New chance for platforms in Europe?!13 July 2021
Position paper on Digital Services Act - EU-wide regulation for digital companies
In September 2019, METRO launched the first online marketplace in Germany specifically geared to the HoReCa industry (hotel, restaurant, catering). The goal: to build the number one platform where restaurateurs can find all the non-food items they need for their business. The regulation now pending with the Digital Services Act (DSA) naturally also affects METRO Marketplace and METRO as platform operator. For Public Policy, Annette Weber, Head of Legal at METRO Markets GmbH, has written a post on the opportunities and need for change presented by the regulation.
The upcoming regulation with the Digital Services Act (DSA) has the chance to shape Europe‘s platform economy while protecting smaller platforms and keeping them competitive. In this respect, we have welcomed many aspects of the Commission’s proposal for a Digital Services Act (DSA); in particular, the retention of the exemption from liability for platforms under the E-Commerce Directive of 2000, along with the clarifying provisions on notice and action mechanisms and the verification of traders. The need for improvement has already been communicated by the associations, in particular the German Retail Association (HDE) and Bitkom, whose opinions we endorse.
We would therefore like to focus on a few core issues that have a strong relevance for our e-commerce platform and that have been tightened in an alarming manner in the draft report of 28 May 2021 by the European Parliament’s Internal Market and Consumer Protection Committee.
There is reason for concern that the regulations of the DSA in the version of Christel Schaldemose MEP’s draft report will significantly restrict the activities of e-commerce platforms based in and focused on Europe. The specified (investigation) requirements can only be fulfilled with considerable additional effort. The additional risks that may arise are difficult or impossible to control; this is especially true when admitting traders from third countries (including traders from the UK, Norway and Switzerland). Accordingly, the range of products available to European consumers may be significantly reduced.
In contrast, the already existing market leaders will be strengthened. They already have the financial means, human resources and internal processes in place to meet the additional requirements and they have sufficient market power to adequately control third country traders. Furthermore, although the threat of liability for product defects is just as painful for the market leaders, it is more tolerable for them than for young companies, given their large financial resources. In summary, from our point of view, the following aspects must be taken into account in terms of the detailed anatomy of the DSA, which we elaborate further in our position paper.