Nº42
DECEMBER 19
2020
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SPECIAL ISSUE
THE DIGITAL SERVICES ACT AND THE DIGITAL MARKETS ACT: A CONSTITUTIONAL AND FUNDAMENTAL RIGHTS ASSESSMENT EDITED BY ANA RAMALHO
ANA RAMALHO
INTRODUCTION: 'TIS THE SEASON TO BE... BENCHMARKING: THE DSA, THE DMA, AND THE BROADER PRIMARY LAW FRAMEWORK FERNANDO DIEZ
CHRISTINA ANGELOPOULOS
DIGITAL PLATFORMS AND COMPETITION LAW: THE NEW DMA
INTERMEDIARY LIABILITY, FUNDAMENTAL RIGHTS AND THE DIGITAL SERVICES ACT
www.eulawlive.com 1 EU LAW LIVE 2020 © ALL RIGHTS RESERVED · ISSN: 2695-9585
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Introduction: 'Tis the season to be... benchmarking: the DSA, the DMA, and the broader primary law framework 1
Dr. Ana Ramalho
management regulatory framework for online intermediaries’ content moderation efforts, with a special focus on ‘very large online platforms’. This will be complemented by a new governance system for enforcement by Member States and the European Commission.
On 29 January 2020, the European Commission’s Work Programme 2020 stated the Commission’s intention to propose a Digital Services Act (DSA) which would, inter alia, further consolidate the single market for digital services. The proposal was set to take place in the last quarter of 2020, and to be based on Article 114 TFEU.
A Digital Markets Act (DMA) aimed at imposing ex-ante obligations on core platform service providers acting as gatekeepers.
Since then, and presumably in order to inform its proposal, the Commission has run two public consultations: one on clarifying responsibilities for digital services, and another one on an ex-ante regulatory instrument aimed at very large online platforms acting as ‘gatekeepers’. In its Inception Impact Assessment, the Commission announced its objective of ‘increasing and harmonising the responsibilities and obligations of digital services and, in particular, online platforms and reinforce the oversight and supervision of digital services in the EU’.
The goal of this special issue is not to provide a detailed commentary on the newly proposed DSA and DMA. Rather, the issue takes a step back and aims to analyse the adequacy of the proposed legislation against the benchmark of EU primary law, as - according to the principle of constitutional legality - lawmaking has to be based on higher sources of law. Specically, each of the authors of this issue will analyse constitutional and/or fundamental rights constraints to the DSA and the DMA.
Eventually, instead of a DSA encompassing both themes, the European Commission has decided to put forward two separate legislative proposals:
A few constitutional-like norms in the Treaties, such as proportionality (Article 5(4) of the Treaty on European Union (TEU)) and subsidiarity (Article 5(3) TEU) must underpin secondary legislation. Proportionality in
A DSA that will revise intermediary liability rules and introduce a supervised risk-
1. Copyright Counsel at Google, invited Assistant Professor at Leiden University, and Member of EU Law Live's Editorial Board. The views expressed here are those of the author and should in no way be attributed to Google.
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the lowest number of obligations to the highest, the proposal covers intermediaries in general, hosting services, online platforms and very large platforms.
particular requires the evaluation of three factors: the suitability of the measure for the attainment of its objectives; the necessity of the measure; and the proportionality of it vis-à-vis the restrictions that it might involve (see for example the Court of Justice of the EU’s (CJEU) cases Fedesa and Käserei Champignon).
The DMA proposal, on the other hand, states that its main objective is allowing ‘platforms to unlock their full potential by addressing at EU level the most salient incidences of unfair practices and weak contestability so as to allow end users and business users alike to reap the full benets of the platform economy and the digital economy at large, in a contestable and fair environment’. (p.2-3). The Commission defends the proportionality of the measure, inter alia, by pointing out the narrow scope of the proposal (which focuses on gatekeepers) - p. 5 and 6.
According to the DSA proposal, its primary objective is to ensure the proper functioning of the internal market, in particular in relation to the provision of cross-border intermediary services (p. 5). The proposal also seeks to ensure the best conditions for the provision of innovative digital services in the internal market, to contribute to online safety and the protection of fundamental rights, and to set a robust and durable governance structure for the effective supervision of providers of intermediary services (p. 2). One of the Commission’s key arguments to defend the proportionality of its proposal is the asymmetric nature of the obligations it establishes for platforms depending on their services and size (p. 6). The proposed Regulation establishes a layered net of responsibilities depending on the intermediary: from
The compliance of the draft legislative measures with the principle of proportionality implies scrutinizing the adequacy of the substantive norms proposed with the stated objectives of said legislative measures, by following the three factors of proportionality mentioned above. But compliance with proportionality also involves critically analysing the proportionality justications advan-
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ced by the Commission. Future research on this topic could thus focus on whether the asymmetric nature of obligations in the DSA and the focus on gatekeepers in the DMA indeed bring the proposals in line with the principle of proportionality, making them constitutionally-compliant.
example the cases Netlog, paragraph 51, and Scarlet Extended, paragraph 53). The approach of the CJEU and of the E-Commerce Directive set an example as to how the new proposals should be aligned with a constitutional approach where the balance of relevant fundamental rights is key.
Moreover, the respect for fundamental rights, which are part of EU primary law via Article 6(1) TEU, must also be ensured in both legal instruments. The respect for fundamental rights entails abiding by the principle of indivisibility of those rights, according to which all fundamental rights are of equal ranking. Secondary legislation should thus adequately reect a balance between the different provisions of the Charter of Fundamental Rights of the EU (‘the Charter’), namely Article 8 (protection of personal data), Article 11 (freedom of expression and information), Article 16 (freedom to conduct a business) and Article 17(2) (protection of intellectual property).
The need to take into account fundamental rights is also supported by the recent Communication by the Commission, from 2 December 2020, that sets out the strategy to strengthen the application of the Charter in the EU. There, the Commission expressly states that ‘[t]he Charter applies to EU institutions in all their actions’. In particular, the Commission gives the example of the DSA proposal as an initiative that must ensure the protection of lawful content ‘by safeguarding fundamental rights’. The compliance of secondary legislation with the Charter is key to a sound legislative framework not least because, as pointed out by the Commission itself, ‘EU legislation that does not comply with the Charter can be legally challenged’.
Freedom of expression has gured prominently in early discussions around intermediary liability. The predecessor of the DSA, the E-Commerce Directive, states in its Recital 46 that ‘the removal or disabling of access [to illegal content] has to be undertaken in the observance of the principle of freedom of expression’. However, the other fundamental rights mentioned above have also been considered by the CJEU over cases concerning ltering systems, where it had to carry out a balance between the protection of intellectual property, on the one hand, and the freedom to conduct business, the right to protection of personal data and the freedom to receive or impart information, on the other (see for
The Commission’s stance follows an earlier European Parliament Resolution, where the Parliament cautioned that fundamental rights ‘need to be ingrained at the core of a successful and durable EU policy on digital services’: they need to appear both in the letter and spirit of the law and its implementation. The DSA proposal holds that its rules introduce important safeguards to fundamental rights and freedoms like freedom of expression, non-discrimination, and the protection of personal data (p. 11-12). Specically, the proposal states that the Regulation will ‘mitigate risks of erroneous or unjustied bloc-
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different fundamental rights at stake (and compliance with constitutional principles such as the principle of proportionality). New tools and norms introduced in the DSA will need to undergo an analysis of their compatibility with fundamental rights in similar terms as those mentioned above in relation to the principle of proportionality: that is, not only should the new norms be assessed in terms of their compatibility with fundamental rights, but the justications given by the Commission as to said compatibility should be critically analysed.
king speech, address the chilling effects on speech, stimulate the freedom to receive information and hold opinions, as well as reinforce users’ redress possibilities’. (p.12). As for freedom to conduct a business, the Commission takes the view that the costs incurred by businesses, namely intermediaries, are offset by the advantages of having a harmonised regulatory framework and by certain safeguards such as measures against repeated unjustied notices and prior vetting of trusted aggers (whose status however is granted by public authorities upon application by the entity wishing to be a public agger, not by the intermediary - see p. 13 of the Explanatory Memorandum and Article 19 of the proposed Regulation). The proposal also highlights that ‘certain obligations are targeted to very large online platforms, where the most serious risks often occur and which have the capacity to absorb the additional burden’. The proposal does not include empirical evidence of the prevalence of these risks on very large online platforms (nor a proven lack of capacity to deal with those). Rather, the impact assessment bases the targeting of very large platforms on their ‘broadest reach’ (which is not necessarily equivalent to it being the place where ‘serious risks’ occur) and ‘important turnover’ (p. 11).
By contrast with the DSA proposal, the DMA does not go into much detail with regard to fundamental rights considerations (p. 11). The proposal does state that ‘the fair and trusted legal environment that this proposal aims to create shall contribute to safeguarding an appropriate balance between the respective freedoms to conduct a business of providers of core platform services and their business users’, but it fails to elaborate further on this point. Again, the substantive norms of the DMA and the fundamental rights justications advanced by the Commission should be looked into in-depth, so as to ensure a robust and constitutionallycompliant framework. This special Weekend Edition’s structure mirrors the strategy adopted by the EU legislator. Accordingly, the issue divides the DSA and the DMA into two separate contributions. The rst one, by Professor Fernando Diez, covers the DMA; the second one, by Dr. Christina Angelopoulos, focuses on the DSA.
Previous safe harbours limited to a set of services - mere conduit, caching and hosting (Articles 3 to 5 of the proposal, respectively) - are carried over to the DSA with minimal changes. The same happens with the ban on the general obligation to monitor (Article 7 of the proposal). These are tested tools in the EU acquis that ensure a balance between the
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Digital platforms and Competition Law: the new DMA Fernando Diez
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conduct of those ‘large online platforms’” that - in the EC’s view - act as private regulators of the digital markets. This new instrument is supposed to strengthen the application of competition rules, allowing structural competition problems to be addressed.
1. Introduction Last June 2020 the European Commission (EC) launched a proposal for both a New Competition Tool (NCT) and an instrument that provides for ex-ante regulation of digital platforms - the EC talks about online platforms - that are supposed to act as ‘gatekeepers’ of the digital markets. These proposals were part of the package known as ‘Shaping Europe's digital future’, published in February 2020, which included the EC's strategies in relation to other no less relevant issues, such as the processing of personal data and articial intelligence. The regulation of these platforms and the digital services they provide was introduced in the EU through two recently approved set of rules: Directive 2019/2161 and Regulation 2019/1150.
