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Ladies and gentlemen,
I am very pleased to be here with you today, even if only virtually. I really appreciate that you managed to assemble such a diverse set of participants for this event. Members of the European Parliament, regulators, businesses from a wide range of economic sectors, well-known academics, and representatives of consumers and civil society.
And this is exactly what we need when discussing the Digital Services Act: a wide, open and inclusive debate, involving all parts of our economy and society. Because what we are discussing today affects each and every one of us. It is about which internet we want.
Why do we need to modernise the E-Commerce Directive?
When the E-Commerce Directive was adopted 20 years ago, things were very different. Back then, the average internet user did not spend two hours a day on social media platforms. We did not collectively download 390,000 apps every single minute. And we certainly did not enter 3.8 million search queries per minute, on google alone.
These statistics are from before the corona virus hit. We have just been witnessing a surge in all types of online activities. We have been shopping online more than ever before. Kept ourselves informed, and communicated online. We have teleworked, educated our children from the distance, and even followed our gym classes online.
20 years ago, most of those digital services simply did not exist. So, the E-Commerce Directive does not provide answers to today’s questions, and it needs to be revised as a matter of urgency.
Our digital strategy – before and after Covid
In February this year, we had set out our strategic objective to “shape” Europe’s digital future. To shape technologies in a way that improves and enriches our lives. That brings the many benefits of digitisation to all of us, and not just to some.
I am often asked if all the benefits that digital solutions have brought us during the Corona crisis have changed the Commission’s digital policy. Have we been too critical of tech companies, too risk averse when it comes to digital technologies?
My answer to this is no. Our objectives are more relevant than ever. The more we use and depend on digital technologies, the more important it is that these technologies are in tune with our values, beliefs and rules.
Risks relating to e-commerce
E-commerce has allowed us to sell and buy products when most physical shops around us were closed. But we also saw a surge in manipulative and illegal activities to exploit consumers.
Only two weeks ago, a UK study had analysed 200 toys bought from the largest online marketplaces. 58% of those toys were illegal to sell in the EU as they failed to comply with safety requirements.
This is unacceptable. Consumers shopping on high street stores would not think twice whether the toys they see on the shelves are dangerous, or whether that expensive leather bag might be fake. We need to have the same trust when shopping online.
Risks relating to disinformation
We also witnessed an avalanche of disinformation. Disinformation that led people to ignore official health advice and engage in risky behaviour. And targeted disinformation campaigns seeking to undermine our democracies.
Erosion of trust in digital technologies
All of this erodes the trust in digital technologies. Trust that we need if we want to maximise their potential.
Policy makers are not alone in thinking that the way in which a few digital companies dominate the internet requires a rebooting of our digital policy. Many internet users are getting more and more concerned that they have been transformed into permanent data donors.
True, we are getting some useful services in return. But we have no visibility of what is happening with our data once we have clicked away the terms and conditions that separate us from the content we wish to see.
How can we restore trust in digital?
So, what does it take to restore trust in our digital world? At a high level, I would argue that we have to oblige digital companies to act more responsibly, and in greater transparency. And we need more fairness on our markets.
To get there, it is not enough to devise new rules. We also need to be able to enforce them. The algorithms used by online marketplaces are the matchmakers in today’s world. They connect sellers and buyers and cut out many of the traditional distribution chains. At the same time, this has reduced the possibility to enforce our laws.
Customs authorities can only inspect a fraction of the 2 million parcels that Chinese traders ship to European consumers every month. Market surveillance authorities are struggling to cope with such volumes too.
Digital companies need to act more responsibly
Digital platforms need to assume greater responsibility for their activities. They benefit from commissions paid by their users, and from advertising income generated. It is only fair that they also mitigate the risks arising to society.
This also matters from a level-playing field perspective. European traders that have to meet our product standards, and pay taxes, are in direct competition with imports from rogue traders that don’t do any of this. Abiding by the law must not lead to a competitive disadvantage.
So, what can we do about this? For a start, platforms need to better identify those who are selling on their market places. It is ridiculous that a trader that has been caught selling illegal products can disappear in thin air, and sign in under a different name five minutes later.
Platforms also need to act much more rigorously against illegal products and services offered on their platforms. And they have to cooperate more closely with law enforcement authorities, so that the authors behind such criminal activity can be caught.
Safeguards to protect fundamental rights
When we are saying that we need more effective action against illegal content, we are equally determined that perfectly legal content is not removed accidentally.
This is very important when it comes to decisions that may affect our fundamental rights, our freedom of expression. At the moment, only the platforms themselves know what type of content is removed, and on what grounds.
We need transparency and accountability for these decisions. Users need to be informed when their content is removed, and to be able to challenge this. Public authorities need to be able to supervise the activities of platforms when democratic values are at stake, such as the integrity of our election processes.
The business case: legal certainty; the single market
A modernised set of rules will also bring much needed legal certainty for our businesses. This is particularly important for small companies and start-ups, because the very large platforms can always resort to an army of lawyers to address legal uncertainty and fragmentation.
And they need a fully functioning single market. Our strategic objective of a twin transition to a digital and green economy requires a single market that allows innovative companies to scale up. However, we have seen national laws trying to close the apparent gaps left by the outdated E-Commerce Directive. These laws usually serve a legitimate purpose, but they also fragment our markets.
To restore the single market, we need common rules. We need better cooperation between national authorities enforcing these rules. And we need greater clarity about the sharing of responsibilities between the country where a service provider is established, and the country where its activities take place.
We also need fair competition
We also need fair competition in the market. If any company come up with a better, more innovative product, it should be able to compete with the incumbents on equal terms. Based on the merits of their offer.
This is no longer the case in our digital economy, where a small number of gatekeeper platforms act as private rule-makers for the markets they have created. They decide on who can enter their markets, who has to leave them, and on the conditions to be respected while selling on them.
The Platform-to-Business Regulation, which will become fully applicable next Sunday, will partially address this. However, it will not solve the problem that some large platforms offer their own services on the markets they have created – in direct competition with the third party sellers that depend on it.
The ex-ante Regulation under the DSA
A number of past and current competition cases have shown to what extent dominant gatekeeper platforms can use this dual role in giving unfair preference to their own services. This is why the Digital Services Act will also set limits as to what such platforms can – or cannot – do.
Limiting the ways in which dominant companies may engage in anti-competitive behaviour will be an important step forward. But it may not be sufficient either.
The need for a new competition tool
Due to network effects and the ability to draw on an ever-increasing pool of data, large platforms can easily transfer their competitive advantage into any neighbouring market. Like a spider in the World Wide Web they see everything that’s going on, and collect vital data that others can’t get. And this can lead to the tipping of markets that are currently still contestable.
So we are also consulting on a new competition tool. In a digital age, where the very structure of a market can create problems for competition, we need the power to do more than investigate individual cases. The new tool would let us investigate markets instead, to prevent them from tipping.
It is in our hands to shape our digital future. The Digital Services Act and the new Competition tool are two important initiatives to define Europe’s vision of a digital transformation that works for all.
The public consultations are still running until the beginning of September, and I hope you will all make your voice heard.
And I wish you a fruitful and inspiring debate for the rest of this conference.