The members of the EP Committee on Economic and Monetary Affairs exchange with Margrethe VESTAGER, Executive Vice-President of the European Commission in charge of Europe fit for the Digital Age, and Commissioner for Competition. The aim of the meeting is to cover the main objectives of both proposals and the new regime intended for digital services, Opening statements by Irene TINAGLI (S&D, IT), ECON Chair and the Commissioner. This transcription speech is the result of an automatic process. Check against delivery.

ECON Committee: Exchange of views with Margrethe VESTAGER, Executive Vice-President of the European Commission in charge of Europe fit for the Digital Age, and Commissioner for Competition: Opening remarks

SOUNDBITE (English), Irene TINAGLI (S&amp;D, IT), ECON Chair, -

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, Thank you very much, honourable chair, honourable members. It's indeed a pleasure to be here today. Thank you very much for the invitation to exchange views with you today on the two proposals into Services Act and Digital Markets Act.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, They form the basis of a major reform of our information space. I would like to thank you for your interesting debates about competition policy that has guided us for many years. I'm looking forward to continuing this debate on Mr. Epinck report on competition.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, I think here we will also see that the features or the the aspects of competition in the digital age that figure prominently. And I think it really shows the interest and the time committed in order for me to engage in these issues. And then, of course, the pandemic that we in is illustrating both the benefits and the challenges of digital services, if anyone were in doubts.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, And the challenges, they are indeed real. We saw that back in the days that Cambridge Analytica scandal. We saw that attempted coup at the Capitol Hill. These are not details. These are quasi extreme situations. We still have issues like the dissemination of hate speech, disinformation, manipulation of electoral processes, the sales of dangerous or counterfeit products on fair markets for small or smaller players than the digital giants.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, So we really have a lot on our plate in order to unlock the positive potential of the digital development that is still, I think, overwhelmingly there. But that doesn't change the fact that what we need now and what we are proposing to you is to put in place a single, ambitious European rulebook. The aim is is quite clear, what we want to create is a fair, open and competitive digital space.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, A digital space that will ensure equal and better protection for consumers across the union while allowing innovative companies to scale up and to to grow in the single market and, of course, to contribute to the economic recovery. Let me start with a Digital Services Act.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, Our approach has been clear from the beginning, and that was the decision, of course, to be taken to guide us in our thinking to intervene only where it's necessary and justified in order, of course, to leave space for innovation, for choice for consumers to see many, many different products and services.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, And this approach also has led us to carefully preserve what works in the e-commerce directive. The country of origin principle remains at the very heart of our internal market, the Digital services Act proposes measures to safeguarding this important principle.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, Then if you look at the conditional liability exemption for intermediary services, that has been one of the building blocks of the digital economy as we know it today, but we also seek to clarify a fundamental distinction between services, between a situation where services move away from their pure hosting role because they come more than than pure intermediaries in a commercial transaction, so more visible or being perceived more as the one actually doing the transaction.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, And the third thing, of course, I think that's really important no matter where we are in this debate, the provision of general monitoring. That's the fundamental principle when it comes to freedom of expression in the digital space. And we would want to maintain this. On the other hand, we are correcting an important shortcoming in the current system. We propose to put in place a framework of graduates. It's sort of due diligence obligations, and they apply asymmetrically.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, And this asymmetry is really important because the difference between a small platform and a giant platform of course, is obvious. So according to size nature reach of online online services, we have these asymmetries.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, For online platform, we establish the obligation to fight illegal content while empowering users to contest the removal of legal content, rules on the traceability of online sellers, so that rogue traders can be prevented from selling dangerous products or services in the single market. Thirdly, transparency obligations on advertising and on algorithms so that we can understand but also influence how decisions are platforms, how they affect our lives.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, As for the largest platforms, we also ask them to analyse the risks that they may pose to our societies and if risks are fine, that they will be mitigated. And this process also have to be audited by independent external auditors, as well as to be set under scrutiny by vetted researchers. Obviously, no rule is effective if not being properly enforced. Therefore, we propose quite an innovative and really robust enforcement framework.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, We propose an integrated European system of cooperation between authorities of the country, of the establishment and those of the country where the services are being delivered. And I think. This will not only improve the prospects of the enforcement of Interservices Act in itself, but also improve the enforcement of national and union law in general.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, Now, I would like to move to the Digital Markets Act. There are clear distinctions between the two proposals. First, the Digital Services Act addresses primarily societal risks posed by systemic platforms. The Digital Markets Act would target large platforms that acts as gatekeepers to consumers and their customers.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, The point is to say that digital platforms, they should be fair, they should be an open environment for businesses that depends upon them, for doing their business, for having access to their customers.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, And the point is also to say, well, in a marketplace, digital platforms, they should be challenged, they should be challenged by newcomers, they should not use their might and their power just to close challenges down. And you know, this, of course, as well as I do, we have been using our competition tools, we have been enforcing competition laws to solve the problems posed by digital gatekeepers.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, And competition law enforcement is an important and also an effective tool in tackling a number of the problems that we see, and we should remain vigilant in enforcing competition law. That being said, what we realised was that no matter how vigilant you are in enforcing competition law, well, you need more. We need to call upon regulation in order to solve some of the systemic problems that we find with platforms as such.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, And and this is why we want to complement sort of the specific case by case competition law enforcement with the ex-ante regulation able to tackle recurrent behaviour across all companies with a gatekeeping role. Also, digital markets are prone to tipping, and we know in such cases it's better to prevent than to cure. Once we are left to cure, the risk is, of course, that the harm is done. You will not only get well, but there will be a scar tissue.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, And this means that SME, small and medium sized businesses, innovators, they can be weakened, they can be kept from growing, they may even have to leave the market. And the Digital Market Act is building on the knowledge that we have acquired with competition enforcement, but also with sort of in-depth market research and understanding.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, And that's as the points also of the dynamics. That it will remain in that way, that we build on what we know from the specifics to make sure that that is also generally applied. With the Digital Single Market Act, we propose a comprehensive tool to act quickly and also with legal certainty for gatekeeper's, and this is a major paradigm shift.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, The DMA contains the criteria, as you know, to identify undertaking that acts as gatekeepers for one or more Core platform service, and all of whom, once designated by a commission decision, will have to comply with a number of well-defined Ex-ante obligations and prohibitions.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, Obligations and prohibitions. They cover many issues, like the combination of personal data, the use of data, data portability, fair access conditions to Core platform services or preferences, as well as obligation to report report on acquisitions and to audit profiling practises. This, I know, is a very important point for the Parliament.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, And let me finish then with a common point for the two regulations. We foresee a system of proportionate, progressive but dissuasive penalties ranging from substantial fines, six percent of annual turnover in the Digital Services Act and 10 percent in the Digital Markets Act, actually to temporary suspension of platform services, but also under the Digital market act as a last resort, the possibility of structural separation remedies.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, I hope you sense the same urgency as I do. I would use the metaphor to say, well, this is this is a wake up call without a snooze function. I really hope that we will have a good debate leading to a swift adoption.

SOUNDBITE (English), Margrethe VESTAGER,  Executive Vice-President of the European Commission, This is timely. This is now. And with these two regulations. But here we could make, I think, a giant shift as to how the digital market works in Europe. And I'm looking very much forward to work with you on that. So thank you very much for allowing me this introduction.

ECON Committee: Exchange of views with Margrethe VESTAGER, Executive Vice-President of the European Commission in charge of Europe fit for the Digital Age, and Commissioner for Competition: Opening remarks

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Digital single market

Digital Services and Digital Markets Act

ECON - Committee on Economic and Monetary Affairs