Two important questions underlying this whole debate are, rst, whether the EC’s proposal may clash with fundamental rights and constitutional principles such as the freedom to conduct a business, (for example the freedom to choose with whom to close deals, or to design the business model one deems more appropriate). Secondly, it is necessary to know whether the economic instruments and the existing legal and jurisprudential acquis are sufcient to address the competition problems posed by digital platforms, or whether they are such a unique phenomenon that a totally new and different approach is required.
The roadmap for this ambitious project, following an initial impact assessment and the publication of ‘terms of reference’, went through a public consultation period, and culminated on 15 December 2020 in the Proposal for a Regulation of the European Parliament and of the Council on contestable and fair markets in the digital sector (Digital Markets Act (DMA). Broadly speaking, this proposal is aimed, inter alia, at addressing alleged ‘enforcement gaps’ and governing the
As such, platforms are not a new phenomenon (think of a souk, a medieval market or a modern shopping centre), in that they facilitate the interaction between supply and demand or, in general, between users. For its part, a digital platform is - in general terms a website, app, or any other type of digital support in which one or more groups of
1. Professor of Competition Law, Universidad Villanueva (fdiez@villanueva.edu).
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from the point of view of legislative policy are not evident; that the application of antitrust regulations is a better alternative than regulatory intervention; and, nally, that these new markets do not have such different characteristics that they require a special and unique treatment.
One of the great differences with respect to traditional platforms is that digital ones can grow lmost indefinitely users interact, either by concluding commercial transactions (Amazon, eBay, Uber, AmEx, etc) or simply by connecting with each other by sharing information or offering searches (Facebook, Instagram, Google Search, Match.com, and so on) which do not involve direct commercial transactions between users. Both business models are ‘twosided markets’ in which the digital platform is the meeting point between the different groups. One of the great differences with respect to traditional platforms is that digital ones can grow almost indenitely, generating economies of scale, and are always accessible - virtual space is ubiquitous - to their users.
There are therefore many doubts about the EC's proposal, which we will try to reect in this Long Read; evidence of this is the intense doctrinal debate leading up to the proposal, and the hundred or so comments received as feedback on the Digital Services Act package. After this brief introduction, we address the main topic discussed in this Long Read: the collision of the EC’s proposal with relevant fundamental rights and constitutional principles as enshrined in EU law and jurisprudence. Section 3 will then question the starting point of the DMA: that digital platforms are necessarily natural monopolies. Afterwards, we will discuss which theory of damage is most appropriate to prosecute abuses of dominant position in these new digital markets. In this context, we will refer to the approach that is currently being used to assess the commercial practice of ‘self-favouring’, which is prevalent in this new digital ecosystem. In particular, the treatment of Google's conduct in the well-known Google Shopping and Google Android cases will be discussed. Finally, the last section will present some conclusions.
What we are going to debate here is how constitutional principles (such as proportionality and non-discrimination) and fundamental rights (such as the freedom to conduct a business) should inform the DMA. Moreover, we will analyse whether the EC’s proposals may contribute to improving market conditions and foster innovation and competition, or whether they might achieve just the opposite. To such aim, and in line with the most recent doctrinal contributions to this debate (Professor Hovenkamp’s ‘Antitrust and Platform monopoly’ (2020)), we will argue here that digital platforms are not necessarily natural monopolies; that even if we consider that they form ‘winnertake-all’ type of markets, the consequences
Digital platforms are not necessarily natural monopolies
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tics’, leaves the door open to arbitrariness and legal uncertainty. Given that, under this new regime, the EC would be empowered to impose remedies in markets characterised by ‘structural competition problems’ without the need to identify and ascertain a specic competition law infringement, serious doubts arise concerning its compatibility with the constitutional principles and fundamental rights of non-discrimination, presumption of innocence and freedom to conduct a business. Also, the proposal raises important concerns in terms of legal certainty for the undertakings, and it blurs the traditional - and so far, well-functioning - distinction between ex-ante regulation and ex-post competition enforcement.
2. Preliminary assessment of the DMA in light of constitutional principles and fundamental rights The EC’s proposal for regulating digital markets should be limited to the areas where the alleged ‘enforcement gaps’ really exist, and, more importantly, to those companies that meet the criteria of ‘gatekeeper status’. In that sense, it does not help that Article 3 of the proposal (‘Designation of gatekeepers’) characterises that status with such broad and ambiguous terms as ‘signicant’, ‘important”, “durable’ or ‘foreseeable’. This can lead to a hurdle in the form of legal and economic problems. Of course, not only should these criteria be dened under strict objective conditions, but they should also be interpreted and applied in full compliance with the well-established principles of proportionality (including adequacy to the aims pursued) and legality. This does not seem to be the case in the DMA proposal as it denes excessively broad legal categories by combining quantitative and qualitative criteria (see Articles 3.2 and 3.6). In particular, Article 3.6(f), which adds as a criterion ‘other structural market characteris-
As we shall see, the EC is prohibiting certain practices based on cases that are still pending: either under investigation (such as Amazon, Apple Store), or subject to judicial review (Google Search, Google Android, the German Facebook case). In the name of legal certainty, those allegedly anticompetitive practices should need to be conrmed rst. But more importantly, not conrming them is at odds with the right to a fair trial and basic defence principles.
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If there is no structural malfunctioning of markets, there is no reason to regulate them
This paper will not focus on the ‘procedural’ issues and the institutional redesign that the implementation of the DMA is going to require. They are of utmost importance, but word limits do not allow for an in-depth analysis. We will instead examine the substantive aspects, and, as some commentators of past proposals have already pointed out, we are going to question what competition law can achieve in digital markets, and to what extent the DMA proposal fully complies with fundamental rights and constitutional principles.
Following some evaluations of past proposals, we will simply point out what innovations included in the DMA may represent a deviation from well-established case law and may imply breach of some EU fundamental rights and constitutional principles. For example, according to Recital 56 of the DMA proposal, it seems that having a successful product (an online search engine) is bad for competition, that the expertise acquired by the rm (the learning effects) constitute entry barriers, and that therefore the gatekeeper should be obliged to provide access to their most valuable assets. There is nothing in EU case law that suggests this line of reasoning, and even less that regulatory outcome.
According to the Special Advisers’ Report, in certain circumstances (related to the specic features of digital markets) the EC should be able to declare some practices prima facie unlawful. This idea implies that the companies implementing them bear the burden of proof and are the ones that must demonstrate its positive impact on competition.
Absent factual conguration of a natural monopoly (this issue is further developed in Section 3), ex-ante regulation is unjustied. If there is no structural malfunctioning of markets, there is no reason to regulate them. And, absent an actual and ascertained anticompetitive effect sustained in a consistent theory of harm (this issue is further developed in Section 4), antitrust intervention is misguided and ill-founded, since it is at odds with the principle of proportionality.
This, of course, implies in turn the assumption of an evil intention in the conduct of such companies once they have gained the ‘gatekeeper’ status. However, competition law is ill-suited to second-guess rms’ decisions regarding the business model they are
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If the proposal as contained in the DMA wegoing to follow, or even less the specic dere to succeed, it would, in our opinion, represign of their products and services. Therefosent an unjustied breach of the fundamenre, the alleged necessity for such an ex-ante tal freedom to conduct a business, and it intervention is unfounded and ill-guided, would go against the most elementary prinand the implementation of the remedies enviciples of a free market economy. Moreover, saged in the EC’s proposal simply goes it follows from the above mentioned case against what competition law is designed to law that ‘duty-to-deal’ is an exception to the achieve. Recent and empirically based regeneral rule of contractual freedom, and can search on the goals of EU competition law only be imposed in excepconclude that it prioritises tional circumstances that the process of competition are interpreted restrictirather than directly an outcome (for example, ef- If the proposal as contained vely. However, the proposed Regulation allows the ciency, welfare, and so on). in the DMA were to succeed, EC to intervene even ‘if theTrying to achieve indusre is no demonstrable eftrial or political goals by it would, in our opinion, fect on competition’ (page means of antitrust interrepresent an unjustified 8) - again causing serious vention is simply misusing breach of the fundamental doubts as to the compatibicompetition law. lity of the proposal with freedom to conduct the principle of proportioAt least two possible cona business nality. icts between the EC’s proposal and competition law Secondly, and as already might arise. First, and in rementioned,, the reversal of lation to the already estathe burden of proof, and the fact that, in cerblished doctrine of essential facilities and tain circumstances, a commercial practice is the abuse of dominance in related markets, considered to be prima facie illegal (it therethere is no basis in EU legislation or case law fore being up to the company concerned to to justify a duty to provide interoperability prove its pro-competitive effects), is a imposed on dominant companies, or an oblibreach of the fundamental right of presumpgation for them to establish market condition of innocence. tions allowing their competitors to be on the same level playing eld as them. This has alThis is particularly serious in the specic caready been decided by the Court of Justice in se of digital markets, where there is not yet its well-known Magill and Bronner judgsufcient experience to categorise conduct ments, with the test of ‘exceptional circumsas anti-competitive, and therefore to estatances’. There isn’t a trace of empirical work blish a kind of prohibition ‘by object’ under in the DMA that can explain why the pecuArticle 102 TFEU. According to the Budaliarities of digital markets or the specicities pest Bank case law, this type of prohibition is of online platforms justify an alteration of not appropriate when the nature and potenthis rule.
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tial effects of a conduct or business model are not well understood. Since the well-known Cartes Bancaires judgment, EU case law has been very cautious in establishing this type of prohibition ‘by object’, and in any case this category must always be interpreted and applied in a restrictive manner. To conclude this section, we must insist on the idea that has already been mentioned above: that competition law does not favour one business model over another and respects the legitimate choices of companies about how they operate in the market, as long as they do so within the limits of the law. But it is out of place - and this is what the EC's DMA proposal aims to achieve, in part- to impose ‘open’ (based on free access to third parties) or ‘closed’ systems (where the company, even the dominant one, freely decides to control its business model and to not allow third party access), or to require interoperability. The DMA is allegedly complementary to competition law (Recital 5: ‘Article 101 and 102 TFEU remain applicable to the conduct of gatekeepers’), yet, when giving examples of the ‘blacklisted’ practices, the proposal simply repeats - literally - the Statement of Objections recently sent to Amazon. See, for example, Recital 43: ‘To prevent gatekeepers from unfairly benetting from their dual role, it should be ensured that they refrain from using any aggregated or non-aggregated data, which may include anonymised and personal data that is not publicly available to offer similar services to those of their business users’. And, again, this is simply forfeiting a certain business model, as well as curbing entrepreneurship and free market development. Even though the proposed Regulation declares itself ‘business model agnostic’ (page 8), the truth is that Article 5 (Obligations for gatekeepers) and Article 6 (Obligations for gatekeepers susceptible of being further specied) are undoubtedly forcing companies to adopt a certain way of conducting businesses.
