Online Platforms Face Sweeping New Rules in Europe

May 25, 2016, 10:30 AM UTC
Belgium, Brussels, European Commission, European flags at Berlaymont building
Photograph by Getty Images

The EU’s executive body has set out a raft of new measures for protecting minors online, combating online hate speech, forcing search engines to properly label sponsored results, and obliging on-demand video services such as Netflix to include at least 20% European content in their catalogs.

The European Commission’s new proposals, unveiled Wednesday, would also lead to a significant change in telecoms regulation, in order to create a “level playing field” between traditional operators and online communications services such as Skype (MSFT) and Facebook (FB). This could mean new confidentiality obligations for the online players.

If the European Parliament and the bloc’s member states agree to the proposals—the negotiation process typically takes years—then on-demand video services will need to make sure minors don’t watch inappropriate material. Video-sharing services such as YouTube (GOOG) will also be encouraged to formulate and stick to an industry code of conduct for protecting children.

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Gratuitous violence and pornography would be “subject to the strictest measures providing a high degree of control (such as age verification or PIN codes).” Countries such as the U.K. are already pushing for such controls.

As for the new rules on EU-derived content, the online on-demand platforms would be getting off lightly—TV broadcasters would need to devote at least half their programming to material coming from the region. According to the Commission, Netflix (NFLX) and iTunes (AAPL) already exceed the 20% quota.

The Commission said it was approaching the regulation of online platforms—which covers everything from Google and Amazon to Facebook, Apple’s App Store and Uber—with caution.

“I want online platforms and the audiovisual and creative sectors to be powerhouses in the digital economy, not weigh them down with unnecessary rules,” said Andrus Ansip, the commissioner in charge of coordinating EU digital policy. “They need the certainty of a modern and fair legal environment: that is what we are providing today. This means not changing existing rules that work, such as those related to the liability of online service providers.”

Creating the “level playing field” between traditional and online communications providers will be a tricky business. The Commission said it is looking at partially deregulating the old-school telecoms firms, but also adding new regulations to online services.

For example, at the moment traditional operators have to stick to strict rules about keeping customer data secure and private, which means they’re limited in how they can use information about customers’ calls, texts and so on. The Commission is now considering extending these confidentiality obligations to platforms.

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As Ansip said, online platforms would not lose their protection against liability for the bad things people do on them—they will not be obliged to generally monitor content, for example. However, the Commission is talking about voluntary measured to combat illegal content, perhaps involving a “clarification” of notice-and-takedown procedures.

The Commission will also run a consultation on platforms’ business-to-business contracts, to see whether they treat their suppliers fairly.

Consumer protection is also a big factor here, with measures to combat unmarket sponsored search results and fake or misleading online reviews. National regulators will gain new powers to take down sites hosting scams, and will be able to force domain registrars to tell them who is behind a site. Platforms will also be encouraged to accept a wider range of electronic ID systems.

Meanwhile, in its much-heralded drive against “geo-blocking,” the Commission will also move to stop e-commerce operations within the EU from unnecessarily discriminating against potential customers from other EU countries, for example by charging them more. Sites also won’t be able to block customers from other EU countries, or redirect them to their local website without their consent.

However, e-commerce suppliers won’t be obliged to deliver across the EU if they don’t want to.

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