The New Platform Liability: from the e-Commerce Directive to the Digital Services Act Regulation (“ DSA ”)

Introduction

As of February 17, 2024, the entire digital services regulation will start to apply within the internal market of the EU. Several obligations under this Digital Services Act will start to apply gradually in the course of 2023 to some of the largest providers of online intermediary services, mostly the large tech companies.

The new European regulation covers many new and old topics in IT law, but leaves existing directives and regulations largely unchanged. The e-commerce directive from 2000 also remains in place. An exception is the regime of liability exemptions from the e-commerce directive. The DSA deletes these provisions from the e-commerce directive and will regulate this subject from now on.

“ Article 89 DSA - Amendments to Directive 2000/31/EC (“e-commerce Directive”)
1. Articles 12 to 15 of Directive 2000/31/EC are deleted.
2. References to Articles 12 to 15 of Directive 2000/31/EC shall be construed as references to Articles 4, 5, 6 and 8 of this Regulation respectively.'

Previously, these statutory safeguards from the Electronic Commerce Directive (2000/31/EC) were implemented in national law in the Netherlands in Articles 6:196a to 6:196c of the Dutch Civil Code “BW”.

Compared to the old version of these liability exemptions in the e-commerce directive and the new chapter, a number of changes have been made, and new articles have been added. The article table below provides an overview of the changes and explains the most important differences.

Consequences of the applicability of the digital services act (“DSA”) from February 17, 2024

From now on, the conditional legal liability exemptions regarding providers of intermediary services, also known as “platform liability” or “ notice and takedown " in the European context will be laid down in the Digital Services Regulation/Digital Services Act ("DSA")(EU) 2022/2065).

Why have these important statutory articles been moved to the new regulation?

Anyone who looks at the new articles will quickly come to the conclusion that the textual differences compared to the old legal regime are quite minimal. Apparently, these liability exemptions, which have long been implemented in the national legislation of EU member states, worked as intended.

Why did these important articles of law have to be moved to the new regulation? The European legislator pays attention to platform liability in considerations 16 to 38 of the DSA. Here we also find the answer in the following consideration:

“16) The legal certainty provided by the horizontal framework of conditional liability exemptions for providers of brokering services , as established in Directive 2000/31/EC, has enabled the emergence and scale-up of many new services in the internal market. That framework must therefore be retained. However, given the differences in the transposition and application of the relevant rules at national level and for reasons of clarity and coherence, that framework should be included in this Regulation. Certain elements of that framework should also be clarified, taking into account the case law of the Court of Justice of the European Union. ”

In short, according to the European legislator, providers of online intermediary services benefit from more legal certainty, partly because more and more forms of online services are being added within the internal market. The existing framework should also be included in a regulation from now on, partly for reasons of clarity and coherence, and this opportunity can be used to codify case law of the Court of Justice of the European Union based on these liability exemptions.

Change table overview comparison of statutory safeguards for online intermediary services ("platforms") between e-commerce directive and DSA

