COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Online Platforms and the Digital Single Market Opportunities and Challenges for Europe
Date: 2016-05-25
Institutions: Directorate-General for Communications Networks, Content and Technology, European Commission
Subjects: approximation of laws, computer applications, cross-border cooperation, data protection, digital technology, electronic commerce, information technology applications, innovation, regulation of telecommunications, single market

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 25.5.2016  COM(2016) 288 final   COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Online Platforms and the Digital Single Market Opportunities and Challenges for Europe {SWD(2016) 172 final}  
 
 
1. INTRODUCTION 

Online platforms have dramatically changed the digital economy over the last two decades 
and bring many benefits in today's digital society. They play a prominent role in the creation 
of 'digital value' that underpins future economic growth in the EU and consequently are of 
major importance to the effective functioning of the digital single market. 

In  a  Communication  setting  out  a  strategy  for  the  digital  single  market  (DSM),1  the 
Commission committed to undertake a comprehensive assessment of the role of platforms, 
including  in  the  sharing  economy,  and  of  online  intermediaries.  Subsequently,  the 
Commission  has  conducted  a  series  of  workshops  and  studies2  and  a  wide-ranging  public 
consultation, which attracted a high number of responses. 

The objective of this Communication is twofold: 

1.  To outline the key issues identified in the assessment of online platforms. 
2.  To present the Commission’s position on both the innovation opportunities and the 
regulatory  challenges  presented  by  online  platforms,  and  to  set  out  its  approach  to 
supporting their further development in Europe.  

This Communication is accompanied by a Staff Working Document and synopsis report on 
the  results  of  the  public  consultation  which  provide  additional  analysis  and  evidence  in 
support of the proposals which follow below.3  

2. THE GROWING IMPORTANCE OF ONLINE PLATFORMS IN THE DIGITAL ECONOMY 

Online platforms come in various shapes and sizes and continue to evolve at a pace not seen 
in  any  other  sector  of  the  economy.  Presently,  they  cover  a  wide-ranging  set  of  activities 
including4  online  advertising  platforms,  marketplaces,  search  engines,  social  media  and 
creative  content  outlets,  application  distribution  platforms,  communications  services, 
payment systems, and platforms for the collaborative economy. 

Online platforms share some important and specific characteristics. In particular:  

they have the ability to create and shape new markets, to challenge traditional ones, and 
to  organise  new  forms  of  participation  or  conducting  business  based  on  collecting, 
processing, and editing large amounts of data; 

they  operate  in  multisided  markets  but  with  varying  degrees  of  control  over  direct 
interactions between groups of users; 

they benefit from ‘network  effects’, where,  broadly speaking, the value of the service 
increases with the number of users;  

COM(2015) 192 final. 
These include an economic study of online platforms by the Commission’s Joint Research Centre, two Eurobarometer studies on the 
impact  of  online  platforms,  a  hearing  on  online  platforms  organised  by  the  European  Political  Strategy  Centre,  as  well  as  the 
conclusions of numerous interactions with academics and stakeholders that fed into the Commission Staff Working Document that 
accompanies the present Communication. Additional studies will follow in the second half of 2016. 
SWD(2016) 172 final. 

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4   Non-exhaustive  set  of  examples:  Google’s  AdSense,  DoubleClick,  eBay  and  Amazon  Marketplace,  Google  and  Bing  Search, 

Facebook and YouTube, Google Play and App Store, Facebook Messenger, PayPal, Zalando marketplace and Uber. 

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they  often  rely  on  information  and  communications  technologies  to  reach  their  users, 
instantly and effortlessly;  

they  play  a  key  role  in  digital  value  creation,  notably  by  capturing  significant  value 
(including through data accumulation), facilitating new business ventures, and creating 
new strategic dependencies. 

These features of online platforms have brought a range of important benefits to the digital 
economy and society. Online platforms facilitate efficiency gains, and act as a magnet for 
data-driven innovation.5 They increase consumer choice, thereby contributing to improved 
competitiveness of industry and enhancing consumer welfare.  

Online  platforms  also  offer  the  potential  to  enhance  citizens'  participation  in  society  and 
democracy,  as  they  facilitate  access  to  information,  in  particular  for  younger  generations6 
and across borders7. 

However, the growing importance of the digital economy linked with the diversity and fast-
changing  nature  of  platform  ecosystems  also  raise  new  policy  and  regulatory  challenges. 
This  Communication  addresses  both  the innovation  and  growth  dimension,  as  well  as  any 
regulatory challenges. 

3.  SETTING  THE  RIGHT  ENVIRONMENT  TO  ATTRACT,  RETAIN  AND  GROW  NEW  ONLINE 
PLATFORM INNOVATORS 

A number of globally competitive platforms originated in Europe, for example Skyscanner 
and  BlaBlaCar.  However,  on  the  whole,  the  EU  currently  represents  only  4%  of  the  total 
market capitalisation of the largest online platforms: the vast majority of platforms originate 
in the US and Asia.8 

The  platform  economy  presents  major  innovation  opportunities  for  European  start-ups,  as 
well  as  for  established  market  operators  to  develop  new  business  models,  products  and 
services.  Europe  has  a  thriving  start-up  community  with  dynamic  entrepreneurs  targeting 
new  opportunities  in  the  collaborative  economy,  energy,  health,  banking,  creative  content 
and  beyond.  As  an  illustration,  apps  made  by  European  developers  account  for  30%  of 
global revenue in the leading application distribution platforms.9 

Creating  the  right  framework  conditions  and  the  right  environment  is  essential  to  retain, 
grow and foster the emergence of new online platforms in Europe. 

