ANNEX TO THE RESOLUTION:

RECOMMENDATIONS AS TO THE CONTENT OF THE PROPOSAL REQUESTED

I. GENERAL PRINCIPLES

The Digital Services Act package (‘DSA’) should contribute to the strengthening of the internal market by ensuring the free movement of digital services and the freedom to conduct a business, while at the same time guaranteeing a high level of consumer protection, and the improvement of users’ rights, trust and safety online.

The DSA should guarantee that online and offline economic activities are treated equally and that they are on a level playing field, which fully reflects the principle according to which ‘what is illegal offline is also illegal online’, taking into account the specific nature of the online environment.

The DSA should provide consumers and economic operators, especially micro, small and medium-sized enterprises, with legal certainty and transparency. The DSA should contribute to supporting innovation and removing unjustified and disproportionate barriers and restrictions to the provision of digital services.

The DSA should be without prejudice to the broad framework of fundamental rights and freedoms of users and consumers, such as the protection of private life and the protection of personal data, non-discrimination, dignity, the freedom of expression and the right to effective judicial remedy.

The DSA should build upon the rules currently applicable to online platforms, namely the E-Commerce Directive and the Platform to Business Regulation.

The DSA should include:

— a comprehensive revision of the E-Commerce Directive, based on Articles 53(1), 62 and 114 TFEU, consisting of: — a revised framework with clear obligations with regards to transparency and information; — clear and detailed procedures and measures related to effectively tackling and removing illegal content online, including a harmonised legally-binding European notice-and-action mechanism; — effective supervision, cooperation and proportionate, effective and dissuasive sanctions;

— an internal market legal instrument based on Article 114 TFEU, imposing ex ante obligations on large platforms with a gatekeeper role in the digital ecosystem (‘systemic operators’), complemented by an effective institutional enforcement mechanism.

II. SCOPE

In the interest of legal certainty, the DSA should clarify which digital services fall within its scope. The DSA should follow the horizontal nature of the E-Commerce Directive and apply not only to online platforms, but to all providers of information society services as defined in Union law.

A one-size-fits-all approach should be avoided. Different measures might be necessary for digital services offered in a purely business-to-business relationship, services which only have limited or no access to third parties or general public, and services which are targeted directly to consumers and the general public.

The territorial scope of the DSA should be extended to cover also the activities of companies, service providers and information society services established in third countries, when their activities are related to the offer of services or goods to consumers or users in the Union and directed at them.

If the Commission, following its review, considers that the DSA should amend the Annex of the E-Commerce Directive in respect of the derogations set out therein, it should not amend in particular the derogation of contractual obligations concerning consumer contracts.

The DSA should ensure that the Union and the Member States maintain a high level of consumer protection and that Member States can pursue legitimate public interest objectives, where it is necessary, proportionate and in accordance with Union law.

The DSA should define in a coherent way how its provisions interact with other legal instruments, aiming at facilitating free movement of services, in order to clarify the legal regime applicable to professional and non-professional services in all sectors, including activities related to transport services and short-term rentals, where clarification is needed.

The DSA should also clarify in a coherent way how its provisions interact with recently adopted rules on geo-blocking, product safety, market surveillance, platforms to business relations, consumer protection, sale of goods and supply of digital content and digital services (1), among others, and other announced initiatives such as the AI regulatory framework.

The DSA should apply without prejudice to the rules set out in other instruments, such as the GDPR, Directive (EU) 2019/790 (‘the Copyright Directive’) and Directive 2010/13/EU (‘the Audiovisual Media Services Directive’).