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What should prevail is market reality, not ideological assumptions. That is why it is necessary to rethink not only the EC's proposal but also its premises, the intellectual foundations on which it is based, and to examine The EC's proposal to create a new regulatory them from a perspective that combines protool that contemplates ex-ante obligations per assessment of the facts (whether or not a for digital platforms, insofar as they act as market is a natural monopoly, or with which guardians of the markets in which they operm another rm is competing, is a matter of rate, starts from the premise that - in our opifact, not of law), legal reasoning and econonion - is more than questionable: that these mic analysis. This is the only way to ensure platforms are natural monofull compliance with funpolies, known in economic damental rights and constiliterature as ‘winner-takestutional principles, as estaall’ markets. blished and interpreted by What should prevail consolidated case law. Far from being merely an is market reality, not academic debate, dening It is clear that adequate redigital platforms as natural ideological gulation benets compamonopolies is of enornies, suppliers and consuassumptions mous practical importance, mers in digital markets, but since for obvious reasons it must also serve to proof economic theory, if in mote innovation and techthe market in question thenological development, be re is room for only one comclearly drafted and consispany, this company serves it efciently and tently applied, and especially, it must estacan easily avoid the entry of competitors witblish a legal framework in which conduct is hout even having to apply anti-competitive evaluated on its merits, distinguishing proprices or carry out exclusionary practices. from anti-competitive ones. It is also imporThe debate between the different antitrust tant to be aware that case-by-case analysis economic schools of thought varies between (so necessary in the face of innovative busiresorting to sectoral regulation (as is done ness models and evolutionary and dynamic with utilities, energy, transport, telecommumarkets) is more typical of antitrust analysis nications, and so on) to discipline that marthan ex-ante regulation. ket, and simply applying competition law. The position taken by the EC is that digital In accordance with these methodological platforms are ‘winner-takes-all’ markets, principles, Professor Hovenkamp points out and it is therefore necessary to create a new a series of factors that must be examined in ex-ante regulatory tool to control their ecoorder to determine whether a digital market nomic power. is a lasting natural monopoly, and which we will contrast here with the EC's proposal.
3. The alleged basis for the ex-ante intervention: digital platforms as ‘winner-take-all’ markets
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A) Lack of effective and stable competition between companies in the market
B) Stable dominant position and existence of entry barriers
There is something that is ignored by the EC in its analysis (even though it can be easily perceived in the reality of digital markets): the fact that most digital platforms have competitors in at least some of the markets in which they operate.
As opposed to the abovementioned apriorism that digital platforms are ‘winnertakes-all’ markets, the empirical evidence and the simple observation of reality seem to suggest that they are markets like any other, which have their peculiarities just like other markets do. The DMA proposal repeatedly refers to ‘entrenched and durable position’ (for example, Recital 21), but does not provide any single empirical basis for such a statement.
A competitive market is constantly changing, and the market shares of the companies operating in it are constantly uctuating. These markets are usually characterised by economies of scale, network effects and lack of interoperability. Regarding the latter, its presence would prevent there being a single winner in the battle of technology, and therefore nding ourselves faced with a natural monopoly. Therefore, if the participants in a market can freely change the standard, it will not be congured as a ‘winnertakes-all’ situation. For example, the competitive structure of a market can be ensured depending on whether the characteristics and performance of the product or service in question favour ‘multi-homing’ or not. The opposite occurs when users of a certain technology (one’s computer's operating system, for example) opt for one particular system, which excludes the rest (if a user has Windows installed, it is complicated and not without risk to install Linux). Naturally, this happens because the marginal cost of using two competing products outweighs the benet the user gets. If a certain level of data portability is ensured, it is impossible a priori to establish which platform will dominate the market in the long term, let alone predict how long its dominant position will last.
Antitrust policy applied to anti-competitive behaviour only has to ‘worry’ about a dominant position if it is lasting over time, and if the existence of entry barriers prevents potential competitors from entering that market. If markets are contestable, competitors will exert pressure on the incumbent to lower the supra-competitive prices it will usually be imposing. Therefore, neither in the United States (Section 2 of the Sherman Act) nor in the European Union (Article 102 of the TFEU) is the existence of a dominant position prohibited as such, but rather the abuse thereof. It should also be remembered that antitrust intervention does not come free of charge; it has an enforcement cost that must be contrasted with the hypothetical social cost of the monopoly or dominant position. An exercise in procedural economy must be made to calculate whether it is protable to intervene, also because of the risk of incurring a Type 1 error (False Positive).
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The proposed DMA not only disregards dominance as a prerequisite, but it does it also without the need to demonstrate anticompetitive effects
The proposed DMA not only disregards dominance as a prerequisite, but it does it also without the need to demonstrate anticompetitive effects. This statement on page 8 of the proposed Regulation is somehow alarming: the need to enforce competition law anyhow, ‘given that a gatekeeper may not necessarily be a dominant player, and its practices may not be captured by Article 102 TFEU if there is no demonstrable effect on competition’. C) Decreasing costs and network effects As explained by economic theory, if the market under examination is a natural monopoly, and the incumbent is charging competitive prices, no competing undertaking (having the same cost structure and handling a similar degree of technology) can successfully face it, even without the dominant undertaking engaging in exclusionary practices. Hence, even in the case of a natural monopoly, the dominant undertaking may well be displaced by the entry of a new technology, or a lower-cost competitor. Although it is true that decreasing marginal costs and gro-
wing consumer acceptance of the product favour ‘size’ and can end up turning this market into a natural monopoly, we must take into account - especially in the digital ecosystem - the presence of network effects, both direct (the value of the good increases as the number of users on the same side of the platform increases) and indirect (the value increases when the users on the other side of the platform increase). For a large doctrinal sector, the presence and intensity of these network effects in markets dominated by digital platforms constitute an insurmountable entry barrier for new competitors. However, as stated in the University of Chicago Stigler Center's 2019 Digital Platforms Report, such negative externalities on competition are easily overcome through the establishment of standards. The platform, as the point of connection between these two distinct but interdependent groups, must optimise the combination of participation and price, to maximise its benet. As has been shown in many publications, this interdependence must be considered when dening the relevant market, assessing market power, and proving the existen-
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ce of restrictive practices. For example, if Uber raises the tariffs it pays to its drivers, it will get more drivers, but this will be a disincentive for users; if it lowers tariffs, the opposite phenomenon will occur. This is why a two-sided digital platform, of the type described as ‘transactional’, is not necessarily a natural monopoly; it competes with other digital platforms (in the example above, with Cabify) and with traditional market operators (taxis). D) Product differentiation Even if we are facing decreasing costs and the presence of signicant network effects, product differentiation would lead to competition between platforms, which would prevent qualifying a market as a ‘winnertakes-all’. Indeed, while the incumbent company in a natural monopoly can drive a rival out of the market simply by applying a competitive price to a product similar to the monopolised one, if the entrant offers a sufciently different product or service, it faces a different demand curve, which makes room in the market for a new competing company. If there is product differentiation, there is no basis for claiming that natural monopolies exist. Possibly the area in which this economic phenomenon has been least successful is that of internet searches. Although there are different algorithms, and there are variations between the formats, the way of presenting results, and the type of information they offer, search data for 2020 puts Google's market share at 92%, Bing's at 2.5%, and no other operator has more than 2%. How is such a
preponderance of a single company possible? For the EC, the explanation is obvious: Google distorts its searches to favour its own services, and this justied the sanction in 2017 in the Google Search (Shopping) case. There is one thing, however, that the ne of more than 2.4 billion euros does not explain; if the cost to consumers of switching search engines (switching costs) is practically zero, why did they not switch to other alternatives? Because they felt ‘cheated’ by the falsication of searches, wouldn't that be the logical reaction? As is well known, one of the essential functions of a digital platform is to minimise consumers' search costs, through data storage and the use of algorithms, and hence the immense economic value of the classication of search results, and how they are presented. For precisely this reason, the most plausible explanation for Google's overwhelming market share seems to be that it is the search engine that consumers prefer, because they perceive it as the best on the market. 4. In search of a theory of harm: the (counter)example of ‘self-favouring’ As is known, an essential element of applying the prohibition against abuse of dominance, contained in Article 102 TFEU, is the theory of damage: conduct by a dominant undertaking cannot be considered anticompetitive if no harm is found to its competitors (exclusionary abuses) or consumers (exploitative abuses). In this respect, the practice of self-favouring is undoubtedly the main factor in the application of competition
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rules to digital platforms. Recent doctrinal contributions have already been made on this subject and we refer to them for an indepth study. In this section, we will briey characterise and critically analyse their application in the Google Shopping and Google Android cases. Last August, Professor C. Bergqvist rightly pointed out in Promarket (the Stigler Center's online publication), in a contribution with the suggestive heading of ‘SelfFavouring in the Digital Economy and the Role of Antitrust’: ‘Even at the risk of oversimplifying, it is difcult to escape the perception that the digital economy is very prone to self-favour’. In fact, none of those who appeared before the US Congress last July and who met under the acronym GAFA have been spared, in recent years, accusations of allegedly anticompetitive practices of self-favouritism in the European Union (see the recent cases brought against Amazon and Apple, which are added to the already ‘classic’ Facebook and Google cases). The question is not so much whether such conduct takes place or not, but whether it is punishable from an antitrust point of view, and to what extent it is detrimental to consumers. Once again, the different approaches followed by European and US competition authorities in this respect clearly reect the ‘transatlantic gap’ that currently exists in market regulation in the digital era. While in Europe we are engaged in a combination of regulatory interventions (the proposal we are examining here is a good example of
this) and antitrust sanctioning cases, in the United States they are limited to the latter, and in very exceptional circumstances. More generally, it can be said that the discourse in Europe is built on the double premise that the technological giants are making unjustied prots at the expense of consumers' interests, and that competition law can intervene at any time, easily and without cost. We believe that both starting points are wrong, and if we add the apriorism that digital platforms are natural monopolies and the secular European culture of market interventionism, the result is the EC's proposal for an ex-ante regulation tool and the more than 8 billion euros in nes that have accumulated for Google to pay after the decisions of 2017, 2018 and 2019. Is this the way to build a European digital market? Is this how we are going to create a technological industrial network in the old continent that can compete with North American or Asian companies? An article in The Economist magazine (’Europe takes on the tech giants’, March 23rd - 29th 2019, pp. 19 and following), after analysing all the issues we are discussing here, noted that out of the 20 best companies in the world in the digital eld, 15 are American, yet only one is European. The article concluded the analysis of the digital sphere with the harsh sentence that, for many, Europe is seen as ‘a wasteland for business enterprise and the spiritual cradle of bureaucracy’. The EC's recent proposal has as an immediate precedent: the well-known report Competition Policy for the Digital Era, made public in April 2019, which calls for a ‘more vigo-
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rous approach’ in the application of competition rules in the digital eld, and where these are insufcient, for more sector-specic regulation. One of the premises that we nd most objectionable in the Report is the one contained in its Chapter 2, where, in characterising these markets, it states that ‘experience shows that large incumbent platforms are very difcult to dislodge’. As we have been arguing in this Weekend Edition, experience indicates precisely the opposite. Rather contradictorily, the Report adds: ‘although there is little empirical evidence of the efciency cost of this difculty’. Moreover, the following conclusion ensues in the Report, which is - in our opinion - chilling for the development of digital markets in Europe: From the perspective of competition policy, there is a reasonable concern that dominant digital rms have strong incentives to engage in anti-competitive behaviour. All these factors have an enormous bearing on the way competition takes place in the digital economy; they require vigorous enforcement of competition law and justify adjustments in the way this law is applied.