First and foremost this involves creating a functional digital single market, breaking down 
barriers to  allow  businesses  to  enter  and  scale-up  fast  in  Europe  and  not  move  elsewhere. 

5   On  the  opportunities  offered  by  data-drive  innovation,  see  also  European  Commission  Communication  ‘Towards  a  thriving  data-

6  

driven economy’, COM(2014) 442 final. 
See  details  in  Report  on  2015  public  consultation  on  «EU  Citizenship:  Share  your  opinion  on  our  common  values,  rights  and 
democratic  participation»  (available  at  http://ec.europa.eu/justice/citizen/document/files/2015_public_consultation_booklet_en.pdf), 
page  10.  The  by  far  biggest  group  among  the  2.170  respondents  were  young  people  aged  18-30  (29%).  See  also:  Eurobarometer 
survey on media use in the EU – Fall 2014. 

7   Nine out of 10 respondents (91%) to the public consultation on EU Citizenship believed that access to political information across 

borders would allow EU citizens to form clearer opinions on issues relevant to democracy in Europe. 
http://ec.europa.eu/justice/citizen/document/files/2015_public_consultation_booklet_en.pdf), page 10. 
See SWD(2016) 172 final. 
Plum (2016), A policy toolkit for the app economy — where online meets offline. 

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9  

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The forthcoming European agenda for the collaborative economy will in this respect already 
provide  guidance  on  applicable  EU  legislation  and  make  recommendations  for  Member 
States, with the aim of supporting a balanced development of the collaborative economy. 

The recently adopted strategy to digitise European industry10 identifies a series of measures 
that  help  to  advance  these  ambitions.  They  include  investment  in  world-class  data  and 
computing  infrastructure  for  science  and  innovation,  with  an  estimated  investment  of 
EUR 50 billion  of  public  and  private  funds  to  upgrade  Europe’s  digital  innovation 
capacities. There are also measures included in this package for a streamlined approach to 
standardisation 
the  necessary  cross-border  and  cross-domain 
interoperability. 

that  aims 

to  foster 

A  number  of  ongoing  initiatives  in  the  research  arena  and  other  specific  funding  actions 
already aim to help the emergence of innovative platform-based ecosystems. These include 
the  provision  of  high-speed  internet  access  across  the  EU11  and  support  for  open  service 
platforms12.  In  this  context,  the  Commission  sees  the  need  to  start  a  reflection  on  how  to 
shape  the  future  internet  as  a  powerful,  open,  user-centric,  interoperable  platform 
ecosystem, in particular with the support of Horizon 2020.13 

Finally,  projects  like  the  Startup  Europe  initiative14  provide  advice  and  funding,  thereby 
promoting opportunities for start-ups to experiment and scale-up.  

In  all, online platforms  foster digital  value creation that will generate economic growth in 
the  digital  single  market.  Their  importance  implies  that  facilitating  and  supporting  the 
emergence of competitive EU-based platforms is both an economic and strategic imperative 
for Europe. 

4.  A  BALANCED  REGULATORY  FRAMEWORK  FOR  ONLINE  PLATFORMS  IN  THE  DIGITAL 
SINGLE MARKET 

The  right  regulatory  framework  for  the  digital  economy  must  be  conducive  to  furthering 
sustainable development and scaling-up of the platform business model in Europe.  

Firstly,  in  order  for  Europe  to  reap  the  full  benefits  from  the  platform  economy  and 
stimulate growth in European platform start-ups, self-evidently, there cannot be 28 different 
sets of rules for online platforms in a single market. Differing national or even local rules 
for  online  platforms  create  uncertainty  for  economic  operators,  limit  the  availability  of 
digital  services,  and  generate  confusion  for  users  and  businesses.  Harmonised  rules  at  EU 
level  such  as  the  recently  adopted  General  Data  Protection  Regulation15  and  the  Network 

10   See: European Commission Communication ‘Digitising European Industry — Reaping the full benefits of a Digital Single Market’, 

COM(2016) 180 final. 

11   Digital infrastructure is one of the sectors of key importance identified as a focus for the European Fund for Strategic Investments, 
see: http://www.eib.org/efsi/what-is-efsi/index.htm. Innovation and research, and the digital agenda are also two of the four priority 
areas 
see: 
under 
http://ec.europa.eu/regional_policy/en/funding/erdf/. 

the  European  Regional  Development  Fund, 

infrastructure) 

investment 

(including 

for 

in 

12   One example is the open-source FIWARE software ecosystem project supported by the EU’s Future Internet project. Its mission is 
‘to build an open sustainable ecosystem around public, royalty-free and implementation-driven software platform standards that will 
ease the development of new Smart Applications in multiple sectors’. https://www.fiware.org/.  

13   The Commission will initiate work on the elements of a next-generation internet research initiative, including a public consultation. 
14   See: https://ec.europa.eu/digital-single-market/en/startup-europe. 
15   Regulation (EU) 2016/679. 

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and Information Security Directive16 are important to facilitate growth and rapid scaling up 
of innovative platforms. 