III. DEFINITIONS

In the definitions to be included therein, the DSA should:

— clarify to what extent new digital services, such as social media networks, collaborative economy services, search engines, WiFi hotspots, online advertising, cloud services, web hosting, messaging services, app stores, comparison tools, AI driven services, content delivery networks, and domain name services fall within its scope;

— clarify the nature of content hosting intermediaries (text, images, video, or audio content) on the one hand, and commercial online marketplaces (selling goods, including goods with digital elements, or services) on the other;

— clarify the difference between economic activities and content or transactions provided against remuneration, as defined by the Court, which also cover advertising and marketing practices on the one hand, and non-economic activities and content on the other;

— clarify what falls within the remit of the ‘illegal content’ definition by making it clear that a violation of Union rules on consumer protection, product safety or the offer or sale of food or tobacco products, cosmetics and counterfeit medicines, or wildlife products also falls within the definition of illegal content;

— define the term ‘systemic operator’ by establishing a set of clear indicators that allow regulatory authorities to identify platforms which enjoy a significant market position with a ‘gatekeeper’ role, thereby playing a systemic role in the online economy; such indicators could include considerations such as whether the undertaking is active to a significant extent on multi-sided markets or has the ability to lock-in users and consumers, the size of its network (number of users), and the presence of network effects; barriers to entry, its financial strength, the ability to access data, the accumulation and the combination of data from different sources; vertical integration and its role as an unavoidable partner and the importance of its activity for third parties’ access to supply and markets, etc.;

— seek to codify the decisions of the Court, where needed, and having due regard to the many different pieces of legislation which use those definitions.

IV. TRANSPARENCY AND INFORMATION OBLIGATIONS

The DSA should introduce clear and proportionate transparency and information obligations; those obligations should not create any derogations or new exemptions to the current liability regime set out under Articles 12, 13, and 14 of the E-Commerce Directive and should cover the aspects described below:

1. General information requirements

The revised provisions of the E-Commerce Directive should strengthen the general information requirements with the following obligations:

— the information requirements in Article 5 and Articles 6 and 10 of the E-Commerce Directive should be reinforced;

— the ‘Know Your Business Customer’ principle, limited to the direct commercial relationships of the hosting provider, should be introduced for business users; hosting providers should compare the identification data provided by their business users against the EU VAT and Economic Operator Identification and Registration (‘EORI’) databases, where a VAT or EORI number exists; where a business is exempt from VAT or EORI registration, proof of identification should be provided; when a business user is acting as an agent for other businesses, it should declare themselves as such; hosting providers should ask their business users to ensure that all information provided is accurate and up-to-date, subject to any change, and hosting providers should not be allowed to provide services to business users when that information is incomplete or when the hosting provider has been informed by the competent authorities that the identity of their business user is false, misleading or otherwise invalid;

— the measure of exclusion from services referred to above should apply only to contractual business-to-business relationships and should be without prejudice to the rights of data subjects under the GDPR. That measure should be without prejudice to the protection of online anonymity for users, other than business users. The new general information requirements should further enhance Articles 5, 6 and 10 of the E-Commerce Directive in order to align those measures with the information requirements established in recently adopted legislation, in particular Directive 93/13/EEC (2) (‘the Unfair Contract Terms Directive’), Directive 2011/83/EU (3) (‘the Consumer Rights Directive’) and the Platform to Business Regulation;

— Article 5 of the E-Commerce Directive should be further modernised by requiring digital service providers to provide consumers with direct and efficient means of communication such as electronic contact forms, chatbots, instant messaging or telephone callback, provided that the information relating to those means of communication is accessible to consumers in a clear and comprehensible manner;

2. Fair contract terms and general conditions

The DSA should establish minimum standards for service providers to adopt fair, accessible, non-discriminatory and transparent contract terms and general conditions in compliance, with at least the following requirements:

— to define clear and unambiguous contract terms and general conditions in a plain and intelligible language;

— to explicitly indicate in the contract terms and general conditions what is to be understood as illegal content or behaviour according to Union or national law and to explain the legal consequences to be faced by users for knowingly storing or uploading illegal content;

— to notify users whenever a significant change that can affect users’ rights is made to the contract terms and general conditions and to provide an explanation thereof;

