. Users will now be able to submit questions on the application of the Directive and the work of the EBA. Through in Q&A tool, the EBA hopes to support a consistent application of the regulatory framework established by PSD2 and the RTS on SCA. Ecommerce Europe will assess if there is an opportunity for additional clarification from the European Banking Authority through this tool.
Rapporteur Morten L?kkegaard reports back to the IMCO Committee on the Accessibility requirements for products and services
On 18 June, the Rapporteur Morten L?kkegaard reported back to the IMCO committee on the Accessibility Act. His conclusions were that it was obvious that Member States were not ready to update their mandate. This means that the Council will most likely not be able to negotiate at the next trialogue scheduled for next Tuesday (26 June), which is a critical setback for the negotiations considering the aim was to reach an agreement during the Bulgarian presidency. On enforcement and complaint mechanism, it was agreed to drop the database under the conditions that the registers and complaint mechanism are kept, while referring to existing mechanisms under the alternative dispute resolution. On emergency services, although the European Parliament made a written proposal, the Council showed up at the trialogue with empty hands, so progress couldn?t be made. The issue of self-service terminals also remains open to further clarifications and discussions. Regarding transport, tourism, other union ex. micro enterprises, CE marking and the built environment ? although the discussion was on a right and constructive path, there is still a long way to go unless the Council comes back with an updated mandate. Lastly, the rapporteur concluded that he was very reluctant to have a fifth trialogue if the Council shows no flexibility on any item. MEP Sehnalova expressed her disappointment with the failure of the negotiations and said this was a very significant act which should be brought to life as soon as practicable. The full discussion is available here.
For an overview of the latest e-commerce related news from Brussels, please have a look at the attachment: Ecommerce Europe Monitoring 12-06 to 18-06.
This week, the Ecommerce Europe team will be engaged in the following meetings:
On 20 June, the first Händlerbund – Ecommerce Europe Workshop on Digital Taxation and VAT will kick-off in Berlin. Members and experts will discuss the plans of the European Union with regards to the recent proposals on the Taxation of the Digital Economy and understanding how to implement the EU VAT E-commerce Reform adopted in December 2017.
On 20 June, Ecommerce Europe will attend the GSMA Mobile Meetings Series entitled ?Enhancing Fairness in Platform-to-Business Relations?. The event will bring together around 20 high-level representatives from the EU institutions, industry and other stakeholders with the aim to explore if the Regulation proposed by the Commission represents what the sector really needs in terms of a regulatory framework and how it will shape the future of the Digital Single Market.
Furthermore, the team will keep performing public affairs and lobbying activities.
Please see below the policy highlights of the past week:
Busy week ahead in the EU Parliament: accessibility, illegal content online, platforms, digital content on the agenda
The European Parliament will be discussing important e-commerce related files this week. On 18 June, the Internal Market and Consumer Protection Committee (IMCO) will discuss about the European Accessibility Act: the Rapporteur for this dossier, MEP Morten L?kkegaard, will report back to the Committee on the ongoing interinstitutional negotiations on the proposed Directive. On 19 June, the IMCO Committee will hold two hearings. The first one will focus on the EU?s horizontal regulatory framework for the removal of illegal content in the Digital Single Market: representatives from platforms, international organisations, academia and national authorities will discuss with MEPs the existing EU horizontal legal framework for tackling illegal content online, the different approaches by Member States and voluntary best practices developed by platforms (click here for more information and the draft program). The second hearing will focus on addressing unfair trading practices in B2B (or Platform-to-Business) relations in the online environment: MEPs will discuss with experts, stakeholders and policy makers how to address the emergence of unfair practices in platform to business relationships, bearing in mind the increasingly important role of online platforms as vehicles for market access. They will also explore any problems that may arise in terms of lack of redress and more broadly the risk of fragmentation in the internal market (click here for more information and the draft program). The full agenda of the IMCO Committee is available here and the meetings can be followed live via this link. Finally, on 20 June, the Rapporteurs of the Legal Affairs Committee (JURI) will report back to the Committee on the ongoing interinstitutional negotiations on the proposed Digital Content Directive. Ecommerce Europe will closely follow the discussions and report back to the members in due time.
The EBA published its opinion on the implementation of the RTS on SCA
On 13 June, the European Banking Authority (EBA) published an Opinion on the implementation of the Regulatory Technical Standards on Strong Customer Authentication (RTS on SCA). This opinion aims at clarifying certain aspects of the standards and answering the numerous questions the EBA received from market participants and is primally addressed to National competent authorities. It covers the main requirements for the dedicated interfaces and application programming interface, the application of the SCA, the different exemptions to strong authentication as well as the methods that can be used to authenticate. The EBA will also continue to provide clarifications using the EBA?s Single Rulebook question and answer (Q&A) tool, which will be extended to PSD2 by the end of June 2018. The RTS on SCA will be legally applicable from 14 September 2019. Ecommerce Europe is finalizing an updated position paper to support and coordinate lobbying efforts at national level.
Austrian Presidency of the Council of the EU publishes its official program
The Austrian Federal Government has recently presented in Brussels the program for the Austrian Presidency of the Council of the EU, which will start on 1 July and last until 31 December 2018. On the issue of digitalization and competitiveness, the Austrian Presidency aims at continuing the EU?s work on the taxation of the digital economy in order to ensure that profits are taxed in the country in which they are generated, while avoiding overregulation. The Presidency aims to take strong and unequivocal positions vis-?-vis international partners, especially when it comes to taxation of the digital economy. The Austrian Presidency will attach particular importance to this issue in a bid to advance the negotiations and to outline potential solutions in light of the developments at G-20, OECD (Organisation for Economic Co-operation and Development) and EU level. Work on the European Commission?s proposal for the introduction of a common corporate tax base will continue as well. In the field of indirect taxation, the Presidency plans to achieve progress on the numerous European Commission proposals for modernizing VAT. Small and medium-sized enterprises (SMEs), start-ups and scale-ups are to take center stage during the Austrian Presidency, with an environment offering legal certainty while at the same time promoting growth and innovation to help them become more competitive. A particular focus will be on finalizing the platform-to-business trading (P2B) dossier. Austria will also continue constructive negotiations on the Single Market Program, the goods, services and compliance packages as well as on the ?New Deal for Consumers? package.
Ecommerce Europe invited to discuss energy labeling issues on platforms
The European Commission has invited Ecommerce Europe to engage with them on the issue of energy labeling on the internet and, in particular, the role of ?hosting? platforms. Due to a Swedish Court on the responsibility of such platforms in showing the energy label on the internet as per the applicable rules, the Commission is looking into the existing rules to see if there is room to further clarify then and avoid any ambiguity about who is responsible for what in this context. The meeting will take place on Friday 22 June and we will report back to the members with more information regarding this matter
HM Revenue & Customs survey for businesses trading in online retail
The HM Revenue & Customs department of the Government of the United Kingdom launched a short online survey about businesses experiences trading in online retail. Members of Ecommerce Europe are invited to fill in the survey which can be found here. The deadline for filling the survey in is Friday, 22 June 2018.
For an overview of the latest e-commerce related news from Brussels, please have a look at the attachment: Ecommerce Europe Monitoring 05-06 to 11-06.
This week, the Ecommerce Europe team will be engaged in the following meetings:
On 11 June, Ecommerce Europe will attend the ADR Assembly 2018. The event will bring together representatives of notified European ADR entities, ADR competent authorities, ODR contact points, European Consumer Centres, consumer organisations, business associations and other stakeholders. It will provide a forum to exchange best practice, network and discuss questions around the effective provision of alternative and online dispute resolution.
On 14 June, Ecommerce Europe will meet with Mr. Sami Koskinen, Financial Attache of the Permanent Represention of Finland to the EU and with Ms. Hana Stulajterova, Financial Attache of the Permanent Representation of Czech Republic to the EU in order to discuss the position of the e-commerce industry with regard to the introduction of a Digital Services Tax.
Furthermore, the team will keep performing public affairs and lobbying activities.
Please see below the policy highlights of the past week:
The administrator of a fan page is jointly responsible with Facebook for the processing of data of visitors to the page, according to the EU Court of Justice
On 5 June, the Court of Justice of the European Union ruled that administrators of Facebook fan pages are jointly responsible with Facebook for the processing of data of visitors to the page. Administrators of fan pages can obtain anonymous statistical data on visitors to the fan pages via a function called ?Facebook Insights?. This data is collected by means of evidence files (?cookies?), each containing a unique user code, which are stored by Facebook on the device of visitors to the fan page. An administrator takes part in the determination of the purposes and means of processing the personal data of the visitors to its fan page since they can ask for data in anonymized form concerning its target audience and thereby request the processing of that data. Therefore, the administrator must be regarded as a controller jointly responsible with Facebook for the processing of data. According to the Court, the fact that an administrator of a fan page, such as an online merchant, uses the platform provided by Facebook in order to benefit from the associated services (i.e. promotion of products, tailored offers) cannot exempt it from compliance with its obligations concerning the protection of personal data. Therefore, this Court decision has implications also for merchants who must comply with data protection rules not only on their websites but also on their social media accounts. The full court ruling can be found here whereas the summary of the ruling can be found here.