Secondly,  online  platforms  are  subject  to  existing  EU  rules  in  areas  such  as  competition, 
consumer  protection,  protection  of  personal  data  and  single  market  freedoms.  Compliance 
with these rules by all including platforms is essential to ensure that all players can compete 
fairly. This will create trust for both businesses and the general public to confidently engage 
with online platforms.  

Effective  enforcement  is  crucial.  The  cross-border  nature  of  platforms  means  that 
enforcement requires good cooperation between relevant authorities, such as that envisaged 
in the reform of the Regulation on Consumer Protection Cooperation17 and as provided for 
in  the  General  Data  Protection  Regulation.  The  ability  of  public  authorities  to  respond 
effectively  to  new  and  possibly  disruptive  market  and  technological  developments  and 
business models will also be critical. This could include investment in new technology that 
supports public action, including big data analytics, to gather more detailed information on 
online  platforms  ecosystems18,  as  part  of  broader  measures  to  ensure  a  data-driven  public 
sector.19 The Commission will explore further, together with Member States and platforms, 
how these objectives might best be achieved. 

Thirdly,  the  need  to  foster  the  innovation-promoting  role  of  platforms  requires  that  any 
future  regulatory  measures  proposed  at  EU  level  only  address  clearly  identified  problems 
relating  to  a  specific  type  or  activity  of  online  platforms  in  line  with  better  regulation 
principles.  Such  problem-driven  approach  should  begin  with  an  evaluation  of  whether  the 
existing framework is still appropriate. The collaborative economy is a good example where 
rules designed with traditional and often local service provision in mind may impede online 
platform  business  models.  This  issue  will  be  addressed  in  the  forthcoming  Commission 
Communication on the collaborative economy. 

Finally,  principles-based20  self-regulatory/co-regulatory  measures,  including  industry  tools 
for ensuring application of legal requirements and appropriate monitoring mechanisms, can 
play  a  role.  Underpinned  by  appropriate  monitoring  mechanisms,  they  can  strike  the  right 
balance between predictability, flexibility, efficiency, and the need to develop future-proof 
solutions. 

As  a  general  rule,  when  elaborating  responses  to  issues  related  to  online  platforms,  the 
Commission will take the following principles into account: 

-  a level playing field for comparable digital services; 

-  responsible behaviour of online platforms to protect core values; 

-  transparency and fairness for maintaining user trust and safeguarding innovation; 

-  open and non-discriminatory markets in a data-driven economy. 

16   Agreed  by  the  European  Parliament  and  Council  on  7  December  2015,  following  the  Commission's  proposal  from  2013: 

COM/2013/048 final - 2013/0027 (COD). 

17   Regulation (EU) 2006/2004. 
18   See the JRC/IPTS Digital Economy Working Paper "An economic policy perspective on online platforms", 2016.  
19   OECD Ministerial Declaration Helsinki 2015: "We look forward to the strategic use of new digital tools and of Big Data to enable a 

data-driven public sector", see: http://www.oecd.org/governance/ministerial/chair-summary-2015.pdf. 

20   The  Commission  has  published  best  practice  principles  at  https://ec.europa.eu/digital-single-market/en/news/principles-better-self-

and-co-regulation-and-establishment-community-practice. 

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The  next  section  illustrates  how  the  Commission  intends  to  translate  these  principles  into 
policy. 

5. IMPLEMENTING MAIN PRINCIPLES FOR PLATFORM DEVELOPMENT IN THE EU 

i)  Ensuring a level playing field for comparable digital services 

‘Over-the-top’  (OTT)  messaging  is  forecast  to  reach  a  market  share  of  90%  of  the  total 
messaging market in 2020.21 

In  response  to  the  public  consultation  on  the  evaluation  and  review  of  the  regulatory 
framework  for  electronic  communications,  the  majority  of  respondents  —  including  a 
number of Member States, operator associations, most incumbents and vendors — consider 
traditional 
that  OTT 
telecommunications services.22 

services  provide  consumers  a 

functional 

substitute 

for 

Respondents to the public consultation across different stakeholder groups suggested there 
should  be  a  focus  on  the  specific  activities  that  online  platforms  perform  and  to  ensure  a 
level playing field.23 

Competition from online platform-based business models provides incentives for traditional 
market  players  to  innovate  and  improve  their  performance.  Many  online  platforms  have 
challenged  conventional  business  models  and  offer  services  that  are  increasingly  seen  by 
users  as  substitutes  for  services  offered  in  the  conventional  manner.  The  OTT  online 
communications  service  providers  are  a  case  in  point  as  they  increasingly  compete  with 
traditional telecommunications service providers.24 Yet these new services are not subject to 
the same rules as traditional telecommunications services. 

What is considered to be a comparable service may vary with the public policy context. For 
some purposes (e.g. as security and confidentiality of communications), it may be necessary 
to  address  all  services  facilitating  interactive  communications  between  their  users;  for 
others, end users may associate guarantees such as quality of service assurances, or seamless 
interconnection  between  different  service  providers,  with  the  use  of  public  resources  like 
phone numbers. 

Creating a level playing field in relevant areas should be the general principle in the digital 
single market. To achieve a level playing field, there may be a need to simplify, modernise 
and lighten existing regulation. These modernisation efforts should seek to avoid imposing a 
disproportionate burden on new as well as traditional business models.  

http://www.europarl.europa.eu/RegData/etudes/STUD/2015/569979/IPOL_STU(2015)569979_EN.pdf. 