Section 4: Liability of service providers acting as intermediaries (EU Electronic Commerce Directive)	CHAPTER II LIABILITY OF PROVIDERS OF INTERMEDIARY SERVICES (EU Digital Services Act Regulation)
Article 12 "Mere conduit" 1. Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, or the provision of access to a communication network, Member States shall ensure that the service provider is not liable for the information transmitted, on condition that the provider: (a) does not initiate the transmission; (b) does not select the receiver of the transmission; and (c) does not select or modify the information contained in the transmission. 2. The acts of transmission and of provision of access referred to in paragraph 1 include the automatic, intermediate and transient storage of the information transmitted in so far as this takes place for the sole purpose of carrying out the transmission in the communication network, and provided that the information is not stored for any period longer than is reasonably necessary for the transmission. 3. This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States' legal systems, of requiring the service provider to terminate or prevent an infringement.	Article 4 ‘Mere conduit’ 1.   Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, or the provision of access to a communication network, the service provider shall not be liable for the information transmitted or accessed, on condition that the provider: (a) does not initiate the transmission; (b) does not select the receiver of the transmission; and (c) does not select or modify the information contained in the transmission. 2.   The acts of transmission and of provision of access referred to in paragraph 1 shall include the automatic, intermediate and transient storage of the information transmitted in so far as this takes place for the sole purpose of carrying out the transmission in the communication network, and provided that the information is not stored for any period longer than is reasonably necessary for the transmission. 3.   This Article shall not affect the possibility for a judicial or administrative authority, in accordance with a Member State’s legal system, to require the service provider to terminate or prevent an infringement.
Article 13 "Caching" 1. Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the automatic, intermediate and temporary storage of that information, performed for the sole purpose of making more efficient the information's onward transmission to other recipients of the service upon their request, on condition that: (a) the provider does not modify the information; (b) the provider complies with conditions on access to the information; (c) the provider complies with rules regarding the updating of the information, specified in a manner widely recognised and used by industry; (d) the provider does not interfere with the lawful use of technology, widely recognised and used by industry, to obtain data on the use of the information; and (e) the provider acts expeditiously to remove or to disable access to the information it has stored upon obtaining actual knowledge of the fact that the information at the initial source of the transmission has been removed from the network, or access to it has been disabled, or that a court or an administrative authority has ordered such removal or disablement. 2. This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States' legal systems, of requiring the service provider to terminate or prevent an infringement.	Article 5 ‘Caching’ 1.   Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, the service provider shall not be liable for the automatic, intermediate and temporary storage of that information, performed for the sole purpose of making more efficient or more secure the information's onward transmission to other recipients of the service upon their request, on condition that the provider: (a) does not modify the information; (b) complies with conditions on access to the information; (c) complies with rules regarding the updating of the information, specified in a manner widely recognised and used by industry; (d) does not interfere with the lawful use of technology, widely recognised and used by industry, to obtain data on the use of the information; and (e) acts expeditiously to remove or to disable access to the information it has stored upon obtaining actual knowledge of the fact that the information at the initial source of the transmission has been removed from the network, or access to it has been disabled, or that a judicial or an administrative authority has ordered such removal or disablement. 2.   This Article shall not affect the possibility for a judicial or administrative authority, in accordance with a Member State’s legal system, to require the service provider to terminate or prevent an infringement.
Article 14 Hosting 1. Where an information society service is provided that consists of the storage of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that: (a) the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or (b) the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information. 2. Paragraph 1 shall not apply when the recipient of the service is acting under the authority or the control of the provider. 3. This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States' legal systems, of requiring the service provider to terminate or prevent an infringement, nor does it affect the possibility for Member States of establishing procedures governing the removal or disabling of access to information.	Article 6 Hosting 1.   Where an information society service is provided that consists of the storage of information provided by a recipient of the service, the service provider shall not be liable for the information stored at the request of a recipient of the service, on condition that the provider: (a) does not have actual knowledge of illegal activity or illegal content and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or illegal content is apparent; or (b)     upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the illegal content. 2.   Paragraph 1 shall not apply where the recipient of the service is acting under the authority or the control of the provider. 3.   Paragraph 1 shall not apply with respect to the liability under consumer protection law of online platforms that allow consumers to conclude distance contracts with traders, where such an online platform presents the specific item of information or otherwise enables the specific transaction at issue in a way that would lead an average consumer to believe that the information, or the product or service that is the object of the transaction, is provided either by the online platform itself or by a recipient of the service who is acting under its authority or control. 4.   This Article shall not affect the possibility for a judicial or administrative authority, in accordance with a Member State's legal system, to require the service provider to terminate or prevent an infringement.
	Article 7 Voluntary own-initiative investigations and legal compliance Providers of intermediary services shall not be deemed ineligible for the exemptions from liability referred to in Articles 4, 5 and 6 solely because they, in good faith and in a diligent manner, carry out voluntary own-initiative investigations into, or take other measures aimed at detecting, identifying and removing, or disabling access to, illegal content, or take the necessary measures to comply with the requirements of Union law and national law in compliance with Union law, including the requirements set out in this Regulation.
Article 15 No general obligation to monitor 1. Member States shall not impose a general obligation on providers, when providing the services covered by Articles 12, 13 and 14, to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity. 2. Member States may establish obligations for information society service providers promptly to inform the competent public authorities of alleged illegal activities undertaken or information provided by recipients of their service or obligations to communicate to the competent authorities, at their request, information enabling the identification of recipients of their service with whom they have storage agreements.	Article 8 No general monitoring or active fact-finding obligations No general obligation to monitor the information which providers of intermediary services transmit or store, nor actively to seek facts or circumstances indicating illegal activity shall be imposed on those providers.