The assessment made by a wide range of commentators in the 2019 Report is that the EC should take a more cautious approach to competition law enforcement in digital markets, and consider why and how it should proceed before embarking on regulatory reform. It is somehow ironic than when advocating for the ‘proportionality’ of the instrument (page 5 of the proposed Regulation), stressing that the list of obligations foreseen has been limited to only certain practices, the proposal refers to those practices ‘for
which there is sufcient experience’. There is just one decision (Google Shopping) regarding self-preferencing. Is that really ‘sufcient experience’? In both the Special Advisors’ Report and the proposed DMA Regulation, something is missing that is also missing from the two Google penalty decisions mentioned below: a solid theory of damage based on data and facts. This is expressed categorically by Professor Pinar Akman in her assessment of these pronouncements by the EC. Raising the practice of self-favouritism to the category of an antitrust infringement -of abuse of a dominant position, contrary to Article 102 TFEU - requires more than Brussels' rm conviction that the American giant must be stopped. In the Google Shopping case, DG COMP found that search results were being falsied in order to give unjustied advantages to Google’s own services of price comparators in shopping, and this earned it a penalty of more than 2.4 billion euros in 2017. It is difcult to understand what theory of harm the EC uses to justify the sanction: rather than self-favouritism it spoke of search bias and discrimination against competitors, but at the same time it does not reject the company's freedom to shape the results in this way. Moreover, given that no one is obliged to use Google's search engine, and that it is free for users, its business model is based precisely on monetising searches through its other services. Does it have to become an unprotable model because of the obligation imposed to ensure absolute ‘neutrality’ in results? This explains why the US Federal Tra-
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de Commission (FTC) decided in 2013 not to continue with sanctioning proceedings against Google, and also justies a large part of the appeal that Google has lodged before the General Court against the EC's decision. In the Google Android case, DG COMP imposed the highest ne in the history of competition law enforcement in Europe, over 4.3 billion euros, for the licensing terms of the Android smartphone operating system, which includes the pre-installation of some Apps (such as Google Search or Google Chrome), allegedly giving the US company an anti-competitive advantage over its rivals. In this case, unlike the previous one, the theory of harm does appear to be more robust (a dominant company bundling its products to exclude those of its competitors and paying its customers to prevent access to equally efcient competitors). What is not clear is whether the facts of the case and the economic analysis of the relevant market justify its application. Indeed, regardless of whether it is a case of self-favouritism, or tie-in abuse, or abuse in related markets (monopoly and leveraging), the assumptions on which the EC relies raise serious questions: about the importance it attaches to mobile apps in internet trafc; the fact that Apple is not considered a competitor in that segment; or the failure to assess supply-side substitutability in addition to demand-side substitutability. Not to mention the key question: if Android is free, open source, and the Apps can be uninstalled at no cost, what would consumers gain if their development is restricted ? Therefore, the 2018 decision in the Google Android case has also been much discussed, and of course the American company has also appealed before the General Court.
Does the classic theory of exclusionary behaviour apply to the ‘self-preferential treatment’ described in Chapter 4 of the Report? We should be grateful that the EC, when announcing last year the third large ne on Google in the Ad Sense case (in this case it was ‘only’ 1.5 billion euros) reminded us that Article 102 TFEU does not impose a ban per se on this type of conduct, and that a nding of infringement requires a case-by-case study and an analysis of effects. However, despite these well-intentioned statements by Commissioner Vestager, it seems that a ruling by the Court of Justice - such as the 2017 decision in the INTEL case - will be necessary for the EC to reconsider its treatment of commercial practices by leading companies in high-tech markets.
5. Final remarks In general, we can conclude by highlighting the enormous importance of the EC’s DMA proposal, the outcome of which will undoubtedly reshape not only competition law, but the entirety of digital markets in the EU. It is doubtful whether the proposals contained in the DMA fully comply with the fundamental rights framework (namely, the freedom to conduct a business) or constitutional principles (such as proportionality and nondiscrimination). This is so mainly because, as we have shown earlier, the way new regulatory obligations are framed rely on the arbitrary option for open systems where access is granted, and mandatory interoperability is imposed.
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The DMA proposal is simply disregarding the basic rights and principles of legality, proportionality, and presumption of innocence When imposing certain obligations on the so-called gatekeepers, regardless of them being dominant or of its conduct producing anticompetitive effects, the DMA proposal is simply disregarding the basic rights and principles of legality, proportionality, and presumption of innocence. A more factual, legal, and economically based analysis of the antitrust treatment of digital platforms is also more in line with fundamental rights and constitutional principles, and should therefore be followed. Not all platforms are equal, not all are necessarily
‘winner-takes-all’ markets, not all exhibit the same network effects or the same entry barriers. This will help avoid the ‘exceptionalism’ that usually surrounds markets on two or more sides: they are markets, just like the rest, with their peculiarities, of course, but not essentially different. It is at odds with the non-discrimination principle, and disproportionate, to label a platform as ‘gatekeeper’. The labelling in those terms also disregards previous case law. Finally, it is not the intention here to state categorically that the practice of selffavouritism is not anti-competitive, and that competition law does not therefore have to examine and sanction it. But it should be noted that the practice can also be procompetitive. That is why its antitrust assessment must be made carefully, by examining the facts, and by assessing the risks of intervention against companies that develop innovative products and services of a technological nature which benet consumers.
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Intermediary Liability, Fundamental Rights and the Digital Services Act Christina Angelopoulos
1
After almost 20 years, these principles are about to be rehomed. In its proposal for an EU Digital Services Act (DSA), published Since the turn of the century, the centrepiece on 15 December 2020, the European Comof the EU’s legal framework for the liability mission has announced an ambitious packaof intermediary service providers has been ge of intermediary liability rules. While confound in the E-Commerce Directive (ECD). rming that the key principles set out in the This contains a set of ‘safe harbours’, ‘imECD, including the prohibition of general munities’ or ‘liability exemptions’ that monitoring obligations, reshield intermediaries from main valid, the draft act liability in a horizontal manwould see this, as well as ner, namely in all areas of the safe harbours, deleted law. The safe harbours are The European Commission from the ECD and transcomplemented by the ECD’s controversial ban has announced an ambitious ported to the DSA. on general monitoring oblipackage of intermediary The move follows a repetigations. This has been cloliability rules tion of the ban on general sely linked in the interpremonitoring obligations in tative case law of the CJEU the hot-button 2019 Direcwith the requirements of tive on Copyright in the Dithe EU’s Charter of Fundagital Single Market (DSM mental Rights (the CharDirective or CDSMD). This contribution ter). Measures violating the prohibition on will examine whether the further recontexgeneral monitoring obligations have been retualisation of the ban in the DSA is likely to peatedly found to undermine the essence of affect its meaning and application and, if so, providers’ freedom to conduct a business what the consequences for fundamental (Article 16 of the Charter) and end-users’ rights might be. The answer depends on a freedom of expression and information four-way interaction between the CJEU’s ca(Article 11 of the Charter), as well as their se law on the ban as currently found in the right to the protection of their personal data ECD, the fundamental rights dimension of (Article 8 of the Charter). this case law, the interpretation of the ban’s
1. Introduction
1. Lecturer in Intellectual Property Law at the University of Cambridge. This article incorporates previous research undertaken by the author.
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CDSMD twin and the proposed provisions of the draft DSA. While on paper the proposal recognises the crucial role which the ban on general monitoring obligations plays for maintaining the required fair balance of fundamental rights in the online world, its practical implications are harder to chart.
2. The Current Legislative Framework: the ECD and CDSMD The ECD’s safe harbour regime incorporates three immunities, each dedicated to a different type of intermediary service: ‘mere conduit’ services (Article 12 ECD), ‘caching’ services (Article 13 ECD) and ‘hosting’ services (Article 14 ECD). A separate set of conditions governs each of the safe harbours. Over the years, debate has focused heavily on the hosting safe harbour. According to Article 14 ECD, a service provider may not be held liable for content it stores at the request of end-users, as long as: (a) it does not have actual knowledge of the illegality of that content and, as regards claims for damages, awareness of facts or circumstances from which the illegality is apparent; or (b) upon obtaining such knowledge, it acts expeditiously to remove or to disable access to the content.
The reach of the safe harbours does not extend to injunctive relief. Instead, all three safe harbours contain express permissions in their nal paragraphs that enable the imposition of orders on the providers of information society services by ‘courts and administrative authorities’ to ‘terminate or prevent an infringement’.
