Key Planks of EC Online Platform Regulation Vision Opposed by Broad Range of Interests

The EC defined "online platform" as "an undertaking operating in two (or multi-) sided markets, which uses the internet to enable interactions between two or more distinct but interdependent groups of users so as to generate value for at least one of the groups." Certain platforms also qualify as intermediary service providers, it said. Platform examples include general and specialized Internet search engines; location-based business directories and some maps; news aggregators; online marketplaces; audiovisual and music platforms; and payment systems, it said.

The "definition of online platforms is both over and under inclusive and would be challenging to administer in practice" by the EC itself and those it seeks to regulate, said the U.S.-based Internet Association, whose members are major Internet players. A "leaky" definition could create unintended consequences, it said. It cited economists who define a platform as an economic actor connecting supply with demand, a concept that encompasses a wide range of business models, and urged the EC to "focus on the goods and services offered by the various entities identified in the consultation and develop a 'layered' approach from this starting point." Online markets aren't well suited to pre-emptive regulation, and any competition problems are and should be subject to legal scrutiny at the EU and national level, it said.

The EC shouldn't create a new definition that paves the way for specific platform regulation, said the European Telecommunications Network Operators' Association. ETNO said online platforms "should be understood as digital services that bring together customers and/or suppliers, irrespective of being members of different or the same group." The EC proposal seems to take the traditional economics' concept of two-sided markets or economic platforms and add "which uses the Internet" to make it an "online platform," said the European Consumer Organisation (Bureau Européen des Unions de Consommateurs). BEUC said many laws and policies apply to online service providers. The blanket definition, combined with the examples of different platforms, in practice covers almost any service or application delivered over the Internet, it said. Limiting such economic platforms to those that use the Internet is inadequate, however, because important consumer-facing digital services and apps aren't provided over the Internet but via managed specialized services, said BEUC.

"The definition fails" because it covers "very different types of platforms," said European Digital Rights. EDRi proposed five classifications based on the relationship with consumers or business and on the transactional nature of the relationship, such as rights holders who license content to a platform, content made freely available by a news aggregator, or nontransaction-based activities such as user-generated content.

The possibility of change to intermediary liability for online content also provoked criticism. It would "run counter to the political goals" underpinning the digital single market package to foster digital innovation and growth in Europe, said the Internet Association. The history of intermediary liability in the U.S. and EU shows the need for safe harbors is bigger than in the past because of the explosion in online content, it said. Intermediaries don't operate in a legal vacuum, it said: There are laws, reporting systems, community policing and voluntary efforts to stop the spread of hate speech and other harmful content. The association urged the EC to "exercise regulatory restraint" to avoid stymieing incentives to invest in EU startups.

The concept in the EU e-commerce directive of the "mere technical, automatic and passive nature" of information transmission by information society providers "has proven to be sufficiently clear to be interpreted and applied in an homogenous, and at the same time flexible, manner," said the European Competitive Telecommunications Association. ECTA said video-sharing websites haven't raised any specific issues and shouldn't be treated differently from hosting services. The EC suggestion that content providers should be able to give their views about the illegality of content isn't realistic, it said. For content categories such as terrorism or illegal goods, "it would be even irresponsible to set obligations for hosting providers to consult the content owner before acting," and in cases such as Internet child abuse, ECTA said it "can hardly imagine that paedophiles or criminal hackers would respond to such a notification by the hosting provider."

"Intermediaries should not become the police of the internet," said ETNO. It urged the EC to distinguish between those such as network access service providers and cloud hosting providers that are mere conduits and exempt from liability for copyright infringement and other acts; and those that go beyond technical transmission of content by taking editorial responsibility, prioritizing content or using advertising. Intermediary liability rules must be maintained to avoid a high risk of censorship and limitation of fundamental rights, said BEUC.