No agreement on ePrivacy Regulation under the Bulgarian Presidency, TTE Council concludes
The Telecommunications Council, held on 8 June, concluded that an agreement on ePrivacy Regulation will not be reached under the Bulgarian Presidency as wished by the Commission. The Bulgarian Presidency declared that more work under their and the upcoming Austrian Presidency is necessary. The Presidency asked the Member States? Representatives to give their opinions on three questions: acceptability of the proposal on metadata processing, acceptability of articles 8 and 10 as well as their opinion on the proposal?s balance between ensuring competitiveness of European businesses and safeguarding of privacy at the same time. The vast majority of Member States declared that the text required more work in all points raised by the Bulgarian Presidency, including the UK, France, Germany and Italy which made detailed proposals. Luxembourg went the furthest by saying that GDPR deals sufficiently with article 8. All Member States gave their opinion, except for Spain.
HM Revenue & Customs survey for businesses trading in online retail
The HM Revenue & Customs department of the Government of the United Kingdom launched a short online survey about businesses experiences trading in online retail. Members of Ecommerce Europe are invited to fill in the survey which can be found here. The deadline for filling the survey in is Friday, 22 June 2018.
Justice and Home Affairs Council holds a policy debate on certain aspects concerning contracts for the sales of goods
On 4 June 2018, the Justice and Home Affairs Ministers debated the Sales of Goods Directive. The Bulgarian Presidency stated that one of the main issues was related to the Digital Content Directive. The 3 issues for the discussion were: the possibility of having one set of rules to apply to all kind of goods including smart goods (those with embedded digital content), an issue of key importance for the EP (which wanted to apply a split approach); the suitability of remedies; and the length of the guarantee. The Member States welcomed the inclusion of smart goods in the Directive. At the same time, many were concerned that the level of consumer protection will be diminished with only a 2-year guarantee period. Commissioner Vera Jourova declared that the directive is crucial for the completion of the Digital Single Market.
Denmark, Finland and Sweden call for a global solution for the taxation of the digital economy
Finance Ministers of the three Nordic countries published their opinion on the Digital Services Tax proposed by the European Commission, which is basically in line with the position of Ecommerce Europe. While agreeing that everyone needs to pay their taxes and that a level playing field must be ensured, the ministers expressed their concern regarding the Commission?s interim proposal. They believe the proposal deviates form international principles when it comes to taxing rights of countries based on where the value is created. Furthermore, in their opinion, taxation of gross income deviates from fundamental principles of income taxation. They also expressed concern about enforcement of such tax and possible retaliation from non-EU countries. The ministers highlighted the need to ensure favorable climate for businesses and competitiveness of the EU economy. Therefore, they agree that a global OECD solution should be pursued instead. The full opinion is available here.
Citizens' Dialogue on the New Deal for Consumers takes place in Copenhagen and Helsinki
The third and fourth Citizens' Dialogue on the New Deal for Consumers took place in Copenhagen and Helsinki respectively. The event is jointly organised by the Commission and state authorities as a way to listen to the views and concerns of citizens in regards to the new proposed legislation. During the event in Copenhagen, Jakob Hald, Director General of the Competition and Consumer Authority, said that the goal was not to weaken consumer protection but to modernize it. One of the most sensitive issues revolved around who had the right to represent consumers in cases of mass harm. Finish Employment Minister Jari Lindstrom pointed out that The New Deal is not just about consumers but also about the health of the economy, because it increases consumer?s trust towards the markets. Finland’s Justice Minister, Antti Häkkänen, while supporting the Commission’s efforts, pointed out that consumer law needs to be simplified. For full press release of the events please visit this (Copenhagen) and this (Helsinki) link.
Next meeting of the GDPR Multi-stakeholder Group postponed to September 2018
The European Commission?s DG Justice announced that the next meeting of the Consultation Group on the application of GDPR, of which Ecommerce Europe is a member, will be postponed to 18 September 2018 instead of 22 June. The main reason for this is the fact that, following the entry into application of the GDPR on 25 May, several Member States are still in the process of adopting their national legislation. Therefore, the Commission believes that a more fruitful discussion can be yielded after the summer. The agenda will follow in due time.
For an overview of the latest e-commerce related news from Brussels, please have a look at the attachment: Ecommerce Europe Monitoring 23-05 to 28-05.
This week, the Ecommerce Europe team will be engaged in the following meetings:
On 29 May, Senior Policy Advisor Léon Mölenberg will attend the European Justice Forum Business & Expert Roundtable. The discussion will focus on an exchange of information on the proposal on representative action. Collective redress will be part of the discussion as well.
On 29, Communications Officer Laura Contin will attend a CEPS event on: AI and Cybersecurity: Friends or foes? The discussion will revolve around the following question: What are the implications of current and future use of machine learning for cybersecurity and how is AI transforming information security?
On 1 June, Public Affairs Advisor on e-Payments Juliette Beaulaton will attend a policy debate on ?Let?s make big tech accountable?. The discussion will focus on how the tech sector, policy-makers and citizens can work together to find solutions to make tech companies more accountable and transparent.
Furthermore, the team will keep performing public affairs and lobbying activities.
Please see below the policy highlights of the past week:
EU Ministers discuss Platform Regulation and New Deal for Consumers at the Competitiveness Council
Today, EU Ministers are gathering for a meeting of the Competitiveness Council. The Regulation on platforms to business relations was discussed this morning, and ministers generally expressed their support for the proposal. Austria ? that will hold the next Presidency of the Council as of July 2018 ? declared its intention to reach a general approach on the file in November of this year. This was echoed by Vice-President Andrus Ansip that declared wanting to close the file before the end of the Commission?s mandate in mid-2019. This afternoon, Ministers will continue to discuss on topics including the state of play of the Digital Single Market and the New Deal for Consumers. A more detailed update will follow in due time. Ecommerce Europe is preparing two position papers, based on the discussions we had in the e-Regulations Working Committee.
The Bulgarian Presidency published guidance documents on the Sales of Goods proposals
On 24 May, the Bulgarian Presidency of the Council published a guidance for the policy debate on the Sales of goods proposal that will be held on 4 and 5 June. The document highlights the main policy questions on which delegations should provide additional political guidance. The Presidency insists particularly on the need to ensure consistence between this proposal and the proposal on Digital Content. Delegations will be invited to prepare to answer questions on a single set of rules for all consumer goods, remedies, and the level harmonization and time limits.
The Council published an updated Bulgarian Presidency digital taxation roadmap
On 23 May, the Bulgarian Presidency published an updated digital taxation roadmap based on comments of delegations at the meeting of the High Level Working Party (Taxation) on 16 May 2018. The Presidency will be giving priority to the two files in the coming months in the Council and preparatory bodies. The Presidency intends to carry out a first round of detailed technical analysis of the Digital services tax directive (DSTD) legislative proposal at the Working Party on Tax Questions by June 2018. As for the Proposal for a Council Directive laying down rules relating to the corporate taxation of a significant digital presence („SDPD”), the Council believes that by June 2018 initial technical analysis of this proposal will be completed at Working Party on Tax Questions level as well. The Bulgarian Presidency has started the initial technical examination of both DSTD and PSPD.
The General Data Protection Regulation entered into application
On 25 May, the General Data Protection Regulation became effective, creating one set of data protection rules for all companies operating in the EU. The European Commission has now shifted its focus on the implementation phase by actively supporting Member States. The Commission will organize an event to take stock of different stakeholders' experiences of implementing the Regulation in 2019. This will feed into the report the Commission is required to produce by May 2020 on the evaluation and review of the Regulation. For more information on the Regulation, you can consult the Commission?s guidance and official website.
Dear Member of Ecommerce Europe,
For an overview of the latest e-commerce related news from Brussels, please have a look at the attachment: Ecommerce Europe Monitoring 15-05 to 22-05. Please note that yesterday, 21 May, it was a public holiday in Belgium. This is why the weekly policy update is exeptionally released on Tuesday this week.