21  
22   See the synopsis report: http://ec.europa.eu/newsroom/dae/document.cfm?doc_id=15294. 
23   See the synopsis report on the public consultation on online platforms. 
24   Certain  of  these  online  communications  services  (e.g.  those  whose  business  model  is  based  on  revenues  from  advertising  or  data 
collection) show typical features of platforms, i.e. they operate in multisided markets and they benefit from ‘network effects’. 

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As  a  general  principle,  comparable  digital  services  should  be  subject  to  the  same  or 
similar  rules,  duly  considering  opportunities  for  reducing  the  scope  and  extent  of 
existing  regulation.  As part  of its  review  of  EU  telecoms rules to  be completed still in 
2016, the Commission is assessing the possibility of proposing a targeted mix of proposals 
involving a degree of deregulation (taking into account certain rules that are at present only 
applicable  to  traditional  electronic  communications  services  such  as  for  example  some 
universal  service  obligations),  together  with  the  application,  where  necessary,  of  a  more 
limited  set  of  communications-specific  rules  to  all  relevant  and  comparable  services 
including when provided by OTT players. 

As  part  of  the  review  of  the  ePrivacy  Directive  in  2016,  the  Commission  will  consider 
simplification and adjustment of its scope and potential application of some of its rules, for 
example those relating to confidentiality, also to OTT online communications services.  

ii)  Ensuring that online platforms act responsibly 

One in three internet users is a child.25 Compared with 2010, children aged 11-16 are now 
up  to  20%  more  likely  to  be  exposed  to  hate  messages.  Children  are  also  more  easily 
exposed  to  adult  material  online,  often  with  unrestricted  access  (23  of  the  top  25  adult 
websites visited by UK internet users provide instant, free and unrestricted access to hard-
core pornographic videos).26 

In  2015  alone,  the  UK  Internet  Watch  Foundation  identified  68,092  unique  URLs 
containing child sexual abuse content, hosted anywhere in the world.27 

Around three quarters of all respondents to the public consultation, including a majority of 
consumers,  citizens  and  businesses,  called  for  greater  transparency  on  platform  content 
policy. More than two thirds considered that different categories of illegal content require 
different policy approaches in respect of notice-and-action procedures. 

As  of  July  2015,  more  than  400  hours  of  video  content  was  uploaded  to  YouTube  every 
minute.28  In  their  replies  to  the  public  consultation,  rights  holders  across  several  content 
sectors  (music,  images,  press  publishing  and  broadcasting)  claimed  that  their  content  is 
used by some online platforms without authorisation or through licensing agreements that, 
in their view, contain unfair terms. 

In  respect  of  access  to  information  and  content  for  many  parts  of  society,  platforms  are 
increasingly taking centre stage. This role, necessarily, brings with it a wider responsibility. 

The  present  liability  regime  for  intermediary  service  providers,  as  set  out  in  the  e-
Commerce  Directive,  was  designed  at  a  time  when  online  platforms  did  not  have  the 

25   One in Three: Internet Governance and Children’s Rights, Sonia Livingstone, John Carr and Jasmina Byrne, November 2015. 
26   EU  Kids  Online  survey  [www.eukidsonline.net/].  In  the  UK,  the  Authority  for  Television  on  Demand  found  that  at  least  44 000 
primary  school  children  accessed  an  adult  website  in  one  month  alone.  2014  report  ‘For  adults  only?  Underage  access  to  online 
porn’. 
IWF's  2015  Annual  Report  https://www.iwf.org.uk/about-iwf/news/post/444-iwf-announce-record-reports-of-child-sexual-abuse-
online. 69% of victims were assessed as aged 10 or under and 1,788 of victims were assessed as aged 2 or under. 

27  

28   See: http://www.statista.com/statistics/259477/hours-of-video-uploaded-to-youtube-every-minute/. 

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characteristics  and  scale  they  have  today.  However,  it  did  create  a  technology-neutral 
regulatory environment that has considerably facilitated their scaling-up. This is in part due 
to the harmonisation of the exemption of certain types of online platforms from liability for 
illegal content and activities, in respect of which they have neither control nor knowledge.29 
While certain concerns were raised on liability issues the consultation showed broad support 
for the existing principles of the e-Commerce Directive.30  

Given  this  background,  the  Commission  will  maintain  a  balanced  and  predictable liability 
regime  for  online  platforms.  This  is  crucial  for  the  further  development  of  the  digital 
economy  in  the  EU  and  for  unlocking  investments  in  platform  ecosystems.  At  the  same 
time, a number of specific issues relating to illegal and harmful content and activities online 
have been identified that need to be addressed to render this approach sustainable.  

The first issue relates to the proliferation on online video sharing platforms of content that is 
harmful to minors and of hate speech. Children are increasingly exposed to harmful content 
through video sharing platforms,31 while the incitement to violence or hatred through online 
audio-visual  material  is  a  particularly  acute  problem.  The  Commission  is  addressing  this 
through  sector-specific  regulation  as  part  of  the  amendment  of  the  Audio-visual  Media 
Services Directive.  

