New EU Digital Services Act Published; INTA Advocated for Changes

Published: December 16, 2020

Following the European Commission’s publication of its long-awaited Digital Services Act (DSA) legislative proposal on December 15, INTA highlights aspects related to the role and responsibilities of online actors with regard to illegal content online, including counterfeiting.

The Association had previously weighed in on the DSA during the public consultation as part of its ongoing advocacy efforts.

The legislative proposal is a Regulation reviewing EU E-commerce Directive 2000/31/EC. As a Regulation, it will directly apply in all 27 member states, with no need for national implementing legislation. E-commerce platforms and social networks are among those affected by the proposal.

INTA’s Actions

INTA’s earlier comments to the Commission on the DSA included several best practices from the Association’s publication “Addressing the Sale of Counterfeits on the Internet.” The publication offers a roadmap for voluntary collaboration between all the parties involved in fighting counterfeiting, and provides recommendations for search websites, online marketplaces, payment service providers, and trademark owners, as well as for social media, logistics, domain name registrars, and registry companies.

The Association’s submission also highlighted the unintended effects of the EU General Data Protection Regulation on intellectual property enforcement. This included its effects on a platform’s ability to share data with rights holders and the redaction of data, including the owner’s name and contact information, within the domain name registration data system known as WHOIS. If trademark owners are unable to determine a counterfeiter’s identity, they are unable to enforce their rights and protect their consumers from the harms of substandard counterfeits, INTA argued.

Relevance for INTA Members

The Commission’s DSA legislative proposal introduces a definition of illegal content as “any information, which, in itself or by its reference to an activity, including the sale of products or provision of services is not in compliance with Union law or the law of a Member State, irrespective of the precise subject matter or nature of that law.” The reference to products targets counterfeits, as established by recital 12 in the text (“the sale of non-compliant or counterfeit product”).

The proposal maintains the status quo of the 2000 E-commerce Directive with regard to the prohibition of a general monitoring obligation or active fact-finding obligations from online actors when it comes to illegal content, including counterfeiting (Article 7).

The proposal also contains provisions on the exemption of liability of providers of intermediary services. More specifically, it includes the conditions under which providers of mere conduit (Article 3), caching (Article 4), and hosting services (Article 5) are exempt from liability for the third-party information they transmit and store.

It further provides that the liability exemptions should not be disapplied when providers of intermediary services carry out voluntary own-initiative investigations or comply with the law (Article 6). Finally, it imposes an obligation on providers of intermediary services with respect to orders from national judicial or administrative authorities to act against illegal content (Article 8) and to provide information (Article 9).

The proposal imposes transparency reporting obligations in relation to the removal and the disabling of information considered to be illegal content or contrary to the providers’ terms and conditions (Article 13), as well as for online actors to put in place mechanisms to allow third parties to notify the provider of the presence of alleged illegal content (Article 14).

The proposal imposes transparency reporting obligations in relation to the removal and the disabling of information considered to be illegal content or contrary to the providers’ terms and conditions (Article 13), as well as for online actors to put in place mechanisms to allow third parties to notify the presence of alleged illegal content (Article 14), an obligation for online platforms to provide an internal complaint-handling system with respect to decisions taken in relation to alleged illegal content (Article 17). It also obliges online platforms to engage with certified out-of-court dispute settlement bodies to resolve any dispute with users of their services (Article 18), and further obliges them to ensure that notices submitted by entities granted the status of trusted flaggers are treated with priority (Article 19) and sets out the measures they are to adopt against misuse (Article 20).

The proposal also obliges online platforms to receive, store, and make reasonable efforts to assess the reliability of, and publish specific information on, the traders using their services where those online platforms allow consumers to conclude distance contracts with those traders (Article 22). Online platforms are also obliged to publish reports on their activities relating to the removal and disabling of information considered to be illegal content or contrary to their terms and conditions (Article 23). The section also includes transparency obligations for online platforms relating to online advertising (Article 24).

The proposal also includes the creation of national “digital services coordinators” who, like other designated competent authorities, are independent and perform the control tasks of the implementation of the DSA rules impartially, transparently, and in a timely manner.

Process and Timeline

Now published, the DSA legislative proposal moves to the co-legislators—the EU Parliament and the Council of 27 member states—to amend and adopt their own positions on the proposal. This process is expected to start in early 2021. Once each co-legislator has adopted its own position (tentatively, in the third or fourth quarter of 2021), they will start the inter-institutional negotiations. In that stage, the European Commission, Parliament, and Council will work to adopt a single text that will then come into force. This could tentatively happen by the first part of 2022.

INTA will now begin a thorough analysis of the proposal through its Anticounterfeiting, Enforcement, and Internet Committees, and advocate its position to the co-legislators.

INTA’s Europe Representative Office, based in Brussels, Belgium, represents the Association’s 1,700 members across Europe (including those in EU and non-EU member states, and Russia and the Commonwealth of Independent States). Working in collaboration with staff at INTA’s headquarters in New York City, the Europe Representative Office leads the Association’s policy, membership, marketing, and communications initiatives throughout the region. To learn more about INTA’s activities in Europe, please contact  [email protected] and @INTABrussels.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.

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