This week, the Ecommerce Europe team will be engaged in the following meetings:
On 23 May, the Director of Public Affairs Luca Cassetti will meet with Mr Jorge Gerraras Gutierrez, Fiscal Attache of the Permanent Representation of Spain to the EU, and with Mr André Conde Morais, Fiscal Attache of the Permanent Representation of Portugal to the EU in order to discuss the position of the e-commerce industry with regard to the introduction of a Digital Services Tax.
On 25 May, Ecommerce Europe will attend the event on the entry into application of the EU General Data Protection Regulation (GDPR), hosted by the European Commission.
Furthermore, the team will keep performing public affairs and lobbying activities.
Please see below the policy highlights of the past week:
The EP IMCO Committee held an exchange of views on Tackling Illegal Content Online
On 16 May the EP IMCO Committee held an exchange of views with the European Commission on the Recommendation on tackling illegal content online. Irene Roche Laguna from the European Commission stressed that the Recommendation reflected the political need to act against terrorist content. She said that the Commission was monitoring the situation with regard to the self-regulatory measures by platforms and that cooperation between member states and platforms on sharing best practices was ongoing. MEP Dita Charanzova stressed that in her opinion, a Regulation on notice-and-action was necessary to avoid fragmentation even before the 6 months review by the Commission. MEP Anna Maria Corazza Bildt added that the legal framework created by the E-commerce Directive was no longer enough, but that she supported the Commission?s line on self-regulation if it produces results. MEP Julia Reda highlighted the risks of deleting legal content without authorities being informed, and also questioned the need for new measures considering there was already a Directive on terrorism that had not been fully implemented. The Commission stressed that more transparency was needed regarding the use of filter, and added that it was still exploring the necessity of a horizontal measure on notice-and-takedown. Ecommerce Europe is currently drafting a response to the online consultation on fighting against illegal content online that will run until 25 June.
The EP IMCO Committee held an exchange of views on Promoting fairness and transparency for users of online intermediation services
On 17 May the EP IMCO Committee members exchanged views with the European Commission on its proposal for Regulation on promoting fairness and transparency for users of online intermediation services. The EP IMCO Committee will be the lead Committee on the Proposal. The Commission highlighted the main aspects of the Proposal and insisted on the need for a Regulation that would restore a level playing field with clear and transparent rules without interfering with the business model of the platform. MEP Charanzova (ALDE) expressed her concern about this Regulation being an unnecessary burden on SMEs and startups and added that she was not in favor of an ex ante control if market forces and competition law could solve most of the issues raised by the Commission. Her view is that too much transparency could be harmful to both consumers and businesses. The Commission replied that the administrative burdens were limited and that neither the market nor competition law could solve the problems identified by the Commission. It also added that it hoped for an adoption before May 2019.
The Council of the EU published a Presidency discussion paper on the platforms-to-business regulation
On 15 May, the General Secretariat of the Council published a Presidency discussion paper on the Platforms-to-business relations. The document aims at presenting the proposal to National delegations ahead of the policy debate that will take place during the Competitiveness Council on 28 May. It summarizes the Commission?s proposal and presents what it qualifies as the ?two-step approach? consisting first in the proposed Regulation – that will ensure enhanced transparency and redress obligations – and followed by an in-depth monitoring effort that will contribute evidence to the review of the proposed Regulation three years after its adoption. The Secretariat asks Delegations to prepare for the upcoming Council by giving their opinion on the need to improve predictability and transparency and on the two-step approach.
The discussions on the Digital Content Directive continue in trilogue
On 16 May, the EP IMCO Committee held a meeting on the Directive on contracts for the supply of digital content. The Rapporteur Evelyne Gebhardt reported back to the Committee on the progress made during the trilogue and stated that an agreement had been reached with the Council regarding updates, the definition of prices, the termination of the contract and the implementation deadline that will be of 2 years and 3 months. While the Delegations continue to make progress, several issue remain open, such as the right to compensation (Article 14); IoT/software included in products ? where the European Parliament stands firm on its position that software in goods is the same as embedded content; and the level of harmonization, where the Council could consider targeted harmonization. The next trilogue will take place on 18 June.
Commission?s Vice-President Andrus Ansip exchanged views with the EP IMCO Committee on the Digital Single Market
During an exchange of views with the EP IMCO Committee, Vice-President Ansip discussed the Digital Single Market Strategy, Online Platforms and Artificial Intelligence. He stressed that out of the 29 Digital Single Market proposals, only 12 had been completed so far and that progress was unequal depending on the files. MEP Andreas Schwab stressed that he believed there was still a lot to be done on the Commission?s sector inquiry into e-commerce. MEP Nicola Danti also inquired about a possible re-opening of the eCommerce Directive. Andrus Ansip answered that platforms were already liable that it was easy to ?kill platforms with over-regulation?. Overall the business-to-platform proposal was well received, but MEPs insisted on the need to ensure European companies were capable of growing.
The European Commission publishes the result of a screening on misleading practices by website selling telecoms services
On 18 May, the European Commission and national consumer protection authorities published the results of an EU-wide screening of 207 websites offering fixed/mobile phone, internet, audio and video streaming services. The screening reveals that 163 of these websites could be infringing EU consumer law. Some of the most common issues identified are the advertisement of allegedly free or discounted packages that are in fact a bundled offer, the lack of a dispute resolution system, or the fact that these websites can unilaterally change the terms of the contract without information or justification to the consumer. For more information, you can consult the Q&A and the result of the screening.
The EP ITRE Committee adopted a non-binding resolution on Distributed ledger technologies and blockchains
On 16 May, the EP ITRE Committee adopted a non-binding resolutions calling for the application of blockchain to cut intermediation costs for small firm and ensure that transactions are executed efficiently. The resolution call on the EU Commission to propose a regulatory approach designed to promote different uses of blockchains and other Distributed ledger technologies (DLTs) that is innovation-friendly and technology neutral. You can consult the press release for more information.
For an overview of the latest e-commerce related news from Brussels, please have a look at the attachment: Ecommerce Europe Monitoring 08-05 to 14-05.
Please note that last week, the European institutions were closed for holiday, therefore no new initiatives nor relevant legislative developments have been registered.
This week, the Ecommerce Europe team will be engaged in the following meetings:
On 16 May, Ecommerce Europe will attend the EuroCommerce?s Payment System Committee to discuss ongoing legislative developments, including PSD2 and the review of the Interchange Fee Regulation;
On 17 May, the Director of Public Affairs Luca Cassetti will meet with Ms Edita Sainickaite, Fiscal Attache of the Permanent Representation of Lithuania to the EU, in order to discuss the position of the e-commerce industry with regard to the introduction of a Digital Services Tax.
Furthermore, the team will keep performing public affairs and lobbying activities.
Please see below the policy highlights of the past week:
Ecommerce Europe will launch its first joint Workshop with Händlerbund on Digital Taxation and VAT in Berlin
On 20 June, Ecommerce Europe and Händlerbund are organizing a workshop to discuss the plans of the European Union with regard to the taxation of the digital economy and the implementation of the VAT E-commerce Reform adopted in December 2017 by the EU Member States. This workshop is an occasion for participants to ask questions, exchange views and hear from European experts about the practical consequences that the adopted and upcoming EU legislation in the taxation area may have on the daily business of online merchants. This event will be the first of a series of workshops co-organized by Ecommerce Europe and national associations.
Updated translations of the General Data Protection Regulation have been published
A corrigendum of the official translations of the General Data Protection Regulation has also been published to address several mistakes in all EU languages. While the Corrigendum mostly addresses typos and clerical errors, some mistakes might affect the meaning of certain provisions. We therefore advise you to consult the applicable language version for you jurisdiction and not only the English version. For an overview of some correction made to the text, you can consult this article from IAPP.
Ecommerce Europe to meet with Member States representatives on the Digital Tax
In the past days, we have been setting up meetings with the Member States? Permanent Representations to the EU in charge of negotiating the two proposals on the taxation of the digital economy. The aim will be to present the position and the concerns of the e-commerce sector specifically with regard to the introduction of a Digital Services Tax, which is the short term temporary solution proposed by the European Commission. We will provide members with reports of the meetings we will have with the representatives of the EU Members States.
Dear Members of Ecommerce Europe,
For an overview of the latest e-commerce related news from Brussels, please have a look at the attachment: Ecommerce Europe Monitoring 17-04 to 23-04.
Tomorrow 24 April, Director of Public Affairs Luca Cassetti will attend an event organized by FEDMA in the Europen Parliament on the Privacy and the Digital Single Market. On 25 April, Public Affairs Advisor Juliette Beaulaton will attend the second edition of the BeCommerce B2B Summit. The BeCommerce B2B Summit is the event for Belgian and European e-commerce executives with a strong interest in innovative B2B online commerce and Artificial Intelligence.
