ARTICLE 19 believes that the Digital Markets Act (DMA), recently published by the European Commission, has a key role to play in protecting the right to freedom of expression in the region. Despite a number of positive aspects of the draft, ARTICLE 19 calls on the European Parliament and Council to improve the DMA proposal to the benefit of market players and end users alike. In particular, it should take into sufficient account the end users’ perspective and adequately challenge the status quo of gatekeeper platforms.
In December 2020, the European Commission published two important proposals for digital technologies: the Digital Services Act (DSA), a EU regulatory framework for digital services and the Digital Markets Act (DMA), a EU regulatory framework for digital markets. Initially, these were conceived as a single framework supported by a ‘new competition tool’ aimed at addressing structural competition problems in a number of markets. Ultimately, the European Commission put forward two separate proposals, each with its own scope and goals.
Human rights advocates have been so far focusing their attention primarily on the DSA. However, in this brief, ARTICLE 19 offers reasons why the free speech community should also carefully look at the DMA. Further, we outline some initial reactions to the DMA and key concerns about its implications for human rights and freedom of expression.
Closed markets are not good for competitors and freedom of expression
From the outset, ARTICLE 19 welcomes that the European Commission is not looking just at digital services but also at digital markets. We welcome and share the concerns of the European Commission that the behaviour of gatekeeper platforms’, in a variety of markets, undermines competition and market contestability. We agree that this leads to “inefficient market outcomes in terms of higher prices, lower quality, as well as less choice and innovation to the detriment of European consumers.”
Indeed, regulating digital services might not be sufficient to solve a number of key challenges we, individually and collectively, face in the digital environment. For instance, to solve numerous challenges linked to content curation on social media platforms (such as the problems with incitement to violence or disinformation), we certainly need social media platforms to base their community standards on human rights law. However, we also need to diminish the control that a handful of companies are able to exercise on the communication infrastructure. We need to ensure that gatekeepers do not undermine democracy and its institutions. But equally, we also need markets for new and innovative players, fair competition and user choice. This means that there must be a decentralised power and a variety of providers with different business models and systems, which compete fairly. We need viable alternatives and the option for users to switch to different providers. Any other solution is short sighted: a patch that cures the symptoms but leaves the cause unaddressed.
The DMA proposal fails to provide an adequate response to these challenges. Most importantly, it fails to provide sufficient tools to realise the vision of a pluralistic, open and decentralised digital environment that can work for businesses and citizens alike.
Concentration of power is not sufficiently contested
According to the Executive Summary of Impact Assessment Report, the DMA Proposal should “foster the emergence of alternative platforms, which could deliver quality innovative products and services at affordable prices.” We are disappointed that the DMA proposal does not deliver this promise.
On the contrary, it seems to focus on creating the condition for competition at the business users’ level, rather than on creating the conditions for more platforms to enter the market. In other words, the DMA proposal cares about protecting business users from, for example, self-preferencing behaviours of vertically integrated platforms; the imposition of most-favoured-nation clauses; and the mandatory use of certain platforms’ services in their relationships with end-users. But it does little to create the conditions for competition to be restored at the platforms’ level.
An extremely meaningful example is Article 6 (i)(f) of the DMA proposal, which requires gatekeepers to provide access and interoperability only with regards to business users or ancillary services. Rather than fostering the emergence of new platforms, this provision has the potential to increase the systemic dependence of business users and ancillary services’ providers from the core platform, whose position remains uncontested and secured in the upper market.
By narrowing the focus on the contestability of platforms and entry at the business users’ layer, the DMA accepts the status quo of gatekeeping at the core platforms’ layer. We believe that the European Commission should at least explain why it has taken the decision to leave such a strongly centralised environment basically untouched. This concentration, as repeatedly recognised by the same Commission in the past, raises structural competition problems. Moreover, it is surely not the best solution for individuals because it provides a few platforms with too much economic and political power, including power on users’ rights and on the flow of information in society. More ambitious solutions are needed to stimulate the emergence of alternative platforms.
Lack of end-users’ perspective
One of key problems of the current digital ecosystem is that various conducts put in place by gatekeepers have an exploitative effect towards end users. This is problematic from a purely economic perspective, but also has a negative impact on users’ rights too. If one player is able to dictate a quality standard in the market, this also affects the protection of users’ data, their freedom of expression, their right to non-discrimination and other human rights.
However, the European Commission does not seem to look at this perspective. There is almost no mention of the end users’ perspective in the DMA proposal and in the accompanying package. On the contrary, the focus is narrowed only on the core platforms and business users relationships. A prime example is Article 10(2)(a) of the DMA proposal which limits the possibility to consider a gatekeeper’s practice unfair in the case where there is “an imbalance on rights and obligations on business users and the gatekeeper is obtaining an advantage from business users that is disproportionate to the service provided by the gatekeeper to the business users.”. Therefore, when the imbalance on rights and obligations is on end users, they are left alone in tackling the unfairness, because the DMA does not consider this, yet typical, exploitative cases as something deserving of action.
This approach is all the more difficult to justify if one considers that the protection of end-users from exploitative conducts by companies with a position of market power is traditionally one of the main goals of competition and pro-competitive measures. Article 102 of the Treaty on the Functioning of the European Union (TFEU) includes exploitative conducts towards consumers the same way it includes exclusionary conducts towards competitors. No hierarchy is provided, nor any element that could lead to the conclusion that the former is less important than the latter.
