Large Platforms Ought Not Be Subject to Different Rules Under the EU's Digital Services Act
The European Commission introduced the Digital Services Act (DSA) last December, a landmark initiative aimed at ensuring fair and open digital markets. The DSA, which is being enforced by national coordinators such as the Federal Network Agency (Bundesnetzagentur) in Germany, seeks to protect consumers from harmful behaviors online, regardless of the firm's size.
The presence of harmful content on smaller platforms has become a growing concern. If left unregulated, these platforms could become hotbeds of illegal and harmful activity, undermining trust in the entire digital economy. Consumers may find themselves worse off when browsing online due to the presence of such content.
The DSA's application of asymmetric rules, however, undermines fairness and prevents small and medium-sized enterprises (SMEs) from scaling up. This has led to a decline in the average firm size in the EU over the last two decades. The elimination of the distinction between small and large platforms can ensure fair and trustworthy digital markets for all.
The DSA applies unique rules based on a company's role and size, with special rules for very large online platforms. However, the organization argues that applying different rules according to the company's size is not fair or proportionate. The DSA should apply to all firms irrespective of the company's size to ensure fairness across market participants.
The harm caused by sharing harmful or illegal content online should be prioritized over compliance costs for smaller firms. Consumers expect the same protection level regardless of the firm's size, and the benefits of fair and trustworthy digital markets extend to all consumers and businesses.
Moreover, the DSA's threshold effect damages consumer welfare and trust as harmful behaviors are not confined to big tech companies. Consumers are not protected from harmful behaviors on smaller platforms due to these asymmetric rules. The European Parliament and the Council have the opportunity to eliminate these distinctions and help prevent smaller platforms from becoming potential competitors for large platforms with harmful practices.
In conclusion, the DSA is a crucial step towards creating a fair and trustworthy digital marketplace. By eliminating the distinction between small and large platforms, the European Commission hopes to level the playing field, protect consumers, and promote growth and competition among SMEs in the EU.