Furthermore, this week Ecommerce Europe will continue working on some follow-up activities related to the last Working Committees held on 12-13 April in Milan.
Please see below the policy highlights of the past week:
The European Commission publishes a Communication on the future of the retail sector
On 19 April, the European Commission published a new Communication on a ?European Retail Sector fit for the 21st Century?. The Communication lays down best practices for Member States and operators to ensure that the retail sector adapts to the new challenges. The Communication provides best practices to address restrictions in retail affecting market performance, facilitate retail establishment and reduce operational restriction. The document insists particularly on the influence of the development of e-commerce on retail, for example in terms of consumer shopping habits, and on the need to ensure a level playing field between brick and mortar retail and e-commerce to ensure the growth of the retail sector. The Communication also identifies the increasingly blurry boundaries between offline and online. For more information, you can consult the Q&A and the Communication. We will further analyze the implications of this new communication and will provide a more detailed update.
The European Commission organizes seminars on Fair Taxation in Member States
On 19 April, the European Commission launched a series of 5 Seminars on Fair Taxation that will take place in different Member states during the summer to discuss the work of the institution on tax abuse, tax avoidance, but also the new Commission?s proposal on the fair taxation of the digital economy. The next seminar will take place in Vienna, Austria, on 17 May. For more information, you can consult DG TAXUD?s website.
MEPs highlights the challenges created by digital companies in Competition Policy
On 19 April, the European Parliament adopted its Annual Report on Competition Policy. The report highlights that digital companies constitute specific challenges for competition and fiscal authorities and Members of the European Parliament express their concerns over the use of personal data by tech companies for marketing and super profiling purpose and call for additional resources for the Directorate General for Competition. MEPs also call for a tax on digital companies on the basis of their genuine activity in Member States and to step up efforts to ensure fair competition in the digital sphere.
The IMCO Committee of the EU Parliament will discuss important e-commerce related files
Today and tomorrow, the IMCO Committee of the European Parliament will discuss important files related to e-commerce. The Members of the EU Parliament will have an exchange of views with Commissioner Věra Jourová, who will present her views on the latest developments on the two digital contracts proposals (digital content and goods) now under negotiation. Furthermore, she will present the New Deal for Consumers package, which contains two legislative proposals: one horizontal proposal amending four existing acts in the field of consumer and marketing law, and one proposal on representative actions for the protection of the collective interests of consumers, repealing the Injunctions Directive. There will also be a first exchange of views with MEP Julia Reda on the topic of ?tackling illegal content online?. A more detailed report will follow after the 2-day IMCO meeting.
Update on interinstitutional negotiations on the Accessibility Act
After the first exploratory trialogue on 5 March 2018, the second round of negotiations on 12 April allowed the three institutions to tackle certain issues of the proposed Directive in more depth, namely: standards and common technical specifications (Articles 13 and 14); fundamental alteration and disproportionate burden (Article 12 and Council?s Annex IV); the structure and overall approach of Annex I as well as the Council?s suggested new Annex Ia. The positions of the co-legislators on all three points were found to be converging and further work was delegated to technical level to finalize the corresponding text. The third trialogue meeting is scheduled for 15 May 2018.
For an overview of the latest e-commerce related news from Brussels, please have a look at the attachment: Ecommerce Europe Monitoring 10-04 to 16-04.
On 19 April, Director of Public Affairs Luca Cassetti will be a speaker at the E-Commerce Week 2018, organized by UNCTAD in Geneve. Under the theme ?Development Dimensions of Digital Platforms?, the E-Commerce Week 2018 will explore the growing role of digital platforms and concrete steps to harnessing these evolving technologies for sustainable development. Furthermore, on 20 April, Senior Policy Advisor Léon Mölenberg will attend EuroCommerce Working Group to discuss the New Deal For Consumers.
Furthermore, this week the Brussels team will follow up on last week’s Working Committee meetings held during the Members Days 2018 in Milan.
Please see below the policy highlights of the past week:
The European Commission published its ?New Deal for Consumers? Package
On 11 April, the European Commission proposed its Package on ?a New Deal for Consumers?, composed of two proposals for Directives and a Communication. The first proposal on representative actions for the protection of the collective interests of consumers repeals the Injunctions Directive and aims at improving tools for stopping illegal practices and facilitating redress for consumers where there are widespread infringements of their rights. The second proposal amends EU Consumer Law (in particular four existing directives: the Directive on unfair terms in consumer contracts, the Directive on consumer protection in the indication of the prices of products offered to consumers, the Directive concerning unfair business-to-consumer commercial practices and the Directive on consumer rights) and aims at improving the enforcement and modernizing EU consumer legislation in light of market developments, in particular the digital economy, as well as amending EU rules on penalties. The two proposals are accompanied by a Communication on the New Deal for Consumers. For more information, the European Commission published a series of factsheet explaining the changes these proposals will bring for consumers and businesses as well as a Q&A. Ecommerce Europe published a Press release, and is currently drafting a comprehensive position paper on the Package.
The Council of the EU adopted the Parcel Delivery Regulation
On 12 April, the Council of the EU adopted the provisional agreement reached on the Regulation on Cross-border Parcel Delivery with the European Parliament last December. The vote concludes the legislative procedure as the European Parliament adopted the text on 13 March. The regulation will be signed by both institutions and published in the EU Official Journal. It will enter into force 20 days after publication and apply as of 2019.
The Article 29 Working Party published its revised guidelines on Transparency
On 11 April, the Article 29 Working Party published its final Guidelines on transparency under the General Data Protection Regulation. The document is meant as a guidance on the new obligation of transparency concerning the processing of personal data under the GDPR. We are currently assessing the changes made by the WP29 compared to the previous version of the Guidelines and we will get back to you with a more detailed analysis.
The Presidency of the Council published a revised text for the ePrivacy Regulation
Ahead of the Working Party TELE of 19 April, the Bulgarian presidency of the Council published a new revised text of the ePrivacy Regulation. The Presidency has amended the text to first clarify the link with GDPR. It has also proposed to modify Article 6 to allow processing for purposes of network management and optimization and added new basis for processing for the purpose of statistical counting. The Presidency has also proposed amendments to clarify Article 8 and the protection of end-user?s terminal equipment information. In regards to Article 10 and Privacy settings, the Presidency has proposed to link the information on the settings to ?every update?, rather than the unclear provision on ?periodic interval? from the previous version. On direct marketing, the Presidency maintained its previous changes, proposing to leave Member States to decide, if they so wish, what is the appropriate time limit for using customers' contact details for direct marketing. We will prepare a more detailed update on the amended proposal.
Ecommerce Europe held successful Working Committee Meetings and Board meetings in Milan
On 12 and 13 April, Ecommerce Europe travelled to Milan for its Working Committee meetings and the Executive Committee and Board of Directors meetings. On Thursday 12 April, the Board approved the appointment of two new members, Ms. Lorraine Higgins, CEO of Retail Excellence, and Mr. Janne Koivisto, Senior Advisor of the Finnish Commerce Federation, and the Brussels Team of Ecommerce Europe presented their plans for 2018. The Board of Directors was followed by the meeting of the e-Regulations Working Committee, where members discussed the Commission?s Digital Tax, the package for A New Deal for Consumers and questions related to data protection and e-Privacy. The next morning, members gathered for the Trustmark Working Committee meeting. In the afternoon, members were presented the new format of the e-Payments Working Committee, that will now extend its scope to Fintech and Artificial Intelligence and become the Digital Transactions & Innovation Working Committee.
For an overview of the latest e-commerce related news from Brussels, please have a look at the attachment: Ecommerce Europe Monitoring 04-04 to 09-04.
Tomorrow, Ecommerce Europe will attend the Digital Days 2018, an initiative organized by the European Commission, that brings together ministers, representatives of EU countries, industry, academia and civil society representatives in order to encourage cooperation in artificial intelligence, blockchain, and innovation.
Furthermore, from 11-13 April, the Brussels team will be in Milan for the Members Days 2018, this year kindly hosted by our Italian association Consorzio Netcomm. During the Members Days, Working Committees will be held as well. The Brussels team will update members on the latest legislative developments on e-Regulations and e-Payments, as welll as on the European Ecommerce Trustmark.