— to ensure that pre-formulated standard clauses in contract terms and general conditions, which have not been individually negotiated in advance, including in End-User Licensing Agreements, start with a summary statement based on a harmonised template, to be set out by the Commission;

— to ensure that the cancellation process is as effortless as the sign-up process (with no ‘dark patterns’ or other influence on consumer decision);

— where automated systems are used, to specify clearly and unambiguously in their contract terms and general conditions the inputs and targeted outputs of their automated systems, and the main parameters determining ranking, as well as the reasons for the relative importance of those main parameters as compared to other parameters, while ensuring consistency with the Platforms-to-Business Regulation;

— to ensure that the requirements on contract terms and general conditions are consistent with and complement information requirements established by Union law, including those set out in the Unfair Contract Terms Directive, the Unfair Commercial Practices Directive, the Consumer Rights Directive, as amended by Directive (EU) 2019/2161, and with the GDPR;

3. Transparency requirements on commercial communications

— The revised provisions of the E-Commerce Directive should strengthen the current transparency requirements regarding commercial communications by establishing the principles of transparency-by-design and transparency-by-default.

— Building upon Article 6 and 7 of the E-Commerce Directive, the measures to be proposed should establish a new framework for Platform to Consumer relations on transparency as regards online advertising, digital nudging, micro targeting, recommendation systems for advertisement and preferential treatment; those measures should: — include the obligation to disclose clearly defined types of information about online advertisement to enable effective auditing and control, such as information on the identity of the advertiser and the direct and indirect payments or any other remuneration received by service providers; that should also enable consumers and public authorities to identify who should be held accountable in case of, for example, false or misleading advertisement; the measures should also contribute to ensuring that illegal activities cannot be funded via advertising services; — clearly distinguish between commercial and political online advertisement and ensure transparency of the criteria for the profiling targeted groups and the optimisation of advertising campaigns; enable consumers with a by default option not to be tracked or micro-targeted and to opt-in for the use of behavioural data for advertising purposes, as well as an opt-in option for political advertising and ads; — provide consumers with access to their dynamic marketing profiles, so that they are informed on whether and for what purposes they are tracked and if the information they receive is for advertising purposes, and guarantee their right to contest decisions that undermine their rights; — ensure that paid advertisements or paid placement in a ranking of search results should be identified in a clear, concise and intelligible manner, in line with Directive 2005/29/EC, as amended by Directive (EU) 2019/2161; — ensure compliance with the principle of non-discrimination and with minimum diversification requirements, and identify practices constituting aggressive advertising, whilst encouraging consumer-friendly AI-technologies; — introduce accountability and fairness criteria for algorithms used for targeted advertising and advertisement optimisation, and allow for external regulatory audits by competent authorities and for the verification of algorithmic design choices that involve information about individuals, without risk to violate user privacy and trade secrets; — provide access to advertising delivery data and information about the exposure of advertisers, when it comes to where and when advertisements are placed, and the performance of paid vs unpaid advertising;

4. Artificial Intelligence and machine learning

The revised provisions should follow the principles listed below regarding the provision of information society services which are enabled by AI or make use of automated decision-making tools or machine learning tools, by:

— ensuring that consumers have the right to be informed if a service is enabled by AI, makes use of automated decision-making or machine learning tools or automated content recognition tools, in addition to the right not to be subject to a decision based solely on automated processing and to the possibility to refuse, limit or personalise the use of any AI-enabled personalisation features, especially in view of ranking of services;

— establishing comprehensive rules on non-discrimination and transparency of algorithms and data sets;

— ensuring that algorithms are explainable to competent authorities who can check when they have reasons to believe that there is an algorithmic bias;

— providing for a case-by-case oversight and recurrent risk assessment of algorithms by competent authorities, as well as human control over decision-making, in order to guarantee a higher level of consumer protection; such requirements should be consistent with the human control mechanisms and risk assessment obligations for automating services set out in existing rules, such as Directive (EU) 2018/958 (4) (‘the Proportionality Test Directive’), and should not constitute an unjustified or disproportionate restriction to the free moment of services;

