What the EU Should Put in the Digital Services Act

Eline Chivot Daniel Castro January 13, 2020
January 13, 2020
The eCommerce Directive—a critical building block of the EU’s digital economy—is in need of modernization, but updates should continue to remove obstacles to online commerce and provide legal certainty to businesses and citizens.

The Internet has been a major driver of economic growth. Internet intermediaries—web hosts, search engines, e-commerce sites, social media sites, payment processors, ad networks, and more—have played a key role in facilitating this growth and enabling firms of all sizes to maximize the benefits of the Internet economy. Many Internet intermediaries, such as Amazon, Facebook, and Google, are among the world’s most successful companies—and both their success and the benefits consumers have gained through their services have been aided by legislation that shields Internet companies from excessive liability for third-party content. In the European Union, this legislation is the eCommerce Directive.

The eCommerce Directive, which went into effect in 2000, created a set of standard rules for liability of online intermediaries. These rules protect online services from being unfairly targeted for the content of their users. For example, these rules ensure travel-booking and online shopping sites are not held liable for user reviews, and social networking sites are not held liable for content posted by users.

The robustness of these protections is being challenged in the EU through legislative proposals that could expose Internet companies to significant liability. Growing concerns about issues such as hate speech and disinformation are pressuring policymakers to enact reforms to the policies that set the basic rules for platform liability. But substantially reducing current liability protections could cause serious negative repercussions for the EU economy, as well as for the availability of online services and products consumers currently have access to. Overly prescriptive rules and one-size-fits-all solutions could have unintended consequences, including restricting innovation, hampering growth, and limiting consumer choice.

What the EU Should Put in the Digital Services Act