How can Europe reduce its digital dependence on large platform companies?
Foto: Denise Jans - Unsplash
In April 2022, an agreement was reached in the EU on two legislative packages aimed at increasing European digital autonomy: the Digital Markets Act (DMA) and the Digital Services Act (DSA). The DMA tackles the market power of very large online platforms, so called ‘gatekeepers’. The goal of the DSA is to create a safer online environment for European citizens and consumers and combat the distribution of illegal content online. In the coming months, the Rathenau Instituut will investigate what causes European digital dependence and how this dependence can be further reduced.
In short:
- The DSA and DMA include measures to give European governments and citizens more control over, for example, data usage, and to strengthen the supervision of a fair market online.
- The Rathenau Instituut investigates how European societies can become more digitally independent from large platform companies.
Digital independence
European societies are becoming increasingly dependent on multinational platform companies, such as Google, Amazon, Meta and Apple. This dependence is increasingly perceived as problematic by governments, civil society organisations, and citizens alike, as it puts a strain on public values such as safety and democratic freedoms.
For public duties regarding, for example, education, defence, or health care, European governments are dependent on large platform companies. Europe wants to change this. Europe also aims to make data more accessible to parties in its internal market. These data are now largely in the hands of non-European multinational platform companies. The pursuit of greater digital autonomy was recently explicitly mentioned in the new Declaration on European Digital Rights and Principles, and in the Dutch government's digitalisation strategy (Rutte IV).
For years, the Rathenau Instituut has been pointing out the social risks of our digital dependence on multinational platform companies. We have observed, for example, that large platforms increasingly provide the infrastructure for online public debate. The spread of disinformation, the rise of deepfakes, and political microtargeting are putting this public debate under pressure.
Measures in the Digital Markets Act
The DMA appears to reduce European dependence on the largest platforms. The act introduces new rules that are specifically aimed at the so-called gatekeepers. These are companies with a market capitalisation of at least 75 billion euros or an annual turnover of 7.5 billion euros and, additionally, at least 45 million users per month.
- Messaging apps such as WhatsApp or iMessage must become interoperable over the next four years, just as email is now. This means that users of WhatsApp, for example, should be able to send text messages, photos, videos, or voice messages to Signal, and vice versa.
- Gatekeepers must offer more choice to their users. For example, by breaking the monopoly of their app stores. To this end, there will be a ban on pre-installed software or apps that cannot be removed from the phone (such as the Apple Appstore, Safari or Chrome browsers). It must become possible for users to remove all apps from their devices that do not belong to the default settings. Users should also be able to decide whether to allow third-party apps and app stores to be part of the default settings.
- Apple and Google should allow and accept alternative payment systems, including in their own app stores. An app should be able to offer its own services directly through its own payment system. Users who download the app should be given the choice between the app's payment system or that of Google or Apple.
- It will be forbidden for gatekeepers to lead users to their own services first and to give these services priority over those of competitors. For example, they are no longer allowed to favour their own services in search results.
- Gatekeepers are no longer allowed to use the data of third parties (apps) that are providers within their platform. They must give third parties access to the data these third parties generate themselves through their own products and customers. Currently, gatekeepers use the data of third parties to develop their own products. This is no longer allowed under the DMA.
- Large platforms must be more transparent about the origin of personalised ads. In addition, they are not allowed to combine personal data or follow users (tracking) outside their own core platform services without permission.
- European competition authorities will have more power to conduct investigations. They will be able to impose high fines in the event of violations and sometimes even force a division. There will also be a reversal of the burden of proof: gatekeepers will have to demonstrate that their revenue model is fair, instead of competition authorities having to prove a monopoly.
Measures in the Digital Services Act
The DSA introduces new rules aimed in particular at the largest online platforms and providers of online intermediary services, such as hosting services and internet providers¹. The DSA contains stricter measures for online platforms (such as marketplaces and social media companies) and very large online platforms (Very Large Online Platforms, or VLOPs, and Very Large Online Search Engines, or VLOSEs). Companies are considered Very Large Online Platforms if they have a reach of at least 45 million users per month through their services. Online platforms and search engines can be fined up to 6% of their worldwide turnover for violations.