— establishing clear accountability, liability and redress mechanisms to deal with potential harms resulting from the use of AI applications, automated decision-making and machine learning tools;

— establishing the principle of safety, security by design and by default and setting out effective and efficient rights and procedures for AI developers in instances where the algorithms produce sensitive decisions about individuals, and by properly addressing and exploiting the impact of upcoming technological developments;

— ensuring consistency with confidentiality, user privacy and trade secrets;

— ensuring that, when AI technologies introduced at the workplace have direct impacts on employment conditions of workers using digital services, there needs to be an comprehensive information to workers;

5. Penalties

The compliance to those provisions should be reinforced with effective, proportionate and dissuasive penalties, including the imposition of proportionate fines.

V. MEASURES RELATED TO TACKLING ILLEGAL CONTENT ONLINE

The DSA should provide clarity and guidance regarding how online intermediaries should tackle illegal content online. The revised rules of the E-Commerce Directive should:

— clarify that any removal or disabling access to illegal content should not affect the fundamental rights and the legitimate interests of users and consumers and that legal content should stay online;

— improve the legal framework taking into account the central role played by online intermediaries and the internet in facilitating the public debate and the free dissemination of facts, opinions, and ideas;

— preserve the underlying legal principle that online intermediaries should not be held directly liable for the acts of their users and that online intermediaries can continue moderating content under fair, accessible, non-discriminatory and transparent terms and conditions of service;

— clarify that a decision made by online intermediaries as to whether content uploaded by users is legal should be provisional, and that online intermediaries should not be held liable for it, as only courts of law should decide in the final instance what is illegal content;

— ensure that the ability of Member States to decide which content is illegal under national law is not affected;

— ensure that the measures online intermediaries are called to adopt are proportionate, effective and adequate in order to effectively tackle illegal content online;

— adapt the severity of the measures that need to be taken by service providers to the seriousness of the infringement;

— ensure that the blocking of access to, and the removal of, illegal content does not require blocking the access to an entire platform and services which are otherwise legal;

— introduce new transparency and independent oversight of the content moderation procedures and tools related to the removal of illegal content online; such systems and procedures should be accompanied by robust safeguards for transparency and accountability and be available for auditing and testing by competent authorities.

1. A notice-and-action mechanism

The DSA should establish a harmonised and legally enforceable notice-and-action mechanism based on a set of clear processes and precise timeframes for each step of the notice-and-action procedure. That notice-and-action mechanism should:

— apply to illegal online content or behaviour;

— differentiate among different types of providers, sectors and/or illegal content and the seriousness of the infringement;

— create easily accessible, reliable and user-friendly procedures tailored to the type of content;

— allow users to easily notify by electronic means potentially illegal online content or behaviour to online intermediaries;

— clarify, in an intelligible way, existing concepts and processes such as ‘expeditious action’, ‘actual knowledge and awareness’, ‘targeted actions’, ‘notices’ formats’, and ‘validity of notices’;

— guarantee that notices will not automatically trigger legal liability nor should they impose any removal requirement, for specific pieces of the content or for the legality assessment;

— require notices to be sufficiently precise and adequately substantiated so as to allow the service provider receiving them to take an informed and diligent decision as regards the effect to be given to the notice, and specify the requirements necessary to ensure that notices contain all the information necessary for the swift removal of illegal content;

— notices should include the location (URL and timestamp, where appropriate) of the allegedly illegal content in question, an indication of the time and date when the alleged wrongdoing was committed, the stated reason for the claim, including an explanation of the reasons why the notice provider considers the content to be illegal, and if necessary, depending on the type of content, additional evidence for the claim, and a declaration of good faith that the information provided is accurate;

