Digital Services Act: Rightholders lobby Berlin to tighten liability for tech firms

The new EU Commission plans a sweeping new law on digital services, to be proposed later this year. While the Commission has given few details of its intentions, industry groups are already lobbying heavily. Rightholders told the German government that the new law should tighten rules for digital giants such as Google and Facebook, documents reveal.

The Digital Services Act is a key proposal of the new Commission of Ursula von der Leyen. It will „reinforce the single market for digital services“, according to the Commission’s 2020 work programme.

While plans for the new law keep evolving, a document leaked last summer said that the scope of the law could include rules against online hate speech and disinformation. It should also address political advertising online and fairness in e-Commerce.

The new law is set to affect social networks and cloud services, but also online markets such as Airbnb and internet service providers. It is likely to draw lobbying efforts as intense as those on the Copyright Directive finalized last year, which turned into a showdown between digital giants such as Youtube and the music, film and publishing industry.

Liability changes possible

A key question for the new law is liability. The current e-Commerce Directive exempts service providers from liability for illegal content uploaded by users, including copyright infringement, but only if they delete it after being notified.

The leaked paper said that future regulation could oblige certain types of services to use ‚proactive measures‘ such as upload filters to avoid liability. The new rules could include a centralised EU authority to police services.

While the new EU Commissioner for digital issues, Thierry Breton, has insisted he will „not touch“ liability rules, Commission officials told the Financial Times that no such changes could be ruled out.

Possible changes in liability rules face stiff resistance, not just from the affected companies, but also from civil society groups. Advocacy groups such as European Digital Rights fear that liability changes could lead to mandatory filtering, putting a curb on free speech.

Likewise EDiMA, an lobbying group of digital firms including Google, Facebook and Snapchat has warned such changes could „perversely incentivise“ services to interfere with their users’ fundamental rights.

Germany is expected to play an important role in lawmaking. The largest EU member state was a key player in the adoption of the General Data Protection Regulation, while giving voice to the position of rightholders in debates around the Copyright Directive.

A leading Commission official tasked with working out the Digital Services Act, Prabhat Agarwal, is a German national. He recently travelled to Berlin to brief German officials on the Act, according to an e-mail released by the German Ministry of Justice.

Publishers push press exemption

Shortly after the Commission paper on the Digital Services Act leaked, several firms and rightholder groups lobbied in Berlin. A freedom of information request by netzpolitik.org has revealed a trove of lobbying e-mails sent to the Ministry of Economics.

The most detailed set of policy demands was sent by two influential publisher groups, EMMA and ENPA, the pan-European associations of magazine and newspaper publishers. They call for liability changes only to apply to „market-dominant platforms“ with a certain amount of users, while excluding „already heavily regulated“ press publishers.

The publishers want platforms to be held liable for third-party content „in particular if the originator has evaded law enforcement through anonymity“. Such a provision, mooted earlier in a public statement, could amount to a mandatory „real name policy“, requiring users to provide a verifiable ID.

The policy paper includes another issue important to publishers – online advertising. „Any restriction on advertising, whether in the form of bans, restrictions of requirements (e.g. labelling), directly impacts on press revenues across Europe“, the paper notes.

Similar to earlier EU efforts to restrict user tracking for ads in the long-delayed ePrivacy Directive, the publishers call on policy makers to take no further action „hampering advertising in the press sector“.

TV and film industry wants anti-piracy steps

The Association of Commercial Television (ACT) also lobbies on liability. In an e-mail to a group of experts from EU member states, the group recalls the legal distinction between passive services such as cloud hosts, and services which actively curate and spread content, such as Facebook’s Newsfeed.

The European Union must uphold this distinction, the e-mail by ACT notes. Any changes to the liability regime must not „widen safe harbour provisions“ to level down liability for active service providers.

The Motion Picture Association, a lobby group including film industry heavyweights, calls for a „know your customer“ obligation in EU law. It should prevent service providers from doing business with anonymous partners. The e-mail notes „two pirate websites hosted by a French provider“ as an example.

Match Group demands filtering

Rightholder groups are not alone in lobbying on the Digital Services Act. The trove of documents obtained by netzpolitik.org contains e-mails by Tinder’s parent company Match Group, Chinese e-commerce giant Alibaba and Google.

Google launched its lobbying effort on the Digital Services Act with a high-profile meeting between Youtube CEO Susan Wojcicki and Irish leader Leo Varadkar in Dublin last summer. Ireland, which serves as European base for many tech companies, has pushed Big Tech’s talking points in Brussels in the past.

In a two-page paper sent to Berlin, Match Group advocates automated content-filtering measures „as a last-resort measure“ in cases of systemic failure of platforms to deal with illegal content. The use of filtering should be mandated by a newly created EU authority, the paper states.

What Alibaba and Google told Berlin is unclear. An e-mail on Alibaba notes that its representative intended to meet a German official on digital services, but the document gives no indication about the content.

A policy paper by Google was classified as „business secret“, the Germany ministry told netzpolitik.org in an official reply. Europe’s most powerful lobbyist on digital issues, it seems, is able to keep its cards close to its hands.