The reach of such orders, as well as the sources of the knowledge and awareness upon which the hosting safe harbour depends, are controlled through Article 15(1) ECD: the ban on general monitoring obligations. This prohibits Member States from imposing general obligations on intermediaries that provide one of the services covered by a safe harbour to monitor the information which they transmit or store, or to actively seek out facts or circumstances indicating illegal activity. The denition of the Article 15 ban has proved highly controversial. The debate has rested on the meaning of the word ‘general’. No detailed information on the envisaged interpretation of the provision is given in the ECD. Recital 47 of the E-Commerce Directive provides some limited guidance by contrasting ‘monitoring obligations of a general nature’ with monitoring obligations imposed in a ‘specic case’. On this basis, one interpretative school of thought holds that any obligation to monitor all or most of the content on a provider’s system in general amounts to a general monitoring obligation. This approach rests on the distinction in the wording of Article 15 ECD between general obligations on providers ‘to monitor the information which they transmit or store’ and general obligations ‘actively to seek facts or circumstances indicating illegal activity’. While Article 15 ECD bans both, the distinction suggests they cover different behaviours. Arguably, the rst refers to the supervision or review of the use of service by end-users and the second to obligations to locate illegal content.
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Commonly referred to as ‘filtering’, these mechanisms have emerged as a major focus of the policy debate in the area of intermediary liability
Others argue that monitoring obligations should be understood to be ‘general’ only if the provider is placed under an obligation to locate any kind of illegal content on its services in general. According to this view, if the obligation is limited to identifying specic illegal content that has previously been brought to the provider’s attention, the monitoring obligation is rendered ‘specic’. While some proponents of this view suggest that such ‘specic’ monitoring should only be allowed when imposed by an injunctive order to address activity declared to be illegal by a court, another line of thinking views notications provided by interested parties as a possible way of ‘specifying’ the illegal content. Which interpretation prevails has enormous practical implications, as it determines whether and, if so, when obligations to employ content recognition/identication technology may be imposed on intermediaries. Commonly referred to as ‘ltering’, these mechanisms have emerged as a major focus of the policy debate in the area of intermediary liability. If the rst denition of general monitoring is adopted, ltering must be excluded, as it requires examining each pie-
The legality of filtering obligations has taken on particular urgency in light of sector-specific legislative EU initiatives
ce of content handled by an intermediary. If the second approach is correct, ltering is compatible with Article 15(1) ECD, as long as it is done pursuant to a court order or notication. Crucially, the consequences for fundamental rights are signicant. In its case law, the CJEU has suggested that obligations on providers to use lters may have a negative impact on the freedom to conduct a business of internet intermediaries (Article 16 of the Charter), on online freedom of expression and information (Article 11 of the Charter) and on the protection of end-users’ personal data (Article 8 of the Charter). This is because ltering requires the development or purchase of costly and complicated technology, representing a signicant burden on providers. Filters are also notorious for overblocking, as a result of false positives that mistake lawful for unlawful content. Finally, they require the systematic analysis of data; depending on content passed through the lter, this could include users’ personal data. In the meantime, the legality of ltering obligations has taken on particular urgency in light of sector-specic legislative EU initiatives. The current proposals for a Terrorist Content Regulation have been criticised for,
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depending on which version prevails, obliging providers to lter content and thus violate both Article 15(1) ECD and the Charter. While the nal text of this has yet to be agreed, vigorous debate has erupted in the area of copyright in light of the adoption in April 2019 of the Directive on Copyright in the Digital Single Market (DSM Directive). Article 17 of this Directive introduces a new liability regime for what it labels ‘online content-sharing service providers’ (OCSSPs). According to the complicated denition given in Article 2(6) of the Directive, these are platforms whose main purpose is to enable the storage by end-users of large amounts of copyright-protected content in a public way and which organise and promote that content for prot-making purposes. The objective of Article 17 is to address the so-called ‘value gap’, a perceived misalignment between the volume of creative content accessed globally by users through the services of OCSSPs and the revenue that this access generates for the holders of copyright in that content. The ‘value gap’ was relied upon in the run-up to the adoption of the CDSMD to argue that the use of the ECD’s hosting safe harbour in order to shield content-sharing platforms from liability interfered with the fair remuneration of rightholders. To address this situation, Article 17 CSDMD states that OCSSPs, when giving the public access to the works that were uploaded by their users, perform an act of communication to the public or of making available to the public and therefore infringe copyright. While Article 17(3) species that such providers cannot rely on the safe harbour of Article 14 ECD, an alternative esca-
pe clause is offered by Article 17(4) CSDMD. In order to avoid liability, OCSSPs are obliged to attempt to license the use under Article 17(1). Otherwise, a set of duties of care is imposed on them, compliance with which unlocks an immunity. To qualify, the provider must have: (a) made best efforts to obtain an authorisation, and (b) made, in accordance with high industry standards of professional diligence, best efforts to ensure the unavailability of specic works and other subject matter for which the rightholders have provided the service providers with the relevant and necessary information; and in any event (c) acted expeditiously, upon receiving a sufciently substantiated notice from the rightholders, to disable access to, or to remove from their websites, the notied works or other subject matter, and made best efforts to prevent their future uploads in accordance with point (b).
In order words, OCSSPs must show that they undertook ‘best efforts’ to obtain authorisation, to ensure infringing works for which right-holders have provided identifying information do not appear on their platform, and to take down and prevent the reposting of any infringing content brought to their attention. Arguably, sub-paragraphs (b) and (c) in ne require the use of ltering technology. Indeed, the Commission’s initial proposal for the DSM Directive openly contemplated that copyright should be enforced by providers through ltering. While the reference to ltering was removed from the nal text, at the very least this can be said to incentivise platforms to use such technology in order to demonstrate ‘best efforts’.
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This being said, the meaning of ‘best efforts’ is unclear. Moreover, the nal text of the Directive incorporates a set of countervailing safeguards for the rights of platforms and end-users: Article 17(5) CDSMD depends the application of Article 17(4) on the principle of proportionality; Article 17(7) CDSMD requires respect for a sub-set of exceptions and limitations to copyright, whose introduction into national copyright law is made mandatory for users of OCSSPs; Article 17(9) CDSMD requires the operation of complaint and redress mechanisms; nally, Article 17(8) CDSMD states that the application of Article 17 may not lead to a general monitoring obligation. The question therefore becomes whether these safeguards counteract or reinforce the incentives to adopt ltering technologies embedded in Article 17(4) CDSMD. If the imposition of a ltering obligation on a provider would be disproportionate (and consequently a risk to its freedom to conduct a business), Article 17(5) might release them from any ltering obligation in the event of a less burdensome alternative. Such alternatives do exist in the form of for example the suspension of the infringing end-user, terms and conditions or pop-up notications prohibiting copyright infringement, or community moderation systems. Similarly, if lters are not able to distinguish between copyright-infringing copying and the copying of copyright-protected content that is allowed by an exception or limitation to copyright (thereby risking negative effects on endusers’ freedom of expression), arguably Article 17(7) means that providers cannot be expected to adopt them in order to enforce co-
pyright. On the other hand, it might also be argued that the impact of ltering on freedom of expression can be effectively managed ex post through Article 17(9)’s complaint and redress mechanisms. Ultimately, the issue appears to come down to whether any ltering undertaken pursuant to Article 17 can be reconciled with Article 17(8)’s general monitoring ban and the relationship between this ban and the implicated fundamental rights. If the ban on general monitoring can be interpreted so as to allow ltering under certain circumstances, is this permissible under the Charter? Already, the compatibility of Article 17 CDSMD with the Charter of Fundamental Rights of the European Union has been challenged before the CJEU. Just over a month after the Directive’s adoption, the Republic of Poland brought an action against the European Parliament and the Council seeking the annulment of Article 17(4)(b) and (c) in ne or, in the alternative, Article 17 in its entirety. Poland alleges incompatibility of these provisions with the right to freedom of expression and information guaranteed by Article 11 of the Charter. According to the application, the provisions require ltering, thereby undermining the essence of freedom of expression and information and the recognition of proportional and necessary limitations to copyright that this requires. Depending on the details of the Court’s answer, it could have implications beyond Article 17 CDSMD and copyright to the determination of the kind of obligations that can be imposed more horizontally on providers under the DSA.
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‘the Member States must […] take care to rely on an interpretation of the directives which allows a fair balance to be struck between the various fundamental rights protected by the Community legal order’.
3. The CJEU’s Interpretative Case Law
The CJEU’s current case law on the issue has been ambiguous. So far, preliminary rulings have been delivered in two areas of The refrain of ‘fair balance’ has since been law: intellectual property rights and defamarepeated in numerous decisions on the oblition. While initial judgments on intellectual gations of intermediaries to take action to enproperty rights appeared to take a strong poforce intellectual property law. As a general sition against ltering obligations, both as a rule, the CJEU judgments set up a tripartite result of Article 15(1) ECD and the need to dynamic: the fundamental rights of intellecrespect relevant fundamental rights, a recent tual property owners have to be balanced decision in the area of defaagainst the fundamental mation endorses them unrights of the intermeder certain circumstances – Initial judgments on intellectual diary, as well as those of without however consideproperty rights appeared to end-users. ring the fundamental rights take a strong position against implications. Information on how to filtering obligations, without achieve a ‘fair balance’ 3.1 Intellectual Property however considering the has grown in detail over Rights time. So, the 2008 judgfundamental rights ment in L’Oréal v eBay The leading CJEU decision implications. concerned the permission intermediary liability ble scope of injunctions and fundamental rights is obliging eBay, an onliPromusicae. Here, the CJEU was called ne marketplace whose website facilitates upon to clarify whether EU law requires that customer-to-customer sales, to prevent futuMember States impose a duty on internet acre infringements of trade marks by custocess providers to retain and communicate, in mer-sellers using its services. Here, the the context of civil proceedings, the persoCourt noted that, in light of Article 15 ECD, nal data of their users in order to ensure an efthe provider cannot be obliged to actively fective protection of copyright. In view of monitor all the data of each customer-seller the paucity of guidance in the directives, the in order to prevent any future infringement Court turned for answers to the EU primary of intellectual property rights via its website law and the Charter of Fundamental Rights. (paragraph 139). It instead suggested two enFor this purpose, it interpreted the circumsforcement mechanisms that would be pertances of the case as a clash between fundamissible: (a) the suspension of the perpetramental rights. The Court then stated that, in tor of the infringement of intellectual protransposing the directives and implementing perty rights in order to prevent further infrinthe transposing measures, gements of that kind by the same person in
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respect of the same right (paragraph 141); and (b) the adoption of measures to make it easier to identify users (paragraph 142). It then warned that any measure imposed must strike a fair balance between the relevant rights and interests (paragraph 143). While the decision focused only on obligations to prevent any future infringements and remained silent on whether obligations to prevent infringements of pre-identied marks would be compatible with Article 15 ECD, it is notable that its two proposed measures did not include such obligations. This is in line with the Advocate General’s Opinion in the case, which suggested that an appropriate limit for the scope of injunctions be found in a ‘double requirement of identity’, so that they target infringements of the same trade mark by the same infringing user (paragraph 182). The subsequent twin decisions in Scarlet v SABAM and SABAM v Netlog moved the discussion from permissible towards impermissible measures. The cases concerned the legality of injunctions ordering the implementation of ltering technology to prevent copyright infringement by, respectively, an internet access provider and a host service provider. The Court observed that the contested systems would require the active observation of all activity by all end-users, which it identied as general monitoring. As a result, they would be incompatible with Article 15 ECD. While the judgments repeated the L’Oréal language of ‘any future infringement’ (paragraph 40 of Scarlet and paragraph 38 of Netlog), the cases in fact concerned monitoring targeted only at identifying infringements of the specic works belonging to the SABAM repertoire. This
lends support to the more expansive denition of the ban on general monitoring obligations. More importantly, the judgments concluded that the systems at issue would fail to achieve a ‘fair balance’ with competing fundamental rights. This was because they would impose complex, costly and permanent burdens on the intermediary’s business models, thereby violating Article 16 of the Charter (paragraph 48 of Scarlet and paragraph 46 of Netlog). In addition, they would also interfere with users’ rights: rst, they would require the identication, systematic analysis and processing information concerning all users, including non-infringing ones. Given that such information allows for the identication of those users and therefore constitutes protected personal data, the measures would also infringe Article 8 of the Charter (paragraph 51 of Scarlet and paragraph 49 of Netlog). Secondly, they would risk failing to distinguish adequately between lawful and unlawful content and thus the potential blocking of lawful communications. This would bring them out of line with Article 11 of the Charter. In this regard, the Court emphasised the fragmented nature of European copyright law that makes the accurate identication of infringements difcult: as the Court noted, exceptions to copyright vary from one Member State to another (being only partly harmonised by Article 5 of the Information Society Directive), while works may also fall within the public domain at different times (paragraph 52 of Scarlet and paragraph 50 of Netlog). As a result, the Court rejected the contested measure as incompatible with the Charter.