The  second  issue  concerns  the  allocation  of  revenues  for  the  use  of  copyright-protected 
content. New forms of online content distribution have emerged that may make copyright-
protected  content  uploaded  by  end-users  widely  available.  While  these  services  are 
attracting  a  growing  audience  and  gain  economic  benefits  from  the  content  distribution, 
there is a growing concern as to whether the value generated by some of these new forms of 
online  content  distribution  is  fairly  shared  between  distributors  and  rights  holders.  The 
Commission  intends  to  address  this  through  sector-specific  regulation  in  the  area  of 
copyright.  The  Commission  will  also  aim  to  address  the  issue  of  fair  remuneration  of 
creators in their relations with other parties using their content, including online platforms.32 
In  the  context  of  the  evaluation  and  modernisation  of  the  enforcement  of  intellectual 
property rights the Commission will assess the role intermediaries can play in the protection 
of intellectual property rights, including in relation to counterfeit goods, and will consider 
amending the specific legal framework for enforcement. The Commission will also continue 
to  engage  with  platforms  in  setting  up  and  applying  voluntary  cooperation  mechanisms 
aimed  at  depriving  those  engaging  in  commercial  infringements  of  intellectual  property 
rights of the revenue streams emanating from their illegal activities, in line with a "follow 
the money" approach.  

Third, there are important areas such as incitement to terrorism, child sexual abuse and hate 
speech  on  which  all  types  of  online  platforms  must  be  encouraged  to  take  more  effective 
voluntary action to curtail exposure to illegal or harmful content. Many laudable initiatives 

29   Directive 2000/31/EC. 
30   The  vast  majority  of  individual  users,  content  up-loaders  and  intermediaries  consider  the  liability  regime  fit-for-purpose,  whereas 
respondents who are dissatisfied with the current regime (right holders, their associations and notice providers) find it insufficiently 
clear or not well implemented, see: Synopsis report on the public consultation on online platforms. 

31 EU Kids Online: http://www.lse.ac.uk/media@lse/research/EUKidsOnline/EU%20Kids%20III/Reports/Intheirownwords020213.pdf. 
32   Part  of  the  on-going  assessment  of  the  need  to  increase  legal  certainty,  transparency  and  balance  in  the  system  that  governs  the 

remuneration of authors and performers in the EU – COM(2015) 626 final. 

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by  industry  already  exist  in  this  area.  The  dialogue  with  IT  companies  towards  a  code  of 
conduct on illegal hate speech online, the EU Internet Forum on terrorism content and the 
CEO  Coalition  to  make  the  internet  a  better  place  for  children  are  important  examples  of 
multi-stakeholder engagement processes aimed at finding common solutions to voluntarily 
detect and fight illegal or harmful material online. As online platforms continue to scale-up 
and expand into additional sectors, these efforts have to be sustained and developed across 
the EU to reinforce their positive role in society.  

Fourth, a number of online platforms in the public consultation raised the concern that the 
introduction  of  voluntary  measures  would  mean  they  would  no  longer  benefit  from  the 
exemption  from  intermediary  liability  under  the  e-Commerce  Directive.  Providing  more 
clarity  to  online  platforms  with  regard  to  the  exemption  from  liability  for  intermediaries 
under that Directive in light of any such voluntary measures taken by them would, therefore, 
be important in enabling them to take more effective self-regulatory measures. 

Finally,  there  is  a  need  to  monitor  existing  procedures  for  notice-and-action  to  ensure  the 
coherence and efficiency of the intermediary liability regime. Before considering launching 
an  initiative,  the  Commission  will  first  assess  the  results  of  ongoing  reforms  such  as  the 
review  of  the  Audio-visual  Media  Services  Directive,  the  copyright  review  and  voluntary 
initiatives such as the EU Internet Forum. 

The  Commission  will  maintain  the  existing  intermediary  liability  regime  while 
implementing a sectorial, problem-driven approach to regulation: 

- with its proposal for an updated Audio-visual Media Services Directive to be presented 
alongside  this  Communication,  the  Commission  will  propose  that  video  sharing 
platforms  put  in  place  measures  to  protect  minors  from  harmful  content  and  to  protect 
everyone from incitement to hatred. 

- in the next copyright package, to be adopted in the autumn of 2016, the Commission will 
aim to achieve a fairer allocation of value generated by the online distribution of copyright-
protected content by online platforms providing access to such content. 

Starting still in 2016, the Commission will further encourage coordinated EU-wide self-
regulatory  efforts  by  online  platforms.  It  will  regularly  review  the  effectiveness  and 
comprehensiveness of such voluntary efforts with a view to determining the possible need 
for  additional  measures  and to  ensure that  the  exercise  of  users’  fundamental  rights  is  not 
limited. 

The Commission will, during the second half of 2016, explore the need for guidance on the 
liability  of  online  platforms  when  putting  in  place  voluntary,  good-faith  measures  to 
fight illegal content online. 

The Commission will review the  need for formal notice-and-action procedures, in light 
of the results of, inter alia, the updated audio-visual media and copyright frameworks and 
ongoing self-regulatory and co-regulatory initiatives. 

iii) 

Fostering trust, transparency and ensuring fairness 

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- 

Informing and empowering citizens and consumers 

A  2016  Eurobarometer  survey  on  online  platforms33  showed  that  72%  of  responding 
consumers were concerned about the data collected about them or their activities. 72% also 
considered  that  online  platforms  should  be  regulated  to  limit  the  extent  to  which  they 
display  different  results  to  users  based  on  the  data  collected  about  their  activities.  At  the 
same  time,  56%  of  responding  consumers  indicated  that  they  did  not  read  the  terms  and 
conditions of online platforms. 