— notice providers should have the possibility, but not be required, to include their contact details in a notice; where they decide to do so, their anonymity should be ensured towards the content provider; if no contact details are provided, the IP address or other equivalent can be used; anonymous notices should not be permitted when they concern the violation of personality rights or intellectual property rights;

— set up safeguards to prevent abusive behaviour by users who systematically, repeatedly and in bad faith submit wrongful or abusive notices;

— create an obligation for the online intermediaries to verify the notified content and reply in a timely manner to the notice provider and to the content uploader with a reasoned decision; such a requirement to reply should include the reasoning behind the decision, how the decision was made, if the decision was made by a human or an automated decision agent, and information about the possibility to appeal the decision by either party, with the intermediary, courts or other entities;

— provide information and remedies to contest the decision via a counter-notice, including if the content has been removed via automated solutions, unless such a counter-notice would conflict with an ongoing investigation by law enforcement authorities;

— safeguard that judicial injunctions issued in a Member State other than that of the online intermediaries should not be handled within the notice-and-action mechanism.

The DSA notice-and-action mechanism should be binding only for illegal content. That, however, should not prevent online intermediaries from being able to adopt a similar notice-and-action mechanism for other content.

2. Out-of-court dispute settlement related with the notice-and-action mechanisms

— The decision taken by the online intermediary on whether or not to act upon content flagged as illegal should contain a clear justification on the actions undertaken regarding that specific content. The notice provider should receive a confirmation of receipt and a communication indicating the follow-up given to the notification;

— The providers of the content that is being flagged as illegal should be immediately informed of the notice and, that being the case, of the reasons and decisions taken to remove, suspend or disable access to the content; all parties should be duly informed of all existing available legal options and mechanisms to challenge this decision;

— All interested parties should have the right to contest the decision through a counter-notice which must be subject to clear requirements and accompanied by an explanation; interested parties should also have recourse to out-of-court dispute settlement mechanisms;

— The right to be notified and the right to issue a counter-notice by a user before a decision to remove content is taken shall only be restricted or waived, where: (a) online intermediaries are subject to a national legal requirement that online intermediation services terminate the provision of the whole of its online intermediation services to a given user, in a manner which does not allow it to respect that notice-and-action mechanism; or, (b) the notification or counter-notice would impede an ongoing criminal investigation that requires to keep the decision to suspend or remove access to the content a secret.

— The rules of Article 17 of the E-Commerce Directive should be revised to ensure that independent out-of-court dispute settlement mechanisms are put in place and are available to users in the event of disputes over the disabling of access to, or the removal of, works or other subject matter uploaded by them;

— The out-of-court dispute settlement mechanism should meet certain standards, in particular in terms of procedural fairness, independence, impartiality, transparency and effectiveness; such mechanisms shall enable disputes to be settled impartially and shall not deprive the user of legal protection afforded by national law, without prejudice to the rights of users to have recourse to efficient judicial remedies;

— If the redress and counter-notice have established that the notified activity or information is not illegal, the online intermediary should restore the content that was removed or suspended without undue delay or allow for re-upload by the user;

— When issuing, contesting or receiving a notice, all interested parties should be notified of both the possibility of making use of an alternative dispute resolution mechanism and of the right to recourse to a competent national court;

— The out-of-court dispute settlement mechanisms should in no way affect the rights of the parties involved to initiate legal proceedings.

3. Transparency of the notice-and-action mechanism

The notice-and-action mechanisms should be transparent and publicly available; to that end, online intermediaries should be obliged to publish annual reports, which should be standardised and contain information on:

— the number of all notices received under the notice-and-action mechanism and the types of content they relate to;

— the average response time per type of content;

— the number of erroneous takedowns;

— the type of entities that issued the notices (private individuals, organisations, corporations, trusted flaggers, etc.) and the total number of their notices;

— information about the nature of the content’s illegality or the type of infringement for which it was removed;

— the number of contested decisions received by online intermediaries and how they were handled;

— the description of the content moderation model applied by the hosting intermediary, as well as of any automated tools, including meaningful information about the logic involved;

— the measures they adopt with regards to repeated offenders to ensure that those are effective in tackling such systemic abusive behaviour.

