Att.:
22nd of December 2015
Position Paper on Regulatory environment for platforms, online intermediaries, data and cloud computing and the collaborative economy.Response to public consultation
To: DG CNECT
From: The Danish Chamber of Commerce
The Danish Chamber of Commerce would like to thank DG Connect for the opportunity to respond to this public consultation. The topics covered in this consultation are of interest to the 17.000 businesses and more than 100 trade associations that the Danish Chamber of Commerce represents.
We have chosen to do a position paper, instead of replying to the questionnaire because of our broad membership group makes it difficult to answer by tick-box. A more reasoned explanation is needed in this context and thus we have chosen to respond to the consultation as can be seen beneath. We have attempted consistency with the questions posed in the questionnaire by using the same headlines.
Objectives and general information:
The Danish Chamber of Commerce is a confederation representing Danish businesses. We have members that are both SMEs and micro enterprises. We are registered in the Transparency Register of the European Commission and the European Parliament with the identification number: 0330934426-12. We do not object to our response being used in a wider context if deemed helpful or necessary.
Online platforms
- SOCIAL AND ECONOMIC ROLE OF ONLINE PLATFORMS
We find the definition proposed to be too broad and insufficient in terms of addressing the challenges facing platforms and users of these. Especially if later work in this field is to lead to legislative proposals the definitions of platforms need to be far more specific. The different types of platforms would have to be dealt with separately. “Mere hosts”, intermediaries and actual sellers have very different business models and probably should have different obligations. This is true for both liability as regards illegal content and the provisions they can apply to both the suppliers and the consumers. The questionnaire is somewhat burdened by the fact that there is no distinction between the different types of platforms.
The advantages of using platforms for our members are primarily that it helps businesses to broaden their outreach and connect to and communicate with a larger groups of customers, businesses and stakeholders than would otherwise have been possible. In this context it is crucial that the intermediaries do not abuse their often dominant position, which they frequently achieve by virtue of the strong network effects in the online arena.
- USE OF INFORMATION BY ONLINE PLATFORMS
We generally find it important that platforms of any kind gives sufficient information to both their suppliers and the consumers about how the information they gather can and will be used. Many of the online platforms have a global outreach and it is important that they adhere to the data protection rules in all the geographical areas that they operate in.
- RELATIONS BETWEEN PLATFORMS AND SUPPLIERS/TRADERS/APPLICATION DEVELOPERS OR HOLDERS OF RIGHTS IN DIGITAL CONTENT
Our members are in some cases highly dependent on platforms. And there is a very real danger that these platforms are tempted to use practices that de facto constitutes abuse of their dominant position.
An obvious example is the many hotels who sell their rooms through booking-websites/platforms. The two largest players in this field are Expedia (who also owns travelocity.com, orbitz.com, hotwire.com, hotels.com, wotif.com) and Priceline (who also owns booking.com, kayak.com, agoda.com). Basically these two players control the market and include parity clauses (MFN-clauses) in their contracts with the hotels, as well as massive fees (up to 25% of the price of the purchased accommodation) without a corresponding counter performance or transparency. Parity clauses inhibits competition in this field and are in fact illegal in other contexts, so it is very unclear why it should be accepted here. We are aware that procedures have been ongoing in a number of member states on this very issue, but the jurisprudence seems to suggest a different interpretation in the various countries.
We are also aware that a compromise has been reached whereby these two players have agreed not to use the parity clauses in specific areas (i.e. between booking portals and in relation to closed user groups and loyalty programs), but this is not sufficient because the deal does not include the real problem for providers of accommodation, namely the price-parity clauses that denies the hotel the right to sell their accommodation cheaper, than what is advertised on the booking platform.
We admit to being somewhat surprised that the European Commission have not already addressed these parity clauses fully when the cases came up in Germany, Italy, France and Sweden. Whilst it may be true that the separate agreement between the individual hotel and the booking platforms does not extend across a border, it is clear that there is a number of vertical agreements which in effect are in place across the EU. If the Commission will not address these practices there is a serious risk, that there will be radically different sanctions for identical infringements of competition law inside the EU.
The Danish Chamber of Commerce strongly urges the Commission to put an end to the price parity clauses, that hurts both suppliers and consumers. A common European approach on such infringements is vital, not only for the hotel sector that is currently being hit, but also for suppliers and consumers in many other areas where the same practices could easily be picked up.
- CONSTRAINTS ON THE ABILITY OF CONSUMERS AND TRADERS TO MOVE FROM ONE PLATFORM TO ANOTHER
The question of portability of data is somewhat complex. Whilst it is generally fair that a consumer or trader can take their own data with them to another provider, it is in practice not always clear where the delineation lies between "own data" and protected content that is the intellectual property of the provider. The UK MiData project serves as an interesting case on this topic.
- ACCESS TO DATA
Our members have had some experiences with being denied access to their own data, but we fail to see that a rating system from an independent agency would solve the problem. We consider the challenge to be the dominant position that allows the platforms to engage in these types of practices.
Tackling illegal content online and the liability of online intermediaries
Illegal content should be tackled and we believe that articles 12-15 of the E-commerce Directive are sufficient to address these challenges if enforced consistently and properly.
The liability of online intermediaries does however extend beyond the issues mentioned in this questionnaire. There are many obligations that apply to different types of platforms. Sellers and intermediaries may have contractual obligations towards the consumer when conducting commercial activities, whereas mere hosts do not. The legal requirements of the different types of platform are poorly delineated, and it would be helpful to both consumers and businesses if the Commission clearly defined the different types of platforms and their obligations, not only in the field on illegal content but also for business to consumer relations. In relation to the collaborative economy this question will also be off vital importance.
Another important issue in relation to this, is that platforms should adhere to the information obligations applicable to consumer sales – for example for consumer rights and product safety. If a purchase is completed entirely through a platform, the entity that sells through the platform should not be liable for giving this information, as the entity has no opportunity to do so. Under all circumstances it should be clear to all parties involved who is responsible for what – and this obviously includes any information obligations.
We, as a matter of course