	Article 9 Orders to act against illegal content 1.   Upon the receipt of an order to act against one or more specific items of illegal content, issued by the relevant national judicial or administrative authorities, on the basis of the applicable Union law or national law in compliance with Union law, providers of intermediary services shall inform the authority issuing the order, or any other authority specified in the order, of any effect given to the order without undue delay, specifying if and when effect was given to the order. 2.   Member States shall ensure that when an order referred to in paragraph 1 is transmitted to the provider, it meets at least the following conditions: (a)      that order contains the following elements: (i)     a reference to the legal basis under Union or national law for the order; (ii)      a statement of reasons explaining why the information is illegal content, by reference to one or more specific provisions of Union law or national law in compliance with Union law; (iii)     information identifying the issuing authority; (iv)     clear information enabling the provider of intermediary services to identify and locate the illegal content concerned, such as one or more exact URL and, where necessary, additional information; (v)      information about redress mechanisms available to the provider of intermediary services and to the recipient of the service who provided the content; (vi)      where applicable, information about which authority is to receive the information about the effect given to the orders; (b)      the territorial scope of that order, on the basis of the applicable rules of Union and national law, including the Charter, and, where relevant, general principles of international law, is limited to what is strictly necessary to achieve its objective; (c)      that order is transmitted in one of the languages declared by the provider of intermediary services pursuant to Article 11(3) or in another official language of the Member States, agreed between the authority issuing the order and that provider, and is sent to the electronic point of contact designated by that provider, in accordance with Article 11; where the order is not drafted in the language declared by the provider of intermediary services or in another bilaterally agreed language, the order may be transmitted in the language of the authority issuing the order, provided that it is accompanied by a translation into such declared or bilaterally agreed language of at least the elements set out in points (a) and (b) of this paragraph. 3.   The authority issuing the order or, where applicable, the authority specified therein, shall transmit it, along with any information received from the provider of intermediary services concerning the effect given to that order to the Digital Services Coordinator from the Member State of the issuing authority. 4.   After receiving the order from the judicial or administrative authority, the Digital Services Coordinator of the Member State concerned shall, without undue delay, transmit a copy of the order referred to in paragraph 1 of this Article to all other Digital Services Coordinators through the system established in accordance with Article 85. 5.   At the latest when effect is given to the order or, where applicable, at the time provided by the issuing authority in its order, providers of intermediary services shall inform the recipient of the service concerned of the order received and to the effect given to it. Such information provided to the recipient of the service shall include a statement of reasons, the possibilities for redress that exist, and a description of the territorial scope of the order, in accordance with paragraph 2. 6.   The conditions and requirements laid down in this Article shall be without prejudice to national civil and criminal procedural law.
	Article 10 Orders to provide information 1.   Upon receipt of an order to provide specific information about one or more specific individual recipients of the service, issued by the relevant national judicial or administrative authorities on the basis of the applicable Union law or national law in compliance with Union law, providers of intermediary services shall, without undue delay inform the authority issuing the order, or any other authority specified in the order, of its receipt and of the effect given to the order, specifying if and when effect was given to the order. 2.   Member States shall ensure that when an order referred to in paragraph 1 is transmitted to the provider, it meets at least the following conditions: (a)     that order contains the following elements: (i) a reference to the legal basis under Union or national law for the order; (ii) information identifying the issuing authority; (iii) clear information enabling the provider of intermediary services to identify the specific recipient or recipients on whom information is sought, such as one or more account names or unique identifiers; (iv)     a statement of reasons explaining the objective for which the information is required and why the requirement to provide the information is necessary and proportionate to determine compliance by the recipients of the intermediary services with applicable Union law or national law in compliance with Union law, unless such a statement cannot be provided for reasons related to the prevention, investigation, detection and prosecution of criminal offences; (v)     information about redress mechanisms available to the provider and to the recipients of the service concerned; (vi) where applicable, information about which authority is to receive the information about the effect given to the orders; (b) that order only requires the provider to provide information already collected for the purposes of providing the service and which lies within its control; (c) that order is transmitted in one of the languages declared by the provider of intermediary services pursuant to Article 11(3) or in another official language of the Member States, agreed between the authority issuing the order and the provider, and is sent to the electronic point of contact designated by that provider, in accordance with Article 11; where the order is not drafted in the language declared by the provider of intermediary services or in another bilaterally agreed language, the order may be transmitted in the language of the authority issuing the order, provided that it is accompanied by a translation into such declared or bilaterally agreed language of at least the elements set out in points (a) and (b) of this paragraph. 3.   The authority issuing the order or, where applicable, the authority specified therein, shall transmit it, along with any information received from the provider of intermediary services concerning the effect given to that order to the Digital Services Coordinator from the Member State of the issuing authority. 4.   After receiving the order from the judicial or administrative authority, the Digital Services Coordinator of the Member State concerned shall, without undue delay, transmit a copy of the order referred to in paragraph 1 of this Article to all Digital Services Coordinators through the system established in accordance with Article 85. 5.   At the latest when effect is given to the order, or, where applicable, at the time provided by the issuing authority in its order, providers of intermediary services shall inform the recipient of the service concerned of the order received and the effect given to it. Such information provided to the recipient of the service shall include a statement of reasons and the possibilities for redress that exist, in accordance with paragraph 2. 6.   The conditions and requirements laid down in this Article shall be without prejudice to national civil and criminal procedural law.