Please see below the policy highlights of the past week:
The European Commission is gathering data on the Implementation of the Interchange Fee Regulation
The European Commission will publish an Implementation report on the Interchange Fee regulation in September 2019. The Commission?s investigation aims at assessing the consequences of the implementation of the regulation on stakeholders, including merchants and online merchants. It will explore data on increases/decreases in total fees paid by merchants (excluding commercial cards); overall transaction costs for debit, credit & commercial cards; identification and quantification of newly introduced acquiring fees, etc. EuroCommerce is currently gathering views through its Survey on the Interchange Fee Regulation. The results will be instrumental in providing the Commission precise inputs on merchants? experience with the Regulation. We therefore invite you to share the online survey with your members and ask them to participate. The current deadline for the EuroCommerce Survey is 20 April 2018.
Eurostat published the results of its study on e-Commerce
Eurostat published the result of its survey on the Digital Economy & Society in the EU. The chapter on e-commerce focuses both on people ordering goods and services online and businesses selling electronically. Eurostat concluded from its survey that e-shopping was on the rise in all age group but most notably for younger internet users. Eurostat also found out that the majority of e-shoppers (69 %) in the EU had not experienced any problems when ordering or buying online during the year prior to the 2017 survey. Those who identified problems mentioned delay in delivery and websites crashing.
The European Commission published a Policy brief on the Coty Judgement
The European Commission published a Competition Policy brief on EU competition rules and marketplace after the Coty Judgement (06/12/2017). The aim of this policy brief is to follow-up on the Report in relation to marketplace bans and to provide stakeholders with the view of DG Competition in the light of the Coty judgment. The Commission summarized the decision of the European Court of Justice, which held that marketplace restrictions taking the form of selective distribution systems could comply with EU Competition rules under certain criteria clarified in the judgement. The Commission added that it agreed and welcomed the interpretation of the ECJ, and that in DG Competition’s view, marketplace bans did not amount to a hardcore restriction.
Ecommerce Europe goes to Milan for its Members Days and Working Committees meetings
On 12 and 13 April, Ecommerce Europe will be organizing its Working Committees in Milan to discuss ongoing and upcoming regulatory developments in the EU. The e-Regulations Working Committee will cover a broad range of pressing issues, including the new Commission?s proposal on the taxation of the digital economy, as well as the upcoming package ?New Deal for Consumers? and the Proposal on online intermediation services and search engines. During the e-Payments Working Committee, members will discuss the implementation status of the Payment Services Directive, the new Fintech Action Plans and the Commission?s plans on Artificial Intelligence.
For an overview of the latest e-commerce related news from Brussels, please have a look at the attachment: Ecommerce Europe Monitoring 26-03 to 03-04. Please note that this week, the weekly policy update is exeptionally issued on Tuesday due to the Easter break.
This week, the Brussels team is active in the finalization of the preparation of the upcoming Working Committees meetings that will take place in Milan next week, from 11-13 April.
Please see below the policy highlights of the past week:
A draft of the Proposal for a Directive on collective redress was leaked in the press
The Draft Proposal is part of the upcoming package New Deal for Consumers. It aims at modernizing and replacing the current Injunctions Directive, by creating new rules on representative actions for the protection of collective interests of consumers. We are currently analyzing the leaked draft and we will prepare a more detailed update on the content of the Proposal.
The Council continues its negotiations on the ePrivacy Regulation
On 28 March, the Working Party TELE discussed the Presidency?s revised proposal for the ePrivacy Regulation. In its last Discussion Paper, the Presidency proposed amendments to Article 8 (Protection of end-users terminal equipment information), Article 10 (Privacy settings) and Article 16 (direct marketing communication). Considering the importance of those articles for the e-commerce sector, Ecommerce Europe requested a meeting with the Bulgarian Presidency to further discuss our views. However, considering their lack of availabilities, they could not grant us a face-to-face meeting. During the upcoming e-Regulations Working Committee that will take place on 12 April, members will discuss the position of the association in light of the new amendments on the above-mentioned articles. The Brussels Team will then prepare a new position paper to be sent out to all Permanent Representations in view of future negotiations.
Trialogue negotiations on the Digital Content Directive are moving forward
On 27 March, the Rapporteur for the Digital Content Directive MEP Evelyne Gebhardt reported back to the EP JURI Committee on the progress made during trialogues. She stated that negotiations had gone well, and that progress had been made on the question of updates and on the protection of data. The issues of the inclusion of embedded digital content in the scope and the level of harmonization are still open for discussion. Despite the differences of opinion on these two topics, the Rapporteur believes that an agreement could be reached before the end of the Bulgarian Presidency, which means before the end of June 2018.
Ecommerce Europe sent its feedback on the Inception Impact Assessment on Illegal content online
On Friday 30 March, Ecommerce Europe sent its feedback on the European Commission?s Inception Impact Assessment on illegal content online.
EU Commission launched ?Consumer Law Ready? program for SMEs
The European Commission has recently launched a portal, called ?Consumer Law Ready?, which is a specialist training program for people in SMEs. It is supposed to help SMEs understand and comply with the latest EU Consumer Laws. There are dedicated Consumer Law Ready portals for every country in the European Union. The training enables to gain knowledge of the important aspects of Consumer Law, which will help improving customer service and increase consumer trust. The portal is accessible at: https://www.consumerlawready.eu/. We invite you to share this link with your company members.
Trialogues on the Accessibility Act
The first trialogue meeting on the Accessibility Act was held on 5 March. While reporting back to the EP IMCO Committee, the Rapporteur on the file – MEP L?kkegaard – stated that the Council and the European Parliament outlined their position on key issues, such as the scope, accessibility requirements, operating systems and self-service terminals, as well as the exception for microenterprises. At a recent event on accessibility, a representative from the European Commission stressed that the three institutions have not the same position on the scope of directive. The next trialogue meeting will take place on 12 April.
Regulation on Portability of online content now applicable in all EU
As of 1 April 2018, the Regulation on the Portability of online content is applicable in all EU Member States. This Regulation aimed at ensure that Europeans can access content that they bought or subscribed to – such as films, e-book, music – when they travel or stay temporarily in another EU country. Ecommerce Europe was not involved with this Regulation as it was not a priority for our members. However, you can find more information in the European Commission?s factsheet.
For an overview of the latest e-commerce related news from Brussels, please have a look at the attachment: Ecommerce Europe Monitoring 20-03 to 26-03.
Tomorrow 26 March, Ecommerce Europe will attend the API Evaluation Group. The group aims at evaluating standardized API specifications in order to help ensure that those standards are compliant with the requirements of the revised Payment Services Directive (PSD2) and meet the needs of all market participants. Furthermore, Director of Public Affairs Luca Cassetti will attend the Amazon Academy event. This time, the meeting will focus on accessibility and in particular on the latest accessibility innovation for customers.
On 29 March, Ecommerce Europe will welcome a delegation from Morocco for an informal discussion on the European legislation in the e-commerce sector and the role of the association in elaborating public affairs strategies to stimulate regional and cross-border e-commerce.
Finally, the Brussels team will continue the preparation of the upcoming Working Committees meetings that will take place in Milan from 11-13 April.
Please see below the policy highlights of the past week:
The European Commission published two proposals on the taxation of digital business activities in the EU
On 21 March, the European Commission published two proposals for new rules for the taxation of digital business activities in the EU. The first proposed Directive aims to reform corporate tax rules so that profits are registered and taxed where businesses have significant interaction with users through digital channels. This forms the Commission’s preferred long-term solution, while the second proposal responds to calls from several Member States for an ?interim tax? which covers the main digital activities that currently escape tax altogether in the EU. The legislative proposals will be submitted to the Council of the EU for adoption (unanimity is needed) and to the European Parliament for consultation. The EU will also continue to actively contribute to the global discussions on digital taxation within the G20/OECD, and push for ambitious international solutions. Ecommerce Europe sent a letter to the President of the European Commission Jean-Claude Juncker to share our preliminary opinion on 5 March.
EU Commissioner Moscovici replied to our letter on the Digital Services Tax
Last Friday afternoon, one day after the publication of the European Commission?s proposals, Ecommerce Europe received a letter from Pierre Moscovici – the Commissioner for Economic and Financial Affairs, Taxation and Customs – in reply to the letter that we sent to the President of the Commission. In the letter, it is clearly mentioned that any discussion about the specific content of the proposals can only take place once such legislative acts have been adopted (which happened on 21 March), and that is why our concerns are not specifically addressed by the Commissioner. Nevertheless, the letter clearly shows that the Commission?s intention to work with us on this project. Ecommerce Europe is currently analyzing the content of both proposals, which will be presented at the next meeting of the e-Regulations Working Committee on 12 April in Milan.
