The Digital Services Act: An opportunity for startups and users

March 27, 2020
Digital Services Act

Preventing the dissemination of illegal content online has been high on the agenda of the European Commission and European Member States. The Hate Speech laws in France or the NetzDG in Germany are two examples that show it is time for Europe to implement a harmonised intermediary liability regime. 

The upcoming Digital Services Act will either be a review of the E-Commerce Directive’s liability exemption regime or it will constitute another layer of legislative requirements. In both cases, it could add an extra hurdle for startups which will have to navigate different rules regarding illegal content, regardless of their size and resources. At Allied for Startups, we believe that the Digital Services Act is an opportunity to ensure a free and open platform economy that benefits both entrepreneurs and users. 

The Digital Services Act has the potential to build a solid Single Market by ensuring a broad and robust liability exemption for intermediary platforms. A harmonised regulatory regime across Europe will give startups better opportunities to scale up. The intermediary liability regime should also be updated to encourage entrepreneurs to take more measures to remove illegal content. Entrepreneurs show responsibility to prevent the dissemination of illegal content on their platforms by having community guidelines and sharing best practices. However, in principle they should not be liable for the content their users post online, the same way that companies are not liable for the misuse of their products by the individuals who purchased them. 

The prohibition of general monitoring will be a key principle from which the EU should not deviate. Endangering this principle will leave platforms little choice but to use automatic filtering tools or to hire content moderators, measures that only bigger companies will be able to afford. Consequently, it will reinforce the market power of dominant players and stifle competition and innovation. Filters have proven unreliable or non-existent for innovative technologies such as 3D printing. According to WattPad: image filters achieve 95% accuracy and text filters only achieve 70% of accuracy. This is due to the fact that filters are not able to determine the context in which the content is posted, hence there is a chance that filtering technologies could actually remove legal content.

The Digital Services Act has the potential to be the cornerstone of an open platform economy that protects and promotes innovation and European values. A free internet economy has enabled the creation of many new services and products for the benefit of societies across European. Startups think users first – giving them a straightforward intermediary liability exemption will ultimately enable more choice for consumers. 

Allied for Startups continues underlining the role of the intermediary liability for startups and scaleups and will continue to bring together entrepreneurs and policy makers to debate the Digital Services Act. Good things happen when entrepreneurs speak to policymakers.