Over  75%  of  respondents  among  the  general  public34  consider  that  more  transparency  is 
needed, in particular on how platform remuneration influences the listing of search engine 
results,  on  identification  of  the  actual  supplier  of  services  or  products,  and  on  possible 
misleading practices including fake reviews. 

Access to data spurs marketplace efficiency and innovation, but it can also help save lives, 
improve  education,  as  well  as  improve  government  services  and  policy  development.  The 
future  internet  cannot  succeed  without  the  trust  of  users  in  online  platforms,  and  without 
online  platforms  respecting  all  applicable  legislation  and  the  legitimate  interests  of 
consumers and other users.35 The recently adopted review of the EU rules on the access to 
and processing of personal data already includes important provisions to better inform and 
protect  users  regarding  the  collection  of  personal  data,  in  particular  with  explicit  consent 
requirements  and  the  establishment  of  new  principles  such  as  ‘data  protection  by  default’ 
and ‘data protection by design’.  

However, large parts of the public remain apprehensive about data collection and consider 
that more transparency is needed. Online platforms must respond to these concerns by more 
effectively informing users what personal data is collected and how it is shared and used, in 
line with the EU data protection framework.36 More generally, this issue includes the ways 
in  which  users  identify  themselves  in  order  to  access  online  platforms  and  services.  It  is 
recognised  that  a  multitude  of  username  and  password  combinations  is  both  inconvenient 
and a security risk. However, the frequent practice of using one’s platform profile to access 
a  range  of  websites  and  services  often  involves  non-transparent  exchanges  and  cross-
linkages of personal data between various  online platforms and websites. As a remedy, in 
order  to  keep  identification  simple  and  secure,  consumers  should  be  able  to  choose  the 
credentials by which they want to identify or authenticate themselves. In particular, online 
platforms should accept credentials issued or recognised by national public authorities, such 
as electronic or mobile IDs, national identity cards, or bank cards. 

Greater transparency is also needed for users to understand how the information presented 
to them is filtered, shaped or personalised, especially when this information forms the basis 

33   Eurobarometer Special 447 on online platforms (2016). 
34   See the synopsis report on the public consultation on online platforms. 
35   Only  22%  of  Europeans  have  full  trust  in  companies  like  search  engines  or  social  networks,  see:  Special  Eurobarometer  359, 
'Attitudes on Data Protection and Electronic Identity in the European Union'. A high level of trust is at the same time essential to the 
data-driven economy, see: European Commission Communication ‘Towards a thriving data-driven economy’, COM(2014) 442 final. 
36   Currently  Directives  95/46/EC  and  2002/58/EC  and  once  applicable,  the  General  Data  Protection  Regulation.  The  GDPR  was 
adopted in April 2016 together with the Directive on the Protection of individuals with regard to the processing of personal data by 
competent  authorities  for  the  purposes  of  prevention,  investigation,  detection  or  prosecution  of  criminal  offences  by  Council  and 
Parliament.  

10 

 
                                                 
of  purchasing  decisions  or  influences  their  participation  in  civic  or  democratic  life.  If 
consumers  are  properly  informed  of  the  nature of  the  products that  they  view  or  consume 
online, this assists the efficient functioning of markets and consumer welfare. 

Online ratings and reviews of goods and services are helpful and empowering to consumers, 
but  they  need  to  be  trustworthy  and  free  from  any  bias  or  manipulation.  A  prominent 
example  is  fake  reviews,  where  loss  of  trust  can  undermine  the  business  model  of  the 
platform itself, but also lead to a wider loss of trust, as expressed in many responses to the 
public consultation.37 

Finally,  existing  EU  consumer  and  marketing  law  already  requires  online  platforms  to  be 
transparent and to not mislead consumers, for example as regards sponsored search results 
and  online  rating  and  review  systems.  Improved  enforcement  of,  and  better  compliance 
with, this legislation will foster more trust, transparency and fairness.  

The Commission presents a legislative proposal revising the Regulation on Consumer 
Protection Cooperation together with this Communication, to facilitate more efficient 
enforcement of EU consumer law in cross-border situations.  

The  Commission  has  reviewed  the  guidance  on  the  Unfair  Commercial  Practices 
Directive to be adopted together with this Communication. The Commission will further 
assess  any  additional  need  to  update  existing  consumer  protection  rules  in  relation  to 
platforms  as  part  of  the  regulatory  fitness  check  of  EU  consumer  and  marketing  law  in 
2017.  It  will  also  monitor  the  implementation  of  the  principles  for  comparison  tools  that 
were drawn up by the multi-stakeholder dialogue on comparison tools that the Commission 
instigated.38  

In  order  to  empower  consumers  and  to  safeguard  principles  of  competition,  consumer 
protection  and  data  protection,  the  Commission  will  further  promote  interoperability 
actions,  including  through  issuing  principles  and  guidance  on  eID  interoperability  at 
the  latest  by  2017.  The  aim  will  be  to  encourage  online  platforms  to  recognise  other 
eID  means  —  in  particular  those  notified  under  the  eIDAS  Regulation39  —  that  offer  the 
same reassurance as their own. 

In the context of the continued dialogue with all stakeholders, the Commission encourages 
industry  to  step  up  voluntary  efforts,  which  the  Commission  will  undertake  to  assist  in 
framing, to prevent trust-diminishing practices, in particular — but not limited — to tackle 
fake or misleading online reviews. 