The obligation to publish that report and the detail it requires should take into account the size or the scale on which online intermediaries operate and whether they have only limited resources and expertise. Microenterprises and start-ups should be required to update this report only where there is significant change from one year to the next.

Online intermediaries should also publish information about their procedures and timeframes for intervention by interested parties, such as the time for the content uploader to respond with a counter-notification, the time at which the intermediary will inform both parties about the result of the procedure, and the time for different forms of appeal against any decision.

4. Safe harbour provisions in Article 12, 13 and 14 of the E-Commerce Directive

The DSA should protect and uphold the current limited exemptions from liability for information society service providers (online intermediaries) provided for in Article 12, 13, and 14 of the E-Commerce Directive.

5. Active and Passive hosts

The DSA should maintain the derogations in the E-Commerce Directive for intermediaries playing a neutral and passive role and address the lack of legal certainty regarding the concept of ‘active role’ by codifying the case-law of the Court on that matter. It should also clarify that the hosting providers play an active role when creating the content or contributing to a certain degree to the illegality of the content, or if it amounts to adoption of the third-party content as one’s own, as judged by average users or consumers.

It should ensure that voluntary measures taken by online intermediaries to address illegal content should not lead to them being considered as having an active role, solely on the basis of those measures. However, the deployment of any such measures should be accompanied with appropriate safeguards and content moderation practices should be fair, accessible, non-discriminatory and transparent.

The DSA should maintain the exemptions from liability for backend and infrastructure services, which are not party to the contractual relations between online intermediaries and their customers and which merely implement decisions taken by the online intermediaries or their customers.

6. Ban on General Monitoring — Article 15 of the E-Commerce Directive

The DSA should maintain the ban on a general monitoring obligation under Article 15 of the E-Commerce Directive. Online intermediaries should not be subject to general monitoring obligations.

VI. ONLINE MARKETPLACES

The DSA should propose specific new rules for online marketplaces, for the online sale, promotion or supply of products and for the provision of services to consumers.

Those new rules should:

— be consistent with, and complementary to, a reform of the General Product Safety Directive;

— cover all entities that offer and direct services and/or products to consumers in the Union, including if they are established outside the Union;

— distinguish online marketplaces from other types of service providers, including other ancillary intermediation activities within the same company activity; if one of the services provided by a company fulfils the criteria necessary to be considered as a marketplace, the rules should fully apply to that part of the business regardless of the internal organisation of that company;

— ensure that online marketplaces make it clear from which country the products are sold or services are being provided, regardless whether they are provided or sold by that marketplace, a third party or a seller established inside or outside the Union;

— ensure that online marketplaces remove quickly any known misleading information given by the supplier, including misleading implicit guarantees and statements made by the supplier;

— ensure that online marketplaces, offering professional services, indicate when a profession is regulated within the meaning of Directive 2005/36/EC, in order to enable consumers to make both an informed choice and to verify, where necessary, with the relevant competent authority if a professional meets the requirements for a specific professional qualification;

— ensure that online marketplaces are transparent and accountable and cooperate with the competent authorities of the Member States in order to identify, where serious risks of dangerous products exist and to alert them as soon as they become aware of such products on their platforms;

— ensure that online marketplaces consult the Union Rapid Alert System for dangerous non-food products (RAPEX) and carry out random checks on recalled and dangerous products and, wherever possible, take appropriate action in respect to products concerned;

— ensure that once products have been identified as unsafe and/or counterfeit by the Union’s rapid alert systems, by national market surveillance authorities, by customs authorities or by consumer protection authorities, it should be compulsory to remove products from the marketplace expeditiously and maximum within two working days of receiving notification;