The New Deal for Consumers Package has leaked
One of the proposals of the upcoming New Deal for Consumers Package has leaked. The draft directiveconcerns the targeted amendments the Commission wishes to propose to modify the Consumer Rights Directive, the Unfair Commercial Practices Directive, the Unfair Contract Terms Directive and the Price Indication Directive. The proposal aims at creating more effective, proportionate and dissuasive penalties for widespread cross-border infringements, by allowing national authorities to impose fine of at least 4% of the trader?s turnover for widespread infringements. It also envisages that consumers should have the right to individual remedies. The proposal aims at bringing more transparency for consumers in online marketplaces, by creating additional information requirements, including information about the criteria for ranking, the entity with which the contract is concluded as well whether consumer protection legislation applies. As expected, the proposal also removes two specific obligations regarding the right of withdrawal: the obligation to accept this right even where a consumer has made actual use of an ordered good and reimbursing before receiving. A new point has been added compared to what was previously announced by the European Commission, concerning the extension of the Consumer Rights Directive to digital services for which consumers provide personal data instead of paying with money. The Commission considers that consumers should have the same rights to pre-contractual information and to cancel within 14 days right of withdrawal period.
The Bulgarian Presidency published a new discussion paper on the ePrivacy Regulation
Ahead of the Working Party TELE meeting on 28 March, the Bulgarian Presidency of the Council published a new Presidency discussion paper which includes a revised text of the ePrivacy proposal, focusing on Article 8,10, 15 and 16 and related recitals. The Presidency is also seeking comments article 18 to 29 to pursue the discussion in upcoming Working Party TELE meetings. Specifically on Article 10 on Privacy settings, the Presidency has proposed to amend it: the provision now requires information to be provided to the end-user about the possibility to choose a setting, without however prompting the end-user to agree with the settings upon installation or first usage of the browser. The Presidency has also proposed to include periodic reminders about the privacy settings. The Presidency has also amended the Article 16 on Direct marketing communication: a new paragraph allows Member States to set a time limit for using customers' contact details for direct marketing. To address concerns that online advertising would be captured by the provisions on direct marketing, the new text of Article 16 explicitly excludes advertisements on websites that are displayed to the general public and do not require end-users' contact details.
The discussions on the Digital Content Directive continue in trialogues
On 21 March, the Rapporteur for the Proposal for a Directive on Contracts for the supply of digital content, MEP Evelyne Gebhardt (S&D, DE) reported back to the IMCO Committee of the European Parliament about the outcome of last trialogue negotiations on the Digital Content Directive. The MEP mentioned that an agreement has been found on most of the issues, but that three questions remain open for discussion: software embedded in goods, the degree of harmonization regarding guarantee period, and the question of data protection. You can find more information in the article that we published today on our website.
Ecommerce Europe attended a European Commission?s Expert Group on GDPR
On 20 March, Léon Mölenberg – Senior Policy Advisor for Ecommerce Europe – attended the 2nd meeting of the European Commission?s Expert Group to support the application of the General Data Protection Regulation. The Commission presented an overview of the implementation, stressing that while only 3 countries had already implemented the new rules, most countries should be ready by 25 May. The Commission mentioned that it was not planning on proposing delegated acts on the GDPR for the moment. Participants asked the Commission if it would be possible to obtain an overview of all the parts of the regulation where member States are allowed to go further, and the Commission assured that it will deliver this document as soon as possible. Regarding raising awareness among citizens and SMEs, the Commission asked participants to share again their guidance website, which now includes documents in 22 languages and a lists of National Data Protection Authorities. The Commission welcomes feedbacks on the toolkits from companies.
European Commission published extensive Q&A on the Geo-blocking Regulation
For a better understanding of the Regulation on Geo-blocking, which will apply as of 3 December 2018, the European Commission has recently published some material that is supposed to facilitate compliance. Please feel free to share it with your members, especially the extensive Q&A document. This document is provided by the Commission services for information purposes only. It does not contain any authoritative interpretation of the Geo-blocking Regulation and it does not constitute a decision or position of the Commission. The Commission published the full text of the Regulation, the Extensive Q&A document on the Geo-blocking Regulation as well as the 10 Key Features of the Geo-blocking Regulation.
The European Commission publishes a Notice regarding the Geo-blocking Regulation after Brexit
The European Commission published a Notice to Stakeholders regarding the withdrawal of the United Kingdom and the EU legislation in the field of geo-blocking. According to the document, as of the withdrawal date, natural persons residing in the United Kingdom (unless they have a nationality of a Member State) or undertakings established in the United Kingdom will not be able to benefit from Regulation. For traders, considering the Geo-blocking Regulation applies to all traders operating within the EU, regardless of whether those traders are established in the EU or in a third country, will continue to be bound by the rules established by the Regulation.
For an overview of the latest e-commerce related news from Brussels, please have a look at the attachment: Ecommerce Europe Monitoring 13-03 to 19-03.
Tomorrow 20 March, Senior Policy Advisor Léon Mölenberg will attend the 2nd meeting of the Multistakeholder expert group to support the application of the General Data Protection Regulation (GDPR). Among the topics on the agenda, the state of play in relation to the the entry into application of the GDPR and awareness-raising activities towards business and citizens related to the application of the GDPR.
Furthermore, this week the Brussels team will continue the preparation of the upcoming Working Committees meetings that will take place in Milan from 11-13 April.
Please see below the policy highlights of the past week:
New leaked draft of the upcoming Regulation on platforms
Ecommerce Europe received a new leaked version of the upcoming draft Proposal for a Regulation on promoting fairness and transparency for business users of online intermediation services and online search engines in the Digital Single Market. Compared to the previous version we analyzed, the scope has been extended to include online search engines and comparison websites. There has been some modification concerning Ranking, with a new section on online search engines and additional safeguards regarding protecting trade secrets. The European Commission also added precision to the article on Access to data and the article on Internal complaint-handling system. The text will still likely be modified before the expected publication of the official text, expected on 25 April.
New leaked draft of the Proposal for a Directive on the Digital Service Tax and OECD Interim Report on ?Tax Challenges arising from Digitalization?
Ecommerce Europe received the leaked Directive on the Digital Services Tax (DST), which is expected to be published by the European Commission on 21 March. We are currently evaluating if our concerns have been addressed in this new version. To request a copy of the leaked document, please contact Luca Cassetti (email@example.com). On the same topic, on Friday 16 March, the OECD held a webinar to present their 2018 Interim Report on ?Tax Challenges arising from Digitalization?. During the presentation of the Interim Report, the Task Force on the Digital Economy of the OECD stressed that there was no consensus on the need for, or merit of, interim measures, and that therefore the report did not recommend their introduction. The OECD is aiming at proposing a consensus-based solution by 2020. You can find the full report and a summary of the report online.
Ecommerce Europe gathered more information on the package New Deal for Consumers
Ecommerce Europe has gathered additional details on the upcoming package New Deal for Consumers, which is supposed to be published by the European Commission on 11 April 2018. The package will include measures on penalties and changes to the Unfair Commercial Practices Directive, including the introduction by Member States of penalties for the violations of the consumer law and remedies for individual consumers for breaches of the UCPD. The package will also include changes to the Consumer Rights Directive, such as to the Right to withdrawal and the introduction of transparency rules for marketplaces, as well as introduce new measures on collective redress.
European Parliament adopted the Parcel Delivery Regulation
On 13 March, the European Parliament?s plenary adopted the interinstitutional agreement on the Regulation for cross-border parcel delivery services. The text now needs the endorsement of the Council of the EU and will become fully applicable in 2019. For more information, you can consult the European Parliament?s press release and you can find the final text of the Regulation here.
European Parliament adopted two resolutions on Corporate Tax Base
On 15 March, Members of the Parliament adopted two resolutions on the ?Common Consolidated Corporate Tax Base? and the ?Common Corporate Tax Base?, aiming at creating a single EU corporate tax regime and harmonized corporate tax system. The resolutions introduce the concept of ?Digital presence? and invite the Commission to prepare and set out benchmarks which would help identify whether a firm has a ?digital presence? within an EU Member State and is therefore liable for tax on the territory.
European Banking Authority published its roadmap on Fintech
On 15 March, the EBA published its roadmap on Fintech, setting out its priorities for 2018-2019 and focusing on monitoring the regulatory perimeter, including assessing current authorization and licensing approaches to FinTech firms; monitoring emerging trends and analyzing the impact on incumbent institutions' business models; promoting best supervisory practices on assessing cybersecurity and promoting a common cyber threat testing framework and addressing consumer issues arising from FinTech and identifying and assessing money laundering/terrorist financing risks.