-  Safeguarding a fair and innovation-friendly business environment 

Nine  out  of  ten  respondents  to  the  public  consultation  considered  that  there  is  room  for 
improvement in business-to-business (B2B) relations between platforms and suppliers. They 

37   See the synopsis report on the public consultation on online platforms. 
38   See COM(2011) 942 final. 
39 Regulation (EU) No 910/2014 of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal 
market.  

11 

 
                                                 
highlighted allegedly problematic examples of contractual clauses and practices covering a 
wide number of sectors.40 

Among  those  respondents  expressing  dissatisfaction  with  these  B2B  relations,  more  than 
80% consider that market dynamics will not address the issue and that a mix of regulatory 
and non-regulatory actions are needed. 

Many respondents considered that internal complaint mechanisms set up by platforms are 
not effective and cost efficient to solve the problems that arise between online platforms and 
their suppliers. 

As  online  platforms  play  an  increasing  role in  the  economy,  the terms  of  access to  online 
platforms can be an important factor for online and offline companies. For SMEs and micro-
enterprises, some online platforms constitute important, sometimes the main, entry points to 
certain markets and data. For their part, online platforms have a key interest in a sustainable 
and  positive  relationship  with  their  business  users  on  whom  they  rely  for  the  creation  of 
value. 

The public consultation highlighted a number of concerns from certain stakeholders about 
unfair trading practices from online platforms. The most common alleged problems include 
the following: 

1.  platforms imposing unfair terms and conditions, in particular for access to important 

user bases or databases;  

2.  platforms refusing market access or unilaterally modifying the conditions for market 

access, including access to essential business data;  

3.  the  dual  role  that  platforms  play  when  they  both  facilitate  market  access  and 
compete  at  the  same  time  with  suppliers,  which  can  lead  to  platforms  unfairly 
promoting their own services to the disadvantage of these suppliers;  
4.  unfair ‘parity’ clauses with detrimental effects for the consumer; and 
5.  lack of transparency — notably on platform tariffs, use of data and search results — 

which could result in harming suppliers’ business activities. 

A  significant  number  of  business  respondents  to  the  public  consultation  highlighted  the 
potentially  negative  consequences  of  these  alleged  unfair  trading  practices,  and  suggested 
that  additional  measures  —  a  mix  of  regulatory  and  non-regulatory  measures  —  are 
needed.41 

Finally, the consultation also showed the potential need to explore issues around ownership 
and  use  of,  as  well  as  access  to  data.  This  is  necessary  to  ensure  a  more  suitable  and 
balanced  contractual  relationship  between  service  providers  and  business  users,  which  is 
important in stimulating investment. 

Competition  and  internal  market  policy  should  be  seen  as  complementary  policies  which 
have an important role to play in the effective functioning of the DSM with regard to online 
platforms. 

40   See the synopsis report on the public consultation on online platforms. 
41   See the synopsis report on the public consultation on online platforms. 

12 

 
                                                 
Competition  law  addresses  issues  of  competition  between  market  players,  thus  creating 
wider  choice  for  consumers  at  lower  prices  and  maximising  opportunities  for  innovation. 
EU competition policy is based on constant principles, but its tools are flexible and can be 
effectively applied to the specificities of different markets, including online platforms.  

Beyond  the  application  of  competition  policy,  the  question  arises  as  to  whether  EU-level 
action  is  needed  to  address  fairness  of  B2B  relations.  At  this  stage,  more  information  is 
needed  concerning  relations  between  platforms  and  their  suppliers  or  partners  in  order  to 
assess, and map out, the nature and extent of problems which could result in harm to these 
suppliers'  business  activities,  in  particular  where  this  may  negatively  affect  innovation. 
Where  business  models  of  entire ecosystems  of  SMEs  are dependent  on  access  to  a  small 
number  of  online  platforms,  or  where  platforms  have  access  to  datasets  of  unprecedented 
size, new asymmetries may be created. In such situations, some suppliers to platforms can 
be disproportionately exposed to potentially unfair trading practices, even in the absence of 
established dominance of a platform.  

The Commission will  carry  out  a targeted fact-finding  exercise42 on  B2B practices  in 
the online platforms environment. This will examine more closely the issues raised in the 
public  consultation  as  well  as  the  potential  means  of  redress  beyond  the  application  of 
competition  law,  e.g.  (voluntary)  dispute  resolution  mechanisms,  transparency  and  better 
information measures or guidance. In particular, the Commission will engage closely with 
stakeholders  and  public  authorities.  By  spring  2017,  the  Commission  will  determine 
whether additional EU action is needed. 

iv)  Keeping  markets  open  and  non-discriminatory  to  foster  a  data-driven 

economy 

A majority of all respondents to the public consultation saw the need for strengthening the 
capacity of online platforms to address switching.43 Many businesses and individuals raised 
as  issues  the  design  of  application  programming  interfaces  (APIs)  of  online  platforms,  or 
the changing conditions to access them. 

In a functioning digital single market it is beneficial that users can switch platforms as easily 
as possible. The decision of users to stay with an online platform and share their data should 
be  a  free  choice  linked  to  the  quality  of  the  service  provided,  and  not  due  to  obstacles  to 
switching to another platform, including transferring their data. This point was clearly made 
by  the  European  Council  in  its  October  2013  conclusions,44  and  strongly  supported  in  the 
public  consultation.  Respondents  to  the  public  consultation  proposed,  inter  alia,  the 
development  of  common  standards  for  data  transfers,  and  argued  in  favour  of  general 
portability or transferability of raw personal and non-personal data. For business users, this 
is seen as important since they store and process personal data of clients and employees, but 
they also deal with large volumes of non-personal data that are vital for business continuity. 

