COVID-19 has shifted the dynamic between EU regulators and 'Big Tech'

At the beginning of this year, online platforms were facing a future filled with regulatory risks in the shape of the forthcoming EU Digital Services Act, which is expected to review aspects of the e-Commerce Directive and propose new horizontal rules for technology companies. Online Platforms were also facing a controversial implementation of the Directive on Copyright in the Digital Single Market and the Platform to Business Regulation, among other measures impacting their sectors.

Moreover, these initiatives have been presided over by 'Super-Commissioner' Margrethe Vestager, who has the formidable dual powers of EU competition chief and digital policy maker, as well as a track record of taking a firm line with "Big Tech". The division of duties between Vice-President Vestager and the Internal Market Commissioner, Thierry Breton, who has the daily responsibility for digital policy, had yet to be tested.

Just a few months later and COVID-19 has shifted the public policy debate in ways that we may only fully appreciate in years to come. Within the EU executive, Commissioner Breton has also emerged at the forefront of the Commission's response to the pandemic.

Technology companies have garnered goodwill within the EU executive for their reactivity in the current crisis. In March, for example, Netflix CEO Max Hastings agreed in a call with Commissioner Breton to slightly decrease the video quality on the company's streaming service in Europe for 30 days, to reduce the strain on internet service providers. Commissioner Breton praised this "very quick action" to keep the internet running smoothly.

The lockdown period has demonstrated vividly just how central to our lives digital services have become: from enabling us to work remotely to connecting socially with family or friends, and from enabling us to order food from our favourite restaurants to offering entertainment in the form of streamed content.  This crisis will have left EU decision-makers with little doubt as to the crucial contribution of online platforms to the economy and society.

Yet the sheer importance and popularity of the services provided by technology companies could prove to be a double-edged sword − insofar as such services may be perceived as essential, legislators could be more inclined to intervene with robust regulation.  Specific issues which have been thrown into relief by the current crisis include:

• Conditions for Platform Workers: the crisis has put a spotlight on the working conditions and sick pay for those working in the "gig economy", from workers in warehouses to those delivering takeaway food and drivers for online mobility companies;
• Online misinformation: despite renewed efforts by some high profile social media and video-streaming companies, the role of these services in curbing the spread of detrimental and sometimes dangerous misinformation about COVID-19 has come under intense scrutiny. At the same time, the relationship between online platforms and news media publishers is being tested in France by the country's early implementation of the Directive on Copyright in the Digital Single Market;
• e-Commerce: online sales of face masks and medical supplies that are not what they purport to be have raised concerns about the safety of some products offered via online platforms;
• Privacy: while the development of "corona apps" that enable contact tracing has been welcomed by some government representatives as a tool that will help to relax travel restrictions, concerns have also been raised regarding personal privacy and data protection issues.

Along with many other parts of the economy, technology companies have shown a willingness to do their part in tackling the effects of the coronavirus. There are already indications that when EU legislators return to their desks they will expect this momentum to continue in order to address perceived problems in the digital ecosystem.

The Maltese MEP, Alex Agius Saliba (Socialist & Democrats group),  who is responsible for drafting the Internal Market Committee’s forthcoming report on the Digital Services Act, recently welcomed the delay to the report which is now scheduled for September. In a Politico interview, he commented: "We’re discussing a new reality that is important to feature in our report."

At a recent conference organised by think-tank CERRE, Vice-President Vestager pointed to what she sees an ongoing need to have enforceable obligations on technology companies via the Digital Services Act package, which is now scheduled for the end of this year or beginning of 2021.

At the very least, legislators can be expected to re-evaluate their approach to regulating the digital economy in light of the lessons learned over the last months.  The COVID-19 crisis has shifted the dynamic between technology companies and legislators and both may need to adapt further to a new reality.

For further information contact Francine Cunningham.

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