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In UPC Telekabel Wien, the CJEU once again applied the notion of fair balance. This time, the issue was a blocking order by courts against internet access providers for the enforcement of copyright. The Court held that these will strike a ‘fair balance’ with that intermediary’s freedom to conduct its business, provided that the intermediary is given the right to choose the measure it will apply to achieve the blocking effect and that it is able to avoid coercive penalties for breach of the injunction by showing that it has taken all reasonable measures. The measures taken must also strike a fair balance with users’ right to freedom of expression. To this end, they must be ‘strictly targeted, in the sense that they must serve to bring an end to a third party’s infringement, without thereby affecting internet users from accessing lawful information’. Importantly, according to Telekabel, end users should be given locus standi to defend their rights against measures that do not achieve a fair balance. Subsequently, in McFadden, the Court considered three options for injunctive orders requiring a Wi-Fi provider to prevent third parties from using its network to infringe copyright: the termination of the network, the password-protection of the network and the examination of all communication passing through the network. The third of these options was rejected from the outset as contrary to Article 15 ECD. The Court noted that it would necessitate ‘monitoring all of the information transmitted’, this amounting to a general monitoring obligation, prohibited under Article 15 ECD (paragraph 87). Notably, contrary to L’Oréal, no reference was made here to ‘any future infringement’
– indeed, the case concerned the infringement of a single pre-identied phonogram, about which the defendant had been notied. In McFadden, therefore, the Court clearly embraced the broader of the two interpretative approaches to the notion of general monitoring. This suggests that ltering obligations are not compatible with the Article 15 ECD ban. The Court then applied the Telekabel balancing approach to the remaining two enforcement options. It found that an obligation to terminate the network would cause a serious impairment of the provider’s freedom to conduct a business by categorically preventing the provision of the Wi-Fi service when less restrictive options were available. However, requiring that the provider password-protect its network was determined to strike a ‘fair balance’, as long as end-users were obliged to reveal their identity in order to obtain the password. Indeed, according to the Court, such an approach would preserve the ‘essence’ of both the freedom to conduct a business and the freedom of expression. 3.2 Defamation L’Oréal, the SABAM cases and McFadden all point towards an incompatibility of ltering obligations, including ltering for the purposes of locating infringements of specic pre-identied intellectual property rights, both with Article 15 ECD and with the Charter. Instead, other measures are greenlighted as enforcement options that can be imposed on intermediaries: the identication and suspension of infringing end-users, the removal of specic instances of infringe-
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ment and the password-protection of the intermediary’s network. More recently, a change of direction can be observed. In Eva Glawischnig-Piesczek, a defamation case, the CJEU held that an injunction ordering a host to remove content which is identical or equivalent to content that has previously been declared by a court to be unlawful would be compatible with Article 15 ECD, as long as the ‘monitoring of and search for’ the equivalent content covers only content which is essentially unchanged, so that the host provider would not have to carry out an independent assessment its legality (paragraph 53). The location of such identical or equivalent future postings would require monitoring all of the content hosted by the intermediary in precisely the way that was ruled out in McFadden. Not having been requested by the national court, no fundamental rights analysis was undertaken by the CJEU in GlawischnigPiesczek. This could explain the CJEU’s sudden change of tack. That being said, the Opinion of Advocate General (AG) Szpunar did suggest that permitting injunctions to search for identical content ensures a fair balance between the fundamental rights involved. According to the AG, such injunctions would not require sophisticated technology and therefore would not represent an extraordinary burden on the intermediary. They would accordingly be compatible with Article 16 of the Charter (paragraph 63). Likewise, according to the AG, the removal of information identical to information that has been characterised as illegal would not impair third parties’ freedom of expression, tho-
se third parties in any case being entitled to challenge the removal of the content before a court (paragraph 65). The AG probably had in mind hash-ltering, although whether or not that represents complicated technology that is capable of preserving freedom of expression is disputed. At the same time, the AG was of the opinion that obligations to locate information equivalent to that declared to be illegal by a court would not be compatible with a fair balance. This was because the relevant solutions would be costly for the provider to develop and would result in censorship, so that the freedom to conduct a business and freedom of expression would suffer (paragraph 74). 3.3 Pending Judgments Absent a Charter-based analysis by the Court in Glawischnig-Piesczek, the fundamental rights implications of the ltering it envisages can only be hypothesized. Happily, two forthcoming judgments are likely to shed light on the matter. One is the Polish challenge to Article 17. The other is joined cases Peterson v YouTube and Elsevier v Cyando, currently pending. On 16 July 2020, Advocate General Saugmandsgaard Øe handed down his Opinion on Peterson. The cases concern the liability of hosting providers YouTube and Uploaded for copyright-infringing content posted onto their services by their users. The question arises as to whether the host providers are obliged to monitor their services to ensure compliance with copyright law in order to enjoy the protection of Article 14 ECD. The AG opined that such an obligation would con-
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ict with Article 15(1) ECD (para. 185). Moreover, it would undermine the balance between the different interests at stake struck by Article 14 ECD, to the detriment of endusers’ freedom of expression (paragraph. 186). The AG drew a distinction in this regard between information, such as images of child sexual abuse, whose illegal nature is manifest (paragraph 188 and footnote 179) and information, such as copyrightinfringing content, whose illegal nature requires delicate legal analysis (paragraph 188). In the latter case, according to the AG, notications by right-holders are necessary in order to provide evidence substantiating the illegal nature of the information (paragraph 190). In the absence of such evidence, the provider is left susceptible to its incentives to mitigate its liability by over-blocking, with adverse effects on freedom of expression (paragraph 189). The AG also rejected the option of requiring hosting providers to prevent information from being re-uploaded once a notication has been provided (paragraph 192). He noted that Article 14 ECD establishes a system of notice-and-take-down, not notice-andstay-down. While removing information requires the service provider to react to a notication, blocking information would necessitate the introduction of ltering technology. According to the AG, this would form too excessive an obligation for those businesses that do not have the necessary resources to implement ltering technology (paragraph 194).This suggests a lack of fair balance with the freedom to conduct a business.
By contrast, the AG applied the Court’s reasoning in Glawischnig to nd that staydown obligations may be imposed on providers by means of injunctions (paragraphs 195 and 217). At the same time, the AG distinguished in this regard between technologies such as MD5 lters or hash lters, which can only be used to locate and block identical les, and more complicated technology that allows for the detection of other les that use a work in the same way as a preidentied infringement (paragraph 222 and footnotes 207-210). He warned that not all providers will have the resources to employ the latter. In addition, according to the AG, users may not be prevented from using the content legally (paragraph 222). The AG recommended leaving it to national courts to determine what can realistically be required of providers within these parameters. Given the complex balances at play in copyright, it is not easy to see how any technological tool – current or future – could both remove equivalent infringements and safeguard legal uses.
4. The Digital Services Act According to Article 71(1) of the draft DSA, Articles 12-15 ECD will be deleted. Under the proposal, they are to be replaced with the Articles 3, 4, 5 and 7 of the DSA and, according to Article 71(2) of the draft, any references to them should be construed as references to those replacement provisions. This would suggest that any existing CJEU case law on Articles 12-15 ECD should be understood as applying directly to Articles 3, 4, 5 and 7 of the DSA. In fact, these provisions reproduce Articles 12-15 ECD almost word-
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tering in search of les containing identical or equivalent content? According to Article 8(2)(a), these orders must contain one or more exact uniform rePromisingly, the Explanatory Memorandum source locators and, ‘where necessary, addi(EM) does single out respect for fundamentional information enabling the identicatal rights as a signicant concern underlying tion of the illegal content concerned’. The rethe Proposal. It notes that the Proposal ‘will ference to exact locators suggests take-down preserve’ the ECD’s prohibition of general orders, but ‘additional information’ muddies monitoring obligations and recognises that the waters. Although, as noted above, there this is ‘crucial to the required fair balance of are many ways in which fundamental rights in the the reappearance of cononline world’, explicitly retent could be achieved ferencing all three fundaand information other mental rights identied as than the content’s locarelevant in the CJEU case law. What is more, the EM Promisingly, the Explanatory tion may be necessary to implement these, this warns that biases embedMemorandum (EM) does single could also be a nod toded in both notication and ltering tools may disout respect for fundamental wards GlawischnigPiesczek-type ltering proportionately affect cerrights as a significant concern obligations. tain groups, contrary to the principle of nonunderlying the Proposal Indeed, the EM (see pp. discrimination. 3-4) anticipates that Article 8 orders may require The safe harbours anchor providers to prevent the the DSA’s further, more inreappearance of illegal novative, provisions. Articontent. At the same ticle 8(1) of the draft DSA me, it notes that such orders must comply addresses court or administrative orders to with the ban on general monitoring obligaact against ‘specic items of illegal content’. tions as interpreted by the CJEU and that the No indication is given of when an item of illeDSA leaves this case law unaffected. A footgal content will be ‘specic’: does the word note references Glawischnig-Piesczek, igno‘item’ suggest that such orders must be tarring the earlier and stricter intellectual progeted to individual les or would the speciperty decisions. Whether the law of fundacity be determined by the content, as in Glamental rights imposes additional limitations wischnig-Piesczek? The answer will deteron the reach of ltering obligations is not admine what kind of action a provider can be dressed. The EM goes on to refer to ‘techniordered to take against such ‘specic items’: cal systems of protection and identication the removal or disabling of access of a le and […] automated recognition made possiidentied as containing illegal content or lfor-word. Like the ECD, the DSA also fails to dene the meaning of general monitoring.