Regulatory Technical Standards on Strong Customer Authentication have been published in the EU Official Journal
The Regulatory Technical Standards on ?strong customer authentication and common and secure open standards of communication? have been published in the EU Official Journal On 13 March. The Regulatory Technical Standards will apply in September 2019.
For an overview of the latest e-commerce related news from Brussels, please have a look at the attachment: Ecommerce Europe Monitoring 06-03 to 12-03.
This week, the Brussels team will start the preparation of the upcoming Working Committees meetings that will take place in Milan from 11-13 April. As usual, the team will keep performing public affairs and lobbying activities.
Please see below the policy highlights of the past week:
EU Commission President Juncker replies to Ecommerce Europe?s letter on the fair taxation of the digital economy
The President of the European Commission, Mr. Jean-Claude Juncker, thanked Ecommerce Europe for the letter we sent him on 5 March 2018 in relation to the Commission’s ongoing preparation of a measure for the fair and effective taxation of the digital economy and its potential negative impact on EU merchants. The Head of Cabinet, Ms. Clara Martinez Alberola, confirmed that the President has taken note of the content of the letter with attention and that the Member of the Commission responsible for Economic and Financial Affairs, Taxation and Customs, Mr. Pierre Moscovici, is looking into the points we have raised and will respond to us rapidly.
The Bulgarian Presidency published a revised text of the ePrivacy Regulation
Ahead of the next Working Party TELE meeting on 13 March, the Bulgarian Presidency of the Council of the EU published a revised text. The Presidency proposed amendments regarding the link to GDPR, ancillary services, machine-to-machine communication and consent. The Presidency also amended the article 1(3) to delete the phrase 'electronic communications' to signal that the ePrivacy regulation does not deal only with personal data that are electronic communications data but also with other types of personal data. The Presidency proposed elements for consideration regarding future discussion on permitted processing of metadata. The text reveals that some delegations expressed interest in exploring the option to expand the permitted processing of electronic communications metadata and the legality of such option. However, some delegations were satisfied with the current solutions, and a few others favored the introduction of legitimate interest in line with the GDPR.
The European Commission published its Action Plan on Fintech
On 8 March, the European Commission published its Action plan on Fintech that includes a series of initiatives aiming at supporting innovative business models to scale up, encourage the uptake of new technologies in the financial sector and increase cybersecurity. Based on the conclusion of the public consultation that ended in June 2017, the European Commission believes that the case for ?broad legislative or regulatory action or reform at EU level? on FinTech issues is limited, but that a number of targeted initiatives are warranted. The Commission plans, among other things, to report on challenges and opportunity of crypto assets later this year, and will work on comprehensive strategy on distributed ledger economy and blockchain. For more information, you can consult the Commission?s press releaseand the Action Plan.
EuroCommerce published a FAQ on the Geo-blocking Regulation
On 2 March, the Geo-blocking Regulation has been officially published in the Official Journal of the EU and will be applicable as of 3 December 2018. You can consult the official text here. During the past weeks, EuroCommerce gathered feedback from its members in order to developed a FAQ explaining the key rules applicable to the sector and giving concrete example to facilitate compliance. You are invited to send the FAQ document to your members as well.
The European Commission launched its internal inter-service consultation for the draft package New Deal for Consumers
On 5 March, the European Commission launched its internal inter-service consultation for the draft package New Deal for Consumers. The Commission aims at publishing the package on 11 April. According to the latest information we received, the package could include penalties for breaches of consumer law, individual remedies, restriction of commercial activity, a clarification of the right of withdrawal and collective redress.
The European Commission launched a call for experts for a group on liability and new technologies
On 9 March, the European Commission launched a call for expert for a group on liability and new technologies. The main tasks of the Expert Group will be to provide the Commission with expertise on the applicability of the Product Liability Directive to traditional products, new technologies and new societal challenges (Product Liability Directive formation) and, in light of an assessment of the existing liability schemes, assist the Commission in developing principles that can serve as guidelines for possible adaptations of applicable laws at EU and national level relating to new technologies (New Technologies formation). For more information, you can consult the press release. The deadline for application in 30 April 2018.
The European Commission launched a call for a High-level Expert Group on Artificial Intelligence
On 9 March, the European Commission launched a call to apply for a High-Level Expert Group on Artificial Intelligence. The general objective of the group shall be to support the implementation of the European strategy on AI. This will include the elaboration of recommendations on future AI-related policy development and on ethical, legal and societal issues related to AI, including socio-economic challenges. Ecommerce Europe will assess the need to submit an application. For more information, you can consult the Commission?s open call. The deadline for application is 9 April.
The European Parliament Research services have published a report on ?The collaborative economy and taxation?
The European Parliament Research services prepared a report addressed to Members and staff of the European Parliament on taxing the value created in the collaborative economy. This report will likely feed the discussion on the upcoming proposal on the Fair taxation of the digital economy that is expected to be published on 21 March. For more information, you can consult the report.
The European Commission published it 2017 Report on the Rapid Alert System
The European Commission published it 2017 report on the Rapid Alert System. The report shows that in 2017, the Rapid Alert System was increasingly used by national authorities with more than 2,000 alerts on dangerous products circulated through the system. For more information, you can consult the report.
For an overview of the latest e-commerce related news from Brussels, please have a look at the attachment: Ecommerce Europe Monitoring 27-02 to 05-03.
This week, the Brussels team will be attending some events and conferences. In particular, on 6 March, Senior Policy Advisor Léon Mölenberg will be a panelist in the Public Policy Exchange’s conference on „Enhancing Consumer Protection in the EU: Preserving Consumers? Rights in the Digital Society”. The discussion will focus, among other topics, on:
- The latest developments concerning the European legislative framework on consumer protection;
- How to better enforce consumer protection laws,
- Solutions for efficient and effective remedies against consumer rights infringements and
- New ways to integrate consumer interests into the Digital Space.
Furthermore, on 6 March, Communications Officer Laura Contin will be attending a conference in the European Parliament on „Women & Digital Jobs in Europe” that will focus on digital transformations and gender equality.
As usual, the Brussels team will continue performing public affairs and lobbying activities.
Please see below the policy highlights of the past week:
Ecommerce Europe writes to Commission President Juncker after seeing a leaked Commission text on the fair taxation of the digital economy
The news site Reuters published on 27 February a leaked version of the Commission partial draft on the Taxation of Digital Activities. The draft outlines proposals both for a long-term, comprehensive solution, and interim targeted solutions. The interim measure – supposed to apply while a comprehensive solution is negotiated – proposes the creation of a tax that would apply to companies with revenues above 750 million euros worldwide and with EU digital revenues of at least 10 million euros a year. The levy would be calculated on the ?aggregated gross revenues? of a business and should have a single EU rate ?in the region of 1-5 percent.? The scope includes firms selling user-targeted online ads, such as Google, or providing advertisement space on the internet, as well as digital marketplaces such as Amazon and gig economy giants. The proposal in expected to be published on 21 March, thus the text can still be modified.
Before preparing a comprehensive position paper on the question of Fair Taxation of the Digital Economy, based on further consultations with the members once the proposal will be published, Ecommerce Europe drafted a letter to Commission President Jean-Claude Juncker as an immediate and urgent action on the most worrying aspect of the leaked draft. In fact, based on the information we have and the preliminary analysis made by the Taxation and VAT Working Group of Ecommerce Europe, the Digital Services Tax (?DST?) that the Commission is preparing may have a direct detrimental effect on European merchants. The letter is specifically focusing on the fact that the tax would increase the cost base of European merchants compared to Chinese merchants, and the EU merchants would be at a cost disadvantage. The letter also indicates that we are considering different solutions and approaches with regard to the DST and its scope, to maintain some flexibility to further define our position once the proposal will be published. The letter was sent this afternoon.
European Commission published the results of its public consultation on Fair Taxation of the Digital Economy
The European Commission has recently published the outcome of its public consultation on the Fair Taxation of the Digital Economy. Respondents overwhelmingly agree on the need for action regarding current international rules for taxation of the digital economy. The survey shows the majority of stakeholders favours an international discussion and believes short-term solutions should be adopted until long-term measures are agreed upon. The results also show that respondents fear the adoption of uncoordinated measures by member states, that would lead to the fragmentation of the Single Market. You can find more information in TP Week?s article and consult the outcome on the Commission?s website for additional insights.
ECIPE published a report on ?Digital Companies and Their Fair Share of Taxes: Myths and Misconceptions?