— ensure that online marketplaces inform consumers once a product they bought therein has been removed from their platform following a notification on its non-compliance with Union product safety and consumer protection rules; they should also inform consumers of any safety issues and of any action required to ensure that recalls are carried out effectively;

— ensure that online marketplaces put in place measures to act against repeat offenders who offer dangerous products, in cooperation with authorities in line with the Platform to Business Regulation, and that they adopt measures aimed at preventing the reappearance of dangerous product, which had been already removed;

— consider the option of requiring suppliers which are established in a third country to set up a branch in the Union or designate a legal representative established in the Union, who can be held accountable for the selling of products or services which do not comply with Union rules of safety to European consumers;

— address the liability of online marketplaces for consumer damages and for failure to take adequate measures to remove illegal products after obtaining the actual knowledge of such illegal products;

— address the liability of online marketplaces when those platforms have predominant influence over suppliers and essential elements of economic transactions, such as payment means, prices, default terms conditions, or conduct aimed at facilitating the sale of goods to a consumer in the Union market, and there is no manufacturer, importer, or distributor established in the Union that can be held liable;

— address the liability of online marketplaces if the online marketplace has not informed the consumer that a third party is the actual supplier of the goods or services, thus making the marketplace contractually liable vis-à-vis the consumer; liability should also be considered in case the marketplace knowingly provides misleading information;

— guarantee that online marketplaces have the right to redress towards a supplier or producer at fault;

— explore expanding the commitment made by some e-commerce retailers and the Commission to respectively remove dangerous or counterfeit products from sale more rapidly under the voluntary commitment schemes called ‘Product Safety Pledge’ and ‘Memorandum of Understanding on the sale of counterfeit goods via the internet’ and indicate which of those commitments could become mandatory.

VII. EX ANTE REGULATION OF SYSTEMIC OPERATORS

The DSA should put forward a proposal for a new separate instrument aiming at ensuring that the systemic role of specific online platforms will not endanger the internal market by unfairly excluding innovative new entrants, including SMEs, entrepreneurs and start-ups, thereby reducing consumer choice;

To that end, the DSA should, in particular:

— set up an ex ante mechanism to prevent (instead of merely remedy) market failures caused by ‘systemic operators’ in the digital world, building on the Platform to Business Regulation; such a mechanism should allow regulatory authorities to impose remedies on systemic operators in order to address market failures, without the establishment of a breach of competition rules;

— empower regulatory authorities to impose proportionate and well-defined remedies on those companies which have been identified as ‘systemic operators’, based on criteria set out within the DSA and a closed list of the positive and negative actions those companies are required to comply with and/ or are prohibited from engaging in; in its impact assessment, the Commission should make a thorough analysis of the different issues observed on the market so far, such as: — the lack of interoperability and appropriate tools, data, expertise, and resources deployed by systemic operators to allow consumers to switch or connect and interoperate between digital platforms or internet ecosystems; — the systematic preferential display, which allows systemic operators to provide their own downstream services with better visibility; — data envelopment used to expand market power from one market into adjacent markets, incurring in self-preferencing of their own products and services and engaging in practices aimed at locking-in consumers; — the widespread practice of banning third-party business users from steering consumers to their own website through the imposition of contractual clauses; — the lack of transparency of recommendation systems used by systemic operators, including of the rules and criteria for the functioning of such systems;

— ensure that systemic operators are given the possibility to demonstrate that the behaviour in question is justified;

— clarify that some regulatory remedies should be imposed on all ‘systemic operators’, such as transparency obligations in the way they conduct business, in particular how they collect and use data, and a prohibition for ‘systemic operators’ to engage in any practices aimed at making it more difficult for consumers to switch or use services across different suppliers, or other forms of unjustified discrimination that exclude or disadvantage other businesses;

— empower regulatory authorities to adopt interim measures and to impose penalties on ‘systemic operators’ that fail to respect the different regulatory obligations imposed on them;