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ble by digital technology’, but only to note that the safe harbours should not preclude their development and effective operation – this of course being a different matter to their imposition by law. Interestingly, Article 8(1) of the draft states that providers must, upon receipt of these ‘specic’ orders, without undue delay, inform the relevant authority of the action taken pursuant to the order. This suggests that the decision on the type of action may be left to the providers. This would be in line with Telekabel, which raises the question of locus standi for end-users to defend their fundamental rights. According to Article 43, recipients of the service will have the right to lodge a complaint against providers alleging the infringement of the DSA. Such infringement could be based on Article 12(2) of the proposal, which obliges providers, when imposing restrictions on the information provided by end-users using their service, to act with ‘due regard to the rights and legitimate interests of all parties involved, including the applicable fundamental rights of the recipients of the service as enshrined in the Charter’. Similar wording is used in relation to action taken following a notication of illegal content. Article 14 of the draft DSA builds on the hosting safe harbour to introduce a fullyedged notice-and-action regime. Article 14(2)(b), in combination with Article 14(3), suggests that only notices that contain a clear indication of the electronic location of the content, in particular the exact URL(s), should be considered as capable of giving rise to actual knowledge or awareness capable
of disabling the safe harbour. However, like Article 8(2)(a), the provision also makes reference to the inclusion, where necessary, of other information enabling the identication of the illegal content. This could suggest that the Proposal foresees notication-triggered ltering obligations, along the lines of those that proved so controversial in the context of Article 17 CDSMD. At the same time, though specically for ‘online platforms’, Article 17 of the draft introduces internal complaints-handling systems. According to Article 17(1), complaints may be lodged against three types of actions against illegal content: (a) the remove or disable access to the information; (b) the suspension or termination of the provision of the service, in whole or in part, to the recipients; (c) the suspension or termination of the recipients’ account. No reference is made to ltering mechanisms to prevent the upload or re-upload of the content. Article 12 does mention both algorithmic decisionmaking and human review, and Recital 57 warns of the fundamental rights risks of algorithmic systems used by very large platforms, but both provisions appear to view such measures as voluntary rather than required. As the DSA’s denition of ‘online platforms’ in Article 2(h) of the draft DSA sounds eerily similar to the CDSMD’s OCSSPs, this is particularly interesting. The result could be the emergence of two very different legal regimes for the moderation of illegal content by such platforms: one for copyright and one for everything else. Alternatively, it could also signal that the nal version of Article 17(4) CDSMD should not be read as requiring ltering: other less drastic
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options are available. The latter interpretation would align best with the CJEU’s case law on ltering and fundamental rights. In fact, the relationship between the proposed DSA and the CDSMD is not entirely clear. Article 1(5) of the DSA draft states that its provisions are without prejudice to Union law on copyright and related rights. At the same time, Recital 12 denes the ‘illegal content’ the DSA is intended to address as including the non-authorised use of copyright protected material. Presumably, the DSA should be interpreted as setting the background rules that act as default where no copyright-specic lex specialis set out a different regime. If however, Article 17(8) CDSMD were to be given a more exible interpretation in order to accommodate ltering by OCSSPs, it would seem that this should not be seen as affecting the interpretation of Article 15(1) ECD and, consequently, Article 7 DSA.
5. Conclusion The provisions of the E-Commerce Directive lend themselves to conicting interpretations. Is Article 15 ECD compatible with ltering obligations imposed on internet intermediaries? The case law of the CJEU has been ambivalent. In a series of early decisions in the areas of copyright and trade marks, the Court took a tough stance against ltering, nding it incompatible not only with Article 15 ECD but, more importantly, with the need for a fair balance between all affected fundamental rights, including the freedom to conduct a business, freedom of
expression and information and the protection of personal data. More recently, in the defamation case of Glawischnig-Piesczek, the CJEU appears to have relaxed its approach, green-lighting court-mandated ltering for the purpose of locating and removing content that is identical or equivalent to content that has been determined to be unlawful. The implications of this bifurcation are not easy to assess, particularly given that Glawischnig-Piesczek did not discuss the impact of fundamental rights, which might explain its deviation from earlier decisions. The newly-released DSA proposal repeats and re-contextualises the ban on general monitoring obligations. It is unclear whether this affects its meaning. The draft adopts notably neutral language that refrains from providing a clear denition of general monitoring or taking a position on the compatibility of ltering with fundamental rights. Instead, the Proposal appears to defer to the case law. This cautious approach perpetuates the uncertainty surrounding the legality of ltering obligations, however it also results in a more resilient text, less open to accusations of incompatibility with fundamental rights of the kind that have plagued the CDSMD, and more likely to survive the CJEU’s pending judgements in the Polish Article 17 challenge and in Peterson. This being said, perhaps as a result of Glawischnig and the AG’s Opinion in Peterson, the proposal appears marginally more open to ltering obligations resulting from a court order than a notication. The sector-specic
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The main areas of concern regarding filtering and fundamental rights remain court orders and copyright
rules that were adopted as part of the recent CDSMD for ‘best efforts’ to prevent the reupload of copyright-infringing content by online platforms following a notication by copyright owners and which have been widely understood to incentivise, if not require, ltering, are not explicitly reproduced in the DSA’s more broadly-applicable regime. Taken at face value, this suggests that, for the time being, the main areas of concern regarding ltering and fundamental rights remain court orders and copyright. Resolution can only come from the CJEU
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News Highlights Week 14 to 18 December 2020
EU-Ukraine Association Agreement: final dispute settlement ruling on Ukrainian ban on wood-exports Monday 14 December
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Under the EU-Ukraine Association Agreement’s dispute settlement procedure, a ruling was made that Ukrainian ban on exports of all unprocessed wood is incompatible with Article 35 of that Agreement. Ukraine has been ordered to terminate the ban as soon as possible.
EU Hydrogen Market: Council adopts Conclusions Monday 14 December
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To further the European Green Deal and goals to make the EU carbon-neutral by 2050, the European Commission unveiled a EU Hydrogen Strategy, on which the Council of the EU has now adopted Conclusions endorsing and requesting the Strategy to be elaborated.
Fundamental Rights Agency publishes report on Artificial Intelligence
Commission publishes report on implementation of Damages Directive
Monday 14 December
Monday 14 December
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A report was published by the Fundamental Rights Agency on how Articial Intelligence impacts fundamental rights in the EU. It sets out a number of opinions on how to comply with the Charter and ECtHR.
The European Commission published a report on the Antitrust Damages Directive (2014/104), which sets out rules coordinating the enforcement of antitrust rules by competition authorities and the enforcement of those rules in damages actions before national courts.
Council adopts resolution on security and encryption
Council and Parliament reach informal agreement on new Cybersecurity Competence Centre
Monday 14 December
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The Council of the EU adopted a resolution on ‘security through encryption’ and ‘security despite encryption’, for the EU to ensure the ability of law enforcement authorities to exercise investigative powers and to use regulatory powers to help shape global rules and standards.
Monday 14 December
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Negotiators from the Council and the European Parliament reached a provisional agreement on a proposal to set up a European Cybersecurity Industrial, Technology and Research Competence Centre and a network of national coordination centres.
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Commission approves Dutch aid sche- New Own Resources Decision publisme amounting to 30 billion euros to hed and applicable from 1 January support reducing greenhouse gas emis- 2021 sions Tuesday 15 December READ MORE ON EU LAW LIVE Monday 14 December
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The European Commission approved, under EU State aid rules, a 30 billion-euro Dutch aid scheme to support projects to reduce greenhouse gas emissions in the Netherlands (Stimulering Duurzame Energieproductie or SDE++).
Ofcial publication was Council Decision (EU, Euratom) 2020/2053 of 14 December 2020 on the system of own resources of the EU and repealing Council Decision 2014/335/EU, Euratom, an essential piece of the EU budgetary framework.
EBA: Opinion on the interplay between the EU Anti-Money Laundering Directive and the EU Deposit Guarantee Schemes Directive
New advisory opinion requested from ECtHR: Supreme Administrative Court of Lithuania asks about compatibility of impeachment legislation with ECHR
Tuesday 15 December
Tuesday 15 December
The European Banking Authority issued an Opinion to the European Commission and to national authorities with proposals on how to strengthen the connection between the EU legal frameworks on anti-money laundering and terrorist nancing, and deposit protection.
The Supreme Administrative Court of Lithuania requested an Advisory Opinion, concerning impeachment law and compatibility with the right to free elections, from the European Court of Human Rights under the new mechanism established by Protocol No. 16 to the ECHR.
EU-LAC statement on Sustainable Deve- ECtHR: right to property breached if lopment in the context of the EU- trial costs are disproportionately high Mercosur Trade Agreement Tuesday 15 December Tuesday 15 December
The European Union and the Latin America and Caribbean countries (EU27-LAC) held an Informal Ministerial Meeting in Berlin on Monday to discuss ratication and entry into force of the EU-Mercosur Trade Agreement.
The European Court of Human Rights ruled in National Movement Ekoglasnost v. Bulgaria (application no. 31678/17) that the Bulgarian Supreme Administrative Court breached Article 1 of Protocol No. 1 to the ECHR by ordering an environmental association to pay excessive costs.