In view of the upcoming Commission?s proposal, the European Center for International Political Economy published a paper on ?Digital Companies and Their Fair Share of Taxes: Myths and Misconceptions?. The paper provides a critical assessment of the underlying reasoning of the European Commission and those EU governments that currently are in favor of targeted taxes on digital revenues. The report outlines the risks of target tax on digital revenues, that ?not only stand in opposition to tax efficiency and neutrality; [but] would also undermine digitalization, European integration, and the Digital Single Market?.
European Commission published its Recommendation on the removal of illegal content
The European Commission published On 2 March a Recommendation on measures to effectively tackle illegal content online, proposing operational measures to ensure faster detection and removal of illegal content online, to reinforce the cooperation between companies, trusted flaggers and law enforcement authorities, and to increase transparency and safeguards for citizens. The proposal, originally designed to tackle terrorist content, will also apply to counterfeit products and copyright infringements. The recommendations will apply to all companies regardless of their size, and the Commission encourages the creation of voluntary arrangements to foster cooperation, exchange of best practices and technological solutions, to benefit smaller platforms. For more information, you can consult the Commission?s fact sheet.
European Commission published an Inception Impact Assessment on Illegal Content removal and opened a public consultation on the topic
In line with the publication of its Recommendation, the Commission published on 2 March an Inception Impact Assessment on ?Measures to further improve the effectiveness of the fight against illegal content?. The Inception Impact Assessment presents different options to tackle illegal content, such as sector-specific legislation(s) on certain types of illegal content, or horizontal legislation addressing targeted issues such as harmonization of notice and action procedures or measures related to proactive actions. The open consultation will run until 30 March. Ecommerce Europe will evaluate the need for a response. The consultation can be found here.
The European Commission opened a public consultation on the exchange of data to combat VAT fraud in the e-commerce
On 27 February, the Commission launched a public consultation on the ?Exchange of data to combat VAT fraud in the e-commerce?. This consultation aims at collecting different stakeholders opinion on the problem of VAT fraud in the field of e-commerce; on whether the current EU legal framework to fight VAT fraud provides the tax authorities in EU countries with the proper tools to fight VAT fraud in the field of e-commerce; whether a EU harmonized approach could provide for better tools to tax authorities as well as on the impact of the different policy options in terms of fighting fraud, regulatory costs and individuals rights. Ecommerce Europe will evaluate if there is a need for a joint response. You can consult the webpage of the consultation for more information and to contribute, if you wish.
EP IMCO Committee adopted its Report on the Sales of Goods Directive
On 22 February, the European Parliament?s IMCO Committee adopted the Report on the amended Proposal for a Directive on certain aspects concerning contracts for the sales of goods (Sales of Goods Directive), drafted by MEP Pascal Arimont. The Committee also adopted the decision to enter into interinstitutional negotiations as soon as the Council will adopt its position on the Directive. The report is available here.
Geo-blocking Regulation published on the EU Official Journal
The Geo-blocking Regulation was published on the EU Official Journal on 2 March. It will therefore apply as of 3 December 2018. You can consult the official text here.
A group of trade associations and platforms sent a letter to Commissioner Vestagger in regards to Google?s remedy following an infringement of EU competition law
Following the Commission?s decision to fine Google for abusing dominance as search engine by giving illegal advantage to own comparison shopping service in June 2017, a group of online platforms, associations and web shop have written a letter to the Commission for Competition, Margrethe Vestagger to complain about the remedy proposed by Google, which in their opinion continues to harm competition, consumers and innovation. You can consult the joint letter for additional information, as well as the case file of the Commission against Google search.
For an overview of the latest e-commerce related news from Brussels, please have a look at the attachment: Ecommerce Europe Monitoring 20-02 to 26-02.
This week, the Brussels team will be attending several events and conferences. On 27 February:
Director of Public Affairs Luca Cassetti will attend the GS1 Global Forum marketplace networking event where he will exchange views with delegated from around the world on best practices in the world of e-commerce.
Public Affairs Advisor on e-Payments Pascal König will speak at the Mobile World Congress in Barcelona. He will be a speaker in the panel on „The possibilities brought by PSD2: an open API economy accelerator”.
Senior Policy Advisor Léon Mölenberg will attend the EuroCommerce Internal Market Working Committee where the discussion will focus on the New Deal for Consumers, the latest updates on geo-blocking and the digital contracts proposals.
Juliette Beaulaton will attend the 2nd Annual Conference on ?Fintech and Digital Innovation: Regulation at the European level and beyond?. On the agenda, the role of artificial intelligence in financial services, the place for standard setting in Fintech, and how new technologies such as RegTech can contribute to the effective compliance and enforcement of financial services regulation.
On 1 March, Ecommerce Europe will welcome the members of the e-Regulations Working Committee for a Working Group on VAT and taxation (upon invitation only).
As usual, the Brussels team will continue performing public affairs activities.
Please see below the policy highlights of the past week:
The EP IMCO Committee adopted its Report on the Sales of Goods Directive
On 22 February, the European Parliament?s IMCO Committee adopted the Report on the amended Proposal for a Directive on certain aspects concerning contracts for the sales of goods (Sales of Goods Directive), drafted by MEP Pascal Arimont. The Committee also adopted the decision to enter into interinstitutional negotiations as soon as the Council will adopt its position on the Directive. The Report shows that the IMCO Committee clearly took into considerations some of our recommendations, which were shared also by other industry/business associations, with a few differences. Unfortunately, for some other elements, the Report fails in achieving a high degree of harmonization and does not clarify the scope of the Directive. Ecommerce Europe is now focusing is lobbying activities on the representative of the Member States, in view of the definition of the position of the Council. The Report is not yet available, but you can consult the European Parliament?s Press release and/or contact Luca Cassetti (firstname.lastname@example.org) for additional information.
Ecommerce Europe shared recommendations with the EP IMCO Committee Members in view of the vote on the Report on the Sales of Goods Directive
On 20 February, Ecommerce Europe sent an e-mail to the Members of the European Parliament?s IMCO Committee in view of the vote on the Draft Report of MEP Pascal Arimont on the Sales of Goods Directive, scheduled for tomorrow morning, to share our recommendations and concerns. We called on policymakers to support a fully harmonized approach for this directive, namely full harmonization of the legal guarantee period at 2 years all over the EU, and an alignment of rules for the sale of goods and the supply of digital content. As other EU industry associations, we also mentioned that 1 year for the reversal of the burden of proof would be a reasonable compromise and that commercial guarantees should remain a voluntary tool for producers.
The Bulgarian Presidency of the Council made public a new Discussion paper on the ePrivacy Regulation
The Bulgarian presidency published the Discussion paper that was examined during the Working Party TELE on 12 February. The Presidency discussion paper concerns Articles 2 (excluding some activities falling outside the scope of the e-Privacy Regulation) and article 11 (allowing the EU and Member States, under certain conditions, to restrict the rights and obligations provided in the ePrivacy regulation by means of legislative measures) of the proposal for a Regulation. The purpose of the discussion paper was to clarify the scope and link between article 2 and 11 as well as the list of general public interests referred to in Article 11(1) of the proposal. It sought delegations? opinion on several options to pursue the discussion.
The Council of the EU will approve the informal agreement on the Geo-blocking Regulation tomorrow
The Council will adopt the final version of the Geo-blocking Regulation during the General Affairs Council tomorrow morning. As the European Parliament already adopted the text on 7 February, it will now enter into force 20 days after its publication in the Official Journal of the European Union and will apply as from nine months after the publication. You can find here tomorrow?s Council of the EU agenda.
The trialogue negotiations on the Digital Content Directive move ahead despite remaining disagreements
On 21 February, the EP IMCO Rapporteur Evelyn Gebhardt reported back to the EP IMCO Committee on the last trialogue on the Digital Content Directive. The negotiations are moving smoothly on most of the issues, and the Rapporteur is still hoping to reach an informal agreement by mid-2018. However, negotiators are still having difficulties in reaching a compromise on several points, including the harmonization of the period for the reversal of the burden of proof and the extension of the scope to embedded digital content. MEP Gebhardt added that the European Parliament will continue to push for full harmonization as a key objective of the Directive. The next trialogue will take place on 6 March.
The EP JURI Committee held a hearing on Collective Redress
On 21 February, the EP JURI Committee invited the European Commission as well as representatives from BEUC and Business Europe to discuss the work of the Commission on collective redress so far and the upcoming revision of the Injunctions Directive. The Commission is exploring the idea of extending the scope, since consumer interests are protected not only by consumer law, but also by legislations in other areas, including energy, environment, telecom, financial services. Concerning the level of harmonization, the Commission wants to take into account the legal culture of each Member States, so it will try to introduce flexible instruments to ensure relevant safeguard, while maintaining Member States? freedom to keep their collective redress mechanisms.