Ukrainian Law Blog: DIGITAL LAW OF THE EUROPEAN UNION: DIGITAL SERVICES AND ONLINE PLATFORMS

Volodymyr Machuskyy

The active formation of the sixth technological system leads to the accelerated digital transformation of social relations. The digital society and digital technologies open new opportunities for the realization of the rights of individuals and legal entities, by going beyond physical communication, geographical location and social status.

The Digital Decade announced in the EU [1] envisages the development of a human-centered digital society to empower citizens and businesses, bridge the digital divide and establish effective rules to protect citizens from new digital delinquencies.

The European Commission has proposed two legislative initiatives to update the rules governing digital services in the EU: the Digital Services Act [2] and the Digital Markets Act [3]. These regulations form a single set of new rules applied throughout the EU to create a safer and more open digital space.

The Digital Services Act and the Digital Markets Act have two main objectives: 1) to create a safer digital space in which the fundamental rights of all users of digital services will be protected; 2) establish a level playing field to promote innovation, growth and competitiveness both in the European Single Market and globally.

The EU’s Digital Services Act sets out relevant new rules to foster innovation, growth and competitiveness, as well as foster the expansion of small digital platforms, small and medium-sized enterprises and start-ups. In addition, the responsibilities of users, platforms and government bodies are established, balanced in accordance with European values, in the focus of which are citizens.

The Digital Markets Act sets out a set of well-defined objective criteria for qualifying a large online platform (“gatekeeper”). This allows this regulation to remain well focused on the problem that it intends to solve with relatively large, systemic online platforms.

A company will meet the established criteria if: 1) it has a strong economic position, has a significant impact on the domestic market and operates in several EU countries; 2) has a strong intermediary position, i.e. connects a large user base with a large number of enterprises; 3) has (or is going to have) a strong position in the market, which means the stability of such a company over time.

These EU Laws aim to provide a comprehensive basis for the current and future legal regulation of all digital services and will extend to all digital services, including social media, online markets and other online platforms operating in the European Union.

The new regulations will create a safer and more open digital space for all users, where their fundamental rights will be effectively protected.

The acts will also create fairer and more open digital markets for all, fostering innovation, growth and competitiveness. The development of small platforms, small and medium enterprises and startups will be supported through proper access to customers throughout the single market.

In addition, the new acts will prohibit unfair terms set out on some online platforms. This applies to unfair conditions that have already been introduced and are in force, as well as conditions that may be introduced in the future.

Online platforms operate in a very dynamic environment. For this reason, the Commission established the EU Observatory to Monitor the Economics of Online Platforms to track the evolution of online platforms and identify problems arising from their activities.