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Commission presents Communication on first review of the EU’s implementation of UN Convention against Corruption
General Court dismisses Junqueras’ action for annulment against European Parliament’s decision to give away his seat as MP
Tuesday 15 December
Wednesday 16 December
The European Commission presented a Communication on the Implementation Review Mechanism of the United Nations Convention against Corruption (UNCAC), announcing its intention to launch the review process on how the EU is complying with the UNCAC.
The General Court (T-24/20) dismissed the annulment action brought by Mr Oriol Junqueras i Vies, leader of a Catalan pro-independence party and former VP of the Catalan regional government, against the statement by the European Parliament that his seat as MP was vacant.
Council Conclusions on EU-wide animal welfare label for food: potential future legislation
EU institutions reach agreement on Mandatory Transparency Register
Wednesday 16 December
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Taking into account the welfare of animals as an important EU issue and that animals are sentient beings, as protected under Article 13 TFEU, the Council of the European Union has approved Conclusions for an EU-wide animal welfare label on food.
Wednesday 16 December
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The European Commission, European Parliament, and Council of the EU have reached a nal political agreement on the creation of a mandatory and reinforced Transparency Register that will apply to all three institutions.
The Euro Group is not an ‘EU body’, Court of Justice rules
Mylan challenges EMA’s validity rejection of generic version of Aubagio
Wednesday 16 December
Wednesday 16 December
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In a judgment delivered in Grand Chamber, the Court of Justice ruled in Council v Chyrsostomides (C-597/18 P, C-598/18 P, C-603/18 P and C-604/18 P) that the Euro Group is not an EU body and its decisions are not subject to review in a damages action against the EU.
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Mylan Ireland Ltd lodged an action for annulment (T653/20) before the General Court, now published, challenging a decision of the European Medicines Agency (EMA) not validating Mylan’s application for a generic version of the medicinal product AubagioTM.
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General Court: International Skating Union rules are contrary to EU competition law Wednesday 16 December
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European Court of Human Rights rules that Ljubljana Bank is not an NGO and therefore Slovenia has no standing: Slovenia v. Croatia
The General Court delivered its judgment in International Skating Union v Commission (T-93/18), an appeal against a decision of the European Commission nding that the International Skating Union’s (ISU) eligibility rules were contrary to Article 101 TFEU.
Wednesday 16 December
EU Cybersecurity Strategy: reform of rules, cyber diplomacy and cyber defence
AG Tanchev: exclusion of judicial review of resolutions of the Polish National Council of the Judiciary regarding appointment of judges is contrary to EU law
Thursday 17 December
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A new EU Cybersecurity Strategy was presented, aiming at protection from cyber threats, and will be followed by proposals for a Directive on measures for high common level of cybersecurity and a new Directive on the resilience of critical entities.
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The European Court of Human Rights ruled that it does not have jurisdiction to hear the case in Slovenia v. Croatia (application no. 54155/16), concerning unpaid and overdue debts to Ljubljana Bank from various Croatian countries.
Thursday 17 December
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Advocate General Tanchev delivered his Opinion in A.B. e.a. (C-824/18), advising the Court of Justice to rule that a Polish law excluding the right of appeal in individual cases regarding the appointment of Supreme Court judges violates Article 19(1) TEU.
Council of the EU endorses amend- Court of Justice: generalised deficienments to EU capital market rules in con- cies concerning judicial independence text of COVID-19 recovery in Poland does not justify refusal of execution of EAWs issued by Polish authoREAD MORE ON EU LAW LIVE Thursday 17 December rities On behalf of the Council of the European Union, EU ambassadors endorsed amendments to EU capital market rules – including the MiFID II Directive, Prospectus Regulation and EU securitisation framework, to support economic recovery from the COVID-19 crisis.
Thursday 17 December
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The Court of Justice, sitting in Grand Chamber, ruled in Openbaar Ministerie (C-354/20 PPU and C-412/20 PPU) that the existence of evidence of systemic deciencies concerning judicial independence in Poland does not in itself justify the refusal to execute any European Arrest Warrant issued by a Polish judicial authority.
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Grand Chamber of the Court of Justice: Slovenia breached EU law by unilaterally searching and seizing documents connected to the tasks of the ESCB at the premises of the Central Bank of SloThursday 17 December
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The Grand Chamber of the Court of Justice ruled in Commission v Slovenia (C-316/19) that Slovenia failed to full its obligations under EU law by unilaterally seizing documents at the Central Bank of Slovenia connected to the tasks of the European System of Central Banks and the Eurosystem, and by failing to cooperate sincerely with the European Central Bank.
Hungary’s migration laws are contrary to EU law, Court of Justice rules Thursday 17 December
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The Court of Justice delivered its judgment in Commission v Hungary (C-808/18), nding that Hungary failed to full its obligations under EU concerning procedures for examining asylum applications and for returning third-country nationals staying illegally in national territory.
European Parliament approves longterm EU budget for 2021-2027: Multiannual Financial Framework Thursday 17 December
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The European Parliament yesterday voted on and provided its consent to the draft Council Regulation laying down the multiannual nancial framework for the years 2021 to 2027, the long-term EU budget for 2021-2027.
EU law does not prevent Member States requiring stunning procedure prior to animal slaughter in the context of freedom of religion Thursday 17 December
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In a case on the conicting interests of animal welfare and freedom of religion in the context of animal slaughter under EU law (Centraal Israëlitisch Consistorie van België and Others, C-336/19), the Court of Justice, sitting in Grand Chamber formation, ruled Member States can legally require a reversible stunning procedure which cannot result in the animal’s death.
ECtHR: delay in taking possession of a property due to State rules on moratorium on evictions in line with ECHR
Extradition of EU citizen to third country only possible after consultation with Member State of nationality
Thursday 17 December
Thursday 17 December
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The European Court of Human Rights dismissed the claim in Béla Németh v. Hungary (application no. 73303/14) that delay in taking possession of newly acquired property due to Hungarian rules regarding moratorium on evictions breached the right to property and the prohibition of discrimination under the ECHR.
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The Court of Justice ruled that an extraditing Member State must consult the Member State of the nationality of the person in question before extraditing that person to another Member State, in its Grand Chamber ruling Generalstaatsanwaltschaft Berlin.
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Portuguese Constitutional Court requests first ever preliminary ruling from Court of Justice
Legislative programming: EU’s legislative priorities for 2021 and policy objectives for 2020-2024
Thursday 17 December
Friday 18 December
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The Portuguese Constitutional Court made its rst ever request for a preliminary ruling, in the context of a dispute over the internal tax treatment of second-hand cars imported from other Member States and environmental considerations in the tax calculation.
The Council of the EU, the European Parliament, and the European Commission issued a Joint Declaration on legislative priorities for 2021, as well as Joint Conclusions on policy objectives and priorities for 2020-2024. This is the rst time that this kind of cooperation includes a multiannual perspective to facilitate long-term planning.
Amendment of the Aarhus Regulation: Council adopts draft position on improving access to justice in environmental matters
Gradual lifting of travel restrictions: new updated list of third countries
Friday 18 December
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The Council of the EU adopted a draft position containing its general approach towards the Commission’s proposal on the amendment of the Aarhus Regulation 1367/2006 in order to extend the right to access to justice in environmental matters.
Council of the EU reaches agrees on general approach on European climate law Friday 18 December
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The Council reached an agreement on a general approach on the Commission’s proposal for a European climate law, which purports to introduce into EU legislation the objective of a climate neutral EU by 2050 in line with the European Green Deal, including a new EU greenhouse gas emissions reduction target of at least
Friday 18 December
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The Council of the EU revised the list of countries for which travel restrictions should gradually be lifted as of 16 December 2020, as an update to Council Recommendation 2020/912 on the temporary restrictions on non-essential travel into the EU, issued on 30 June 2020.
Mergers: Commission approves conditional acquisition of Fitbit by Google Friday 18 December
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Following an in-depth investigation, the European Commission approved under the EU Merger Regulation the acquisition of Fitbit by Google. The approval is conditional on full compliance with a commitments package offered by Google.
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Revised OLAF Regulation approved by Parliament and Council Friday 18 December
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Following the Council of the EU’s approval on 4 December, the European Parliament adopted the text on the new OLAF Regulation, which is aimed at promoting collaboration between the European Anti-Fraud Ofce (OLAF) and the new European Public Prosecutor’s Ofce (EPPO), which is expected to start running in early 2021.
Insights, Analyses & Op-Eds Adoption of the first EU Human Rights Sanctions Regime: What is at Stake?
Rule of law-conditionality as interpreted by EU leaders
By Celia Challet
By Aleksejs Dimitrovs
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READ MORE ON EU LAW LIVE
Op-Ed on the EU’s rst ever global human rights sanctions regime, a major development enabling the EU to adopt targeted restrictive measures to address serious human rights violations and abuses worldwide against individuals, entities and bodies, including State and non-State actors responsible for, involved in or in association with such violations and abuses.
Op-Ed on the European Council’s Conclusions on the progress of the rule of law-conditionality mechanism linked to the EU’s budget (MFF and ORD), analysing commitments it makes on behalf of other EU institutions such as the Commission, and the implications of this on the principle of institutional balance.
AG Hogan’s Opinion in ECA v Pinxten: on the constitutional role of penalty powers over ECA Members and of their standard of conduct
Court of Justice: protected geographic indications and designation of origin prohibit the use of a characteristic shape or appearance of a product covered by a registered name
By Dolores Utrilla
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Insight on the Opinion of Advocate General Hogan in the Full Court case Court of Auditors v Karel Pinxten, which raises some fundamental questions regarding the standard of conduct required from Members of the ECA (and, in general, of EU institutions) and the scope of the Court of Justice’s penalty powers in this regard.
EULAWLIVE stay alert keep smart
By Bernd Justin Jütte
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Analysis of the judgment in Syndicat interprofessionnel de défense du fromage Morbier, in which the Court of Justice interprets the scope of protection of designations of origin and geographical indications to cover not only the registered name, but also the shape or appearance or characteristic of the relevant product.
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Library - Book Review
By Petra Jeney
Madalina Moraru, Galina Cornelisse, Philippe de Bruycker (Eds.)
Law and Judicial Dialogue on the Return of Irregular Migrants from the European Union
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A review of a book that ‘offers a timely and exceptionally thorough look at the judicial complexities involved in giving effect to the EU Return Policy’, including ‘a wealth of information and analysis of how these topics have been perceived by the courts, both at the national and the supranational levels’, and which, overall, is considered to be ‘an indispensable point of reference for anyone following European migration policies’.
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