|DSM – What is it about?
In 2018, we will see new EU legislation being widely implemented as part of the EU Commission’s Digital Single Market (DSM) Strategy. The amendments to the current legal framework are far reaching and will potentially be game changing. Some of the key areas to be affected will be:
Value Gap – Amortization of digital copyright
The draft Copyright Directive is one of the centrepieces of the DSM. Its progress has been slow and looks set to remain that way. Almost a year since its first draft of a Report on the Commission’s proposal, the lead committee for this draft legislation (Legal Affairs/JURI) has yet to finalize its position and the amendments it will put forward to a plenary session of the European Parliament (EP). Until that session has been held it’s unlikely we will see any real progress towards resolution of a number of controversial measures within it, despite the feverish activity in late 2017 of the Estonian presidency of the Council (made up of Member State government representatives) to move things forward through a series of proposed compromise drafts. As things stand, it looks likely that no final vote in the EP will take place much before the summer of 2018.
One of the most controversial measures being considered is Article 13, which seeks to define a more proactive role for content hosting providers to deal with misuse of copyright material. Some have labeled this the “value gap” provision, others more tendentiously, call it the “censorship machine” proposal.
Platforms – Regulation on the horizon
Another aspect of the DSM package that will affect almost all digital players in 2018 relates to potential platform regulation. Platform operators, B2B customers and consumers should closely follow the debate on whether specific platform regulation is required in addition to competition law. This is not only relevant for the well-known global online giants.
Since a clear definition of platforms is still missing, in principle all multi-sided companies who are intermediaries between different groups of the market could face regulation. Following a consultation at the end of last year on “Fairness in platform-to-business (P2B) relations“, we expect a decision by the Commission on whether we will see a proposal for specific EU platform regulation in the first half of 2018.
The current papers indicate a specialized T&C control regime for online players. In addition, a regulation might introduce rules for the delisting of products from e-commerce website and for search and ranking and advertising placements. At the intersection with competition law, a regulation may also deal with the notion of “fairness“, and in particular to which extent platforms favor their own services over third-party offers.
Finally, with its Communication of 28 September 2017 titled “Tackling Illegal Content Online – Towards an enhanced responsibility of online platforms“, the Commission has defined guidelines and principles platform operators ought to live up to. Compelling solutions are to be developed in this respect. For example, in case of non-compliance, the Commission may follow up on its implicit threat to propose legislation aimed at increasing the proactive prevention, detection and removal of illegal content inciting hatred, violence and terrorism online.
Audio-visual media services – An increase in regulation
The debates surrounding the proposed audio-visual media services (AVMS) directive will impact VOD services, which may be subject to new taxes and production support obligations, and video sharing platforms, which may have to do more to ensure certain kinds of harmful videos do not stay on the platform.
ePrivacy – Yet another regulation
Current debates focus on how data from connected devices can be used. This is of huge importance to Internet of Things! As well as whether advertising-based services should be permitted to use “cookie walls”, i.e. require the acceptance of advertising cookies as a condition to using the service.
The Hogan Lovells DSM Task Force
We have a dedicated team following the complete DSM initiative, consisting of 25 dedicated lawyers across our European offices. We have also developed an interactive tool (www.dsmwatch.com) displaying the core initiatives and their current status. If you would like to discuss any of the areas with any of the DSM team you can find their contact details on this microsite.
Please see also our webinar recording on the Outlook for DSM in 2018, which you find here.