Out-Law News 3 min. read
06 Feb 2023, 10:21 am
New guidance issued by the European Commission does little to clarify online platform providers’ reporting obligations under the Digital Services Act (DSA), an expert has said.
Wouter Seinenof Pinsent Masons, a technology law specialist based in Amsterdam, was commenting ahead of an imminent compliance deadline online platforms face under the DSA for publishing information on the number of ‘active recipients’ of their services.
Under Article 24(2) of the DSA, online platform providers have until 16 February to “publish for each online platform or online search engine, in a publicly available section of their online interface, information on the average monthly active recipients of the service in the [EU], calculated as an average over the period of the past six months”.
That proactive reporting duty is a recurring one that must be complied with on at a least a six-monthly basis following the initial disclosure. Further, reactive, reporting obligations can arise under the DSA from 16 February, when the majority of the regulation’s provisions take effect.
The DSA imposes new obligations on online intermediaries, strengthening, among other things, existing laws that govern how those businesses must manage illegal and harmful content published, and goods and services sold, via their services. A tiered system of regulation is provided for under the regulation, with the most stringent duties falling on the largest businesses within scope of the regime – ‘very large online platforms’ (VLOPs) or ‘very large online search engines’.
Pinsent Masons has published a guide to help online intermediaries understand whether their services will be subject to the DSA and, if so, under which category.
For intermediaries classed as online platforms, whether they will be subject to the rules applicable to VLOPs will depend on how many ‘active recipients’ there are of their service. The DSA’s reporting obligations around active recipient numbers are designed to assist the European Commission in determining which online platforms are VLOPs.
Under the DSA, the concept of an ‘active recipient’ of an online platform is defined as “a recipient of the service that has engaged with an online platform by either requesting the online platform to host information or being exposed to information hosted by the online platform and disseminated through its online interface”. However, there is little guidance elsewhere in the regulation to expand on that definition.
Seinen said: “As we have previously highlighted, recital 77 of the DSA provides some guidance on the concept of ‘active recipient’ which can help online platforms meet their reporting obligations. The European Commission’s new guidance does little to build on the recital’s wording to further clarify the concept, though it confirms that consumers, business users and traders can all constitute active recipients of a multi-sided online platform and that the concept also applies to users that only view and do not make a purchase, among other things.”
“However, notably, the guidance does appear to suggest that online platforms can comply with their reporting obligations under Article 24(2) without having to disclose the actual number of active recipients there are of their services,” he said.
In its question-and-answer style guidance, the Commission invited intermediaries to consider what was meant by the wording of Article 24(2) and whether the provisions require online platforms to “publish the actual number of active recipients of their service on their online interface”.
In response to its own question, it said that online platforms “have to publish information on the average monthly active recipients using their services, as calculated in accordance with the relevant provisions of the DSA and in light of guidance provided in recital 77”. It added that those businesses “must make that information publicly available, by publishing it on their online interfaces”.
Seinen said: “eBay is one online platform that appears to have interpreted its obligations under Article 24(2) of the DSA as not extending to a requirement to publish the ‘actual number’ of active recipients of its service. eBay published its Article 24(2) statement on its website late last year, declaring that it does not consider itself to qualify as a VLOP under the DSA.”
“Regardless of the information they disclose when publishing their Article 24(2) statements, online platforms should be prepared to justify their position to the European Commission,” he said.
Under Article 24(3) of the DSA, both the European Commission and national authorities – ‘digital services coordinators’ – have powers to require online platform providers to share “additional information as regards the calculation [regarding active recipient numbers] …, including explanations and substantiation in respect of the data used”.
In its new guidance, the Commission confirmed that online platforms do not need to notify the information on the average monthly active recipients to it unless asked to do so under Article 24(3). However, it has encouraged them to do so proactively.
The Commission said: “In the interest of transparency and in order to facilitate the monitoring of compliance with the DSA during the initial period of its application, all such providers are encouraged to communicate that information to the Commission by using the dedicated functional mailbox: [email protected] [and to the competent Digital Services Coordinator of the Member State of their establishment once designated by the Member State concerned] spontaneously, as well as the methodology that they used for the purposes of determining the average monthly active recipients of their online platform(s) or their online search engine(s) in the Union, at the same time that they publish that information on their online interfaces.”
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