The most notable differences

"Mere conduit" (doorgeefluik)

The least changed exception is the so-called 'mere conduit'. The changes are linguistic and grammatical in nature as a result of the change from a directive to a regulation.

An EU directive must first be implemented in a national law, but an EU Regulation has immediate and direct effect at national level within the law of the member states without being converted into a national law. Due to their direct impact on the national legal order, European Regulations are increasingly referred to colloquially as “Acts”, even though, according to legal terminology, they are not strictly speaking “statutes in a formal sense” according to the standards of Dutch law.

“caching”

A small addition to the caching exception is the addition of 'security' in addition to the functional-technical 'effective' retrieval of information. The importance of cybersecurity is also increasingly recognized in legislation and regulations, not only has a veritable train of guidelines and regulations in the field of network security and cybersecurity been implemented, more proposals are in the making.

Existing laws, directives and regulations, for example the Radio Equipment Directive (RED) 2014/53/EU, now also contain explicit legal obligations regarding security. It is therefore not surprising that the European legislator wanted to explicitly mention this interest when copying this exemption.

 “Hosting”

By far the biggest changes occur with “hosting”, where it is good to keep in mind that this does not only mean literal hosting in a technical sense, but also other forms of acting as “host” by a service provider in the information society. For example, by operating an online platform on which third parties can publish information.

A specific example of codification of case law of the EU Court of Justice clarifies the link with consumer protection law: " Article 6 paragraph 3 DSA: Paragraph 1 does not apply to the consumer protection liability of online platforms that offer consumers the opportunity to conclude distance contracts with traders, when such online platform displays the specific information or otherwise facilitates the specific transaction concerned in a manner that would lead an average consumer to believe that the information or product or service at issue in the transaction is provided by the online platform itself or by a recipient of the service who acts under the authority or supervision of the service provider. ”

 

The old paragraph 2 will also be deleted, with a more extensive elaboration of that authority in its place in separate articles. From now on, the DSA regulation itself specifies how “authorized orders” are given to the providers of a 'hosting' service, including an online platform. This means that from now on this will not only be up to the Member States at national level, a pan-European standard may be introduced. The often globally operating online service providers may also gain more clarity from this.

No general monitoring obligation for illegal activity, but voluntary monitoring is of course allowed and you must cooperate with authorized orders from public authorities

Both the old regime in the e-commerce directive and the new regime in the digital services regulation explicitly state that providers of online intermediation services have no legal obligation to actively monitor for illegal activities. Providers therefore do not have to take the place of police or investigation services.

While one of the main concerns at the turn of the millennium was to facilitate the development of a market for digital services and to prevent companies from being deterred to innovate by too onerous obligations, the wind has apparently changed.

The digital services regulation now contains the explicit comment that one may of course voluntarily monitor illegal activity and the regulation details the cooperation between these online service providers and public authorities in combating illegal content in greater detail.

Advice

Starting February 17, 2024, everyone will have to comply with the digital services regulation. So don't wait too long to make your activities “DSA proof ”.

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