Online platforms, and their possible regulation, have been a much discussed topic in recent months.
For sanity’s sake, then, let’s remain focused specifically on UK government scrutiny and transposition of existing European regulations, communications, and strategies pertaining to online platforms.
- Communication on Online Platforms and the Digital Single Market Opportunities and Challenges for Europe
- Communication on Tackling Illegal Content Online Towards an enhanced responsibility of online platforms
Progress and developments:
- In April 2016 – before the Brexit vote – the House of Lords’ European Union Committee published a comprehensive inquiry report into online platforms and the digital single market, which makes for excellent academic reading, compensating for the fact that it was outdated two months later.
- In November 2017 the European Scrutiny Committee of the House of Commons published a review of the Minister for Digital’s response to the EC’s communication on tackling illegal content online. The Committee, as they do, sent the Minister some homework, including
- “We ask that the Government provide an account of the implications of withdrawal from the European Union for UK rights-holders concerned about EU-based infringements: i.e., in the absence of a UK-EU bilateral agreement, how would the switch to third-country status affect the extent to which UK rights-holders are effectively protected against EU-based copyright infringement, including the re-appearance of copyright infringing content, and able to seek enforcement against large-scale infringement within the EU?
- The Commission concludes that it will assess whether additional measures – which could be legislative – are needed to ensure the swift and proactive detection and removal of illegal content online. The Minister observes that this further work by the Commission “may in turn influence our negotiating objectives—especially if the EU considers legislation.” We ask the Minister to clarify what he means by this. Is the Government strongly against EU legislation in the areas that the Commission mentions? If legislation is proposed on these issues, how does the Minister anticipate it will modify the Government’s negotiating objectives?”
In June 2018 the ESC reviewed the communication on illegal content again and used it as an opportunity to ask questions which should have been addressed ahead of the Brexit referendum, not two years after it, on issues ranging from the eCommerce Directive to the DSM. Emphasis mine:
We have also taken note that the Government is proactively exploring related issues under the auspices of its Digital Charter, including whether the exemptions from liability created by the Electronic Commerce Directive (EC) 2000/31 should be modified, following the Prime Minister’s speech in Davos in which she observed that “the status quo is increasingly unsustainable as it becomes clear these platforms are no longer just passive hosts”. Given that the exemptions in the ECD are generally considered to have facilitated the growth of the digital economy, the Government’s willingness to review them indicates that it is willing to explore bold approaches in preparing the Charter.
This raises the prospect of the UK diverging from EU rules regarding the digital economy in the future. Such divergence would be consistent with the Prime Minister’s Mansion House speech, in which she observed that “the UK will not be part of the EU’s Digital Single Market” and that, given the fast-evolving nature of the digital economy, “it will be particularly important to have domestic flexibility, to ensure the regulatory environment can always respond nimbly and ambitiously to new developments”. Outside the EU it will be possible for the Government to adopt distinctive regulatory approaches to digital issues more rapidly than when acting in concert with 27 other Member States and the European Parliament.
However, a unilateral regulatory approach may also have negative consequences for the digital sector: divergence will recreate regulatory fragmentation between the UK and the EU, meaning that businesses would have to comply with multiple regulatory regimes, inhibit market scale (which is paramount for digital businesses, which seek to scale their operations as rapidly as possible), and potentially make larger, more integrated markets more attractive destinations for investment. Paradoxically, regulatory divergence in this area thus risks recreating the regulatory barriers the elimination of which was the underlying logic of the UK’s push for the EU to create a Digital Single Market.
We ask the Government to explain to us:
- the benefits of leaving the Digital Single Market and establishing an autonomous UK regulatory regime for digital, providing as many specific examples as possible;
- whether, given the Government’s former support for the creation of an EU-wide Digital Single Market, because of its potential to eliminate regulatory barriers to trade and create a scale market for digital, adopting UK-level regulatory approaches would not risk having the opposite effect (e.g. regulatory fragmentation, a reduction in market scale, increased costs for businesses who have to comply with multiple regimes); and
- whether the Government, given its intention to leave the Digital Single Market, has taken a strategic decision to prioritise distinctive UK regulatory approaches to the digital economy over minimising non-tariff barriers to trade in the digital economy between the UK and the EU, even if this will lead to some of the costs and negative effects described above.
We ask for a clear response to these questions by 25 July.