— reserve the power to ultimately decide if an information society service provider is a ‘systemic operators’ to the Commission, based on the conditions set out in the ex ante mechanism;

— empower users of ‘systemic operators’ to be informed, to deactivate and be able to effectively control and decide what kind of content they want to see; users should also be properly informed of all the reasons why specific content is suggested to them;

— ensure that the rights, obligations and principles of the GDPR — including data minimisation, purpose limitation, data protection by design and by default, legal grounds for processing — are observed;

— ensure appropriate levels of interoperability requiring ‘systemic operators’ to share appropriate tools, data, expertise, and resources deployed in order to limit the risks of users and consumers’ lock-in and the artificially binding users to one systemic operator with no realistic possibility or incentives for switching between digital platforms or internet ecosystems as part of those measures, the Commission should explore different technologies and open standards and protocols, including the possibility of a technical interface (Application Programming Interface) that allows users of competing platforms to dock on to the systemic operators and exchange information with it; systemic operators may not make commercial use of any of the data that is received from third parties during interoperability activities for purposes other than enabling those activities; interoperability obligations should not limit, hinder or delay the ability of intermediaries to patch vulnerabilities;

— ensure that the new ex ante mechanism is without prejudice to the application of competition rules, including on self-preferencing and overall vertical integration, and ensure that both policy tools are completely independent.

VIII. SUPERVISION, COOPERATION AND ENFORCEMENT

The DSA should improve supervision and enforcement of the existing rules and strengthen the internal market clause as the cornerstone of the Digital Single Market, by complementing it with a new cooperation mechanism aimed at improving the exchange of information, the cooperation and mutual trust and, upon request, mutual assistance between Member States, in particular between the authorities in the home country where the service provider is established and the authorities in the host country where the provider is offering its services.

The Commission should conduct a thorough impact assessment to assess the most appropriate supervision and enforcement model for the application of the provisions regarding the DSA, while respecting the principles of subsidiarity and proportionality.

In its impact assessment, the Commission should look into existing models, such as the Consumer Protection Cooperation (CPC) Network, the European Regulators Group for Audiovisual Media Services (ERGA), the European Data Protection Board (EDBP) and the European Competition Network (ECN), and consider the adoption of a hybrid system of supervision.

That hybrid system of supervision, based on EU coordination in cooperation with a network of national authorities, should improve the monitoring and application of the DSA, enforce compliance, including enforcing regulatory fines, other sanctions or measures, and should be able to carry out auditing of intermediaries and platforms. It should also settle, where needed, cross-border disputes between the national authorities, address complex cross-border issues, provide advice and guidance and approve Union-wide codes and decisions, and, together with the national authorities, it should be able to launch initiatives and investigations into cross-border issues. The ultimate oversight of the Member States’ obligations should remain with the Commission.

The Commission should report to the European Parliament and the Council, and, together with the national authorities, maintain a public ‘Platform Scoreboard’ with relevant information on the compliance with the DSA. The Commission should facilitate and support the creation and maintenance of a European research repository tool to facilitate the sharing of data with public institutions, researchers, NGOs and universities for research purposes.

The DSA should also introduce new enforcement elements into Article 16 of the E-Commerce Directive as regards self-regulation.

(1) Rules provided for in Directive (EU) 2019/770 and Directive (EU) 2019/771.

(2) Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, most recently amended by Directive (EU) 2019/2161 of the European Parliament and of the Council of 27 November 2019 amending Council Directive 93/13/EEC and Directives 98/6/EC, 2005/29/EC and 2011/83/EU of the European Parliament and of the Council as regards the better enforcement and modernisation of Union consumer protection rules (OJ L 328, 18.12.2019, p. 7).

(3) Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council (OJ L 304, 22.11.2011, p. 64).

(4) Directive (EU) 2018/958 of the European Parliament and of the Council of 28 June 2018 on a proportionality test before adoption of new regulation of professions (OJ L 173, 9.7.2018, p. 25).