Involving stakeholder workshops, expert group meetings, surveys and studies. 

42  
43   See the synopsis report on the public consultation on online platforms. 
44  

‘There is also a need to address the bottlenecks in accessing one’s ‘digital life’ from different platforms which persist due  to a lack 
of interoperability or lack of portability of content and data. This hampers the use of digital services and competition. An open and 
non-discriminatory  framework  must  therefore  be  put  in  place  to  ensure  such  interoperability  and  portability  without  hindering 
development of the fast moving digital sphere and avoiding unnecessary administrative burden, especially for SMEs’. 

13 

 
 
                                                 
From  the  point  of  view  of  public  authorities,  facilitating  and  reducing  switching  costs  is 
important. Data portability, the development of standards and interoperability — including 
via  open  API-based  ecosystems  —  are  key  enablers  for  the  free  movement  of  data  in  a 
digital single market. More generally, APIs can allow smaller firms to use or reuse business 
data. In this context, a well-functioning access to business data via user-friendly and well-
designed  APIs  contributes  to  create  and  expand  ecosystems  with  new  and  innovative 
products using data that has already been gathered, and that is sometimes left unexploited.45 

Major  online  platforms  and  intermediation  services  such  as  app  stores  and  e-commerce 
marketplaces  may  take  the  form  of  closed  ecosystems.  This  is  for  a  variety  of  reasons 
including  quality  control,  issues  of  liability  and  security.  Closed  platform  ecosystems  can 
further  lead  to  efficiencies,  including  greater  competition  between  platforms  but  they  can 
also  have  adverse  effects.46  When  public  money  is  used  to  support  platform  innovation, 
open  platform  models  should  generally  be  favoured.  These  include  the  EU’s  innovation 
investments in emerging areas such as virtual reality, smart cities and the Internet of Things, 
and  more  generally  to  form  the  basis  of  a  sustainable  future  internet.  Open  platform 
ecosystems  can  offer  key  advantages  in  terms  of  savings  on  switching  costs  and  market 
efficiencies.  Support  by  the  Commission  to  ensure  that  future  developments  of  digital 
technologies remain open is therefore particularly relevant. 

As  part  of  the  ‘free  flow  of  data’  initiative  scheduled  for  the  end  of  2016,  the 
Commission  will  consider  options  for  effective  approaches,  including  technical 
standards,  to  facilitate  switching  and  portability  of  data  among  different  online 
platform and cloud computing services, both for business and private users. 

In this context, the Commission will also examine the potential barriers to a single EU 
data  market  that  may  arise  from  legal  uncertainties  regarding  the  ownership  and 
usability of  — or access to —  data, including issues related to application programming 
interfaces. 

45   This  is  in  particular  the  case  for  platforms  in  the  area  of  the  Internet  of  Things,  as  explained  in  the  Staff  Working  Document 

Advancing the Internet of Things in Europe, SWD(2016) 110/2. 

46   As for example also noted by Germany’s Monopolkommission in its report ‘Competition policy: The challenge of digital markets’ of 

2015, para 243. 

14 

 
 
 
 
 
                                                 
6. CONCLUSION 

In  this  Communication,  the  Commission  has  laid  out  its  overall  assessment  of  online 
platforms as part of its strategy for the digital single market. 

Online  platforms  play  a  key  role  in  innovation  and  growth  in  the  Digital  Single  Market. 
They have revolutionised access to information and have made many markets more efficient 
by better connecting buyers and sellers of services and goods. While there are some online 
platforms  that  reach  historic  numbers  of  users  across  the  world,  and  that  expand 
continuously  into  new  areas  of  the  economy,  there  are  also  still  many  opportunities  for 
competitive  European  platforms  to  emerge.  Effectively  stimulating  innovation  in  these 
areas, while adequately protecting the legitimate interests of consumers and other users, is 
perhaps  the  most  important  challenge  the  EU  faces  today  in  terms  of  securing  its  future 
competitiveness in the world. 

The  present  assessment  has  also  identified  a  number  of  areas  where  public  or  private 
interests  need  to  be  carefully  assessed  and  where  better  compliance  with  EU  regulatory 
standards should be ensured.  

In  this  respect,  this  Communication  underlines  the  need  to  adopt  policy  and  regulatory 
approaches that respond directly to the challenges, and which are flexible and future-proof. 

Where appropriate, self-regulation and co-regulation can often achieve better outcomes for 
enabling the development of strong platform ecosystems in Europe and can complement or 
reinforce the existing legislation that already governs certain activities of online platforms. 

The  industry’s  compliance  with  applicable  EU  law  and  the  effectiveness  of  voluntary 
measures  taken  to  maintain  the  trust  of  their  user  base  will  be  key  in  addressing  the 
challenges identified in the assessment. 

Finally,  in  order  to  fulfil  the  promise  of  a  digital  economy  for  all,  the  Commission  calls 
upon all public authorities and interested parties concerned, and in particular Member States 
and  the  European  Parliament  to  support  this  approach  so  that  the  EU  fully  embraces  this 
digital future while preserving its common values. 

15