Unfortunately, the European Commission has long failed to protect exploitative conducts towards consumers and has concentrated on the economic aspects of the relationships among competitors. A clear example of this narrow approach is the 2009 Commission’s Guidance on the enforcement priorities in the application of Article 102 TFEU (back then, Article 82 EC), which only contemplates behaviours put in place by dominant players with the aim to exclude competitors. This is an important shortcoming in the DMA: it is difficult to understand and justify why EU regulators want to protect business users more than end users in the Digital Single Market.
End users’ voices need to be part of the process
The DMA proposal foresees a market investigation system that should provide the European Commission with a certain degree of flexibility and check and balances in the enforcement with regards to key elements of the framework. These include the designation of a gatekeeper, the systematic non-compliance with the rules in Articles 5 and 6 of the DMA, and the impact of new services and practices.
ARTICLE 19 finds market investigations to be the step in the right direction; but we believe some safeguards are needed to ensure that they work properly and are sufficiently inclusive of all voices and perspectives. Effective market investigations should not be a closed exchange between the regulator and the gatekeeper; rather, the former should look for information from all relevant actors, including end users. It comes as no surprise that this information cannot be provided by gatekeepers only. However, the market investigation system suggested in the DMA does not create adequate mechanisms for end users to be involved in the process. Therefore, the end users’ voice remains largely silent, notwithstanding the fact that the issues at stake have a strong impact on end users rights. There are no doubts that providing ways for the end users’ voice to be listened to, and amplified, would give greater legitimacy to the DMA regime. It would enrich the regulator’s evidence base and improve the quality of its analysis.
Internal audit should not stop at profiling
Article 13 of the DMA proposal imposes on gatekeepers to “submit to the Commission an independently audited description of any techniques for profiling of consumers that the gatekeeper applies to or across its core platform services.” Requiring internal audits about how automated systems (especially automated decision making systems), are used by companies, including about how they work and which criteria are used to set them, is a basic and necessary step towards greater accountability. Transparency can help rebalance the asymmetry of information among gatekeepers, other players and end users.
However, we find the scope of the audit mandated in Article 13 of the DMA too narrow. The majority of automated decision-making systems used by gatekeepers include at least three sets of activities: the massive collection of end users’ data; the profiling of the latter; the personalisation of the service based on such profiling. Each of these sets raises challenges for end users: massive data collection is, more often than not, in conflict with various GDPR rules, such as data minimisation and purpose limitation. The profiling too needs to comply with the GDPR and could additionally raise problems with non-discrimination rules. But it is within the personalisation part that the major challenges seem to lay. Social media platforms or video sharing platforms are good examples here. On one hand, personalisation can improve a user’s experience by navigating them towards a variety of available content that is relevant for them. On the other hand, there are legitimate concerns that, in the absence of transparency about recommender systems or algorithmic systems, personalisation could be used to influence, or even manipulate, a user’s choices and behaviours.
Even if the DMA adopts a narrower economic perspective, the need for a wider scope of Article 13 remains. In fact, gatekeepers use algorithms to distribute the value created in the markets according to rent maximisation criteria that are non-transparent. These algorithmic rents cement their position of power, and their extractive business model limits the redistribution of value among those that create it. A comprehensive auditing of those algorithms is thus a first necessary step if regulators want to remedy this situation.
With this premise in mind, it is difficult to understand why the European Commission has chosen such a narrow approach for Article 13, leaving out of the audit obligation the activities that appear to have the more critical impact in economic terms, but also on end users’ rights and on societal dynamics. Unless this major gap is fixed, the provision runs the risk of being a blunt tool, or even of legitimising lack of transparency on what is left out. Additionally, we recommend clarifying the main parameters of the mandatory audit such as, inter alia, the independence of who is called to perform it, the scope, and the criteria to be used in the assessment.
The discussions on the DSA and DMA cannot be kept separate
As noted earlier, the DSA and DMA proposals are two complementary pieces that are needed to tackle complex challenges in the EU digital single market. Those challenges are of economic, social, and political nature and an adequate solution of these problems is key to guarantee the future of EU democracies and the respect of EU values. None of the main challenges we face today can be solved by separately looking at the services or at the markets where they are provided. The goal of a fair, open and free digital environment can only be achieved if the services provided respect certain standards, and if markets are no longer controlled by a handful of gatekeepers. What is needed is a holistic approach, strong coordination and complementarity between the rules for the services and those for the markets.
Therefore, the discussion of the DSA and DMA proposals should take place holistically with a view to enhance synergies, avoid conflicts and fill gaps. Additionally, it is important for all relevant stakeholders to engage and be listened to by EU decision makers.
Conclusions and recommendations
ARTICLE 19 calls on the European Parliament and the Council to ensure that:
- The DMA includes more ambitious measures to realise the vision of a pluralistic, open and decentralised digital environment that can work for businesses and citizens alike;
- The scope of Article 6(1)(f); is expanded in order to include interoperability with other platforms and with regards to the provision of non-ancillary and innovative services;
- The DMA protects end users as much as business users and that exploitative practices towards end users are a focus area of the proposal. Among others, Article 10(2)(a) should also include cases of imbalance of rights and obligations on end users and the gatekeeper obtaining an advantage from end users that is disproportionate to the services provided by the gatekeeper to the end users;
- The DMA guarantees that end users’ voices are part of the process, and should establish mechanisms for end users to have access and contribute to market investigations;
- Internal audits are broader in scope and cover the entire range of activities performed by gatekeepers’ automated decision-making systems;
- The discussions surrounding the DMA and DSA proposals are not kept separate. They should take place holistically with a view to enhance synergies, avoid conflicts and fill gaps. All relevant stakeholders should be listened to by EU decision makers.