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New transparency obligations must give users insight into the parameters used by recommendation systems to recommend content to them. Users should be able to choose a recommendation system that is not based on profiling.
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Targeted advertising based on sensitive data will be prohibited (e.g. on sexual orientation, religion, ethnicity, etc.).
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Dark patterns will be prohibited. Online platforms and marketplaces are not allowed to nudge people into using their services, for example, by steering them towards making a certain choice through pop-ups. And cancelling or refusing a service must be just as easy as using it.
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Users will be in a stronger position to inquire into and challenge the decisions of content moderation platforms:
- Platforms should establish a notice & action mechanism where people can report allegedly illegal content.
- Users will be able to challenge content moderation decisions by platforms through out-of-court dispute resolution or through the courts.
- Platforms should establish a notice & action mechanism where people can report allegedly illegal content.
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External researchers will gain access to important data from online platforms. Civil society organisations will also get better access to public data to facilitate a broader understanding of the development of online risks that result from the way platforms function, such as the distribution of illegal content or the violation of civil rights.
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The DSA introduces an obligation for very large platforms to analyse the systemic risks they create and to take measures to counter and prevent these risks. Think of abuse of their systems and the spread of disinformation. This analysis must be carried out every year. The aim is to reduce the risks associated with, for example, the distribution of illegal content and the violation of users' fundamental rights.
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Supervision and enforcement at the national level will be entrusted to newly established independent Digital Services Coordinators who will be appointed for each EU member state and who will cooperate at the European level in the European Digital Services Council (EBDS). Supervision and enforcement of the very large online platforms (VLOPs and VLOSEs) will be entrusted to the European Commission, in cooperation with the EBDS.
- The European Commission can trigger a crisis response mechanism on the advice of national regulators, the Digital Services Coordinators. This means that the Commission can investigate the influence of large platforms on, for example, acute security or health crises and take measures to limit this influence, such as countering war propaganda. These measures should not apply for more than three months. This new element has been added in the context of the current war with Ukraine.
How will the DSA and the DMA reduce Europe's digital dependence?
In our Messages to Parliament on the DSA and DMA we advocate for increasing users' control over the use of their data and over recommendation algorithms on online platforms. The starting point for this should be making it easier for users to refuse data collection and to determine which data they wish to share. Online platforms should also give users mandatory insight into the reason why they receive certain content, plus the possibility to make changes if they no longer wish to receive that content.
The DSA and DMA include important measures to increase users' control over their data. For example, the DMA gives both corporate and individual European users more access to their data. The DSA also empowers users by allowing them to influence the way in which content is recommended to them and by giving them greater ability to appeal (in relation to decisions by platforms on removal of content).
In our Messages to Parliament, we underlined the importance of mandatory risk analysis (a due diligence obligation) in the DSA, which enables democratic oversight of the social impact of online platforms.
In short, the DSA and DMA include measures to reduce the digital dependence of European societies. The question is whether these measures are sufficient to achieve the desired European digital independence. This will partly depend on the effectiveness of the national supervisory bodies that will be established, the Digital Services Coordinators.
What will the Rathenau Institute research?
Governments, NGOs, and companies have already undertaken many initiatives for digital independence, such as the DSA and the DMA, but also PublicSpaces or Gaia-x. However, the size and diversity of these initiatives make it difficult to assess the extent to which these initiatives collectively address the main causes of dependence. In the coming months, the Rathenau Instituut will investigate the causes of European digital dependence and how this dependence can be reduced. Up until now, these causes have not always been made explicit in policy plans. We will also map out initiatives for digital independence and what causes they do and perhaps do not address.
¹ Based on press releases from both European Commission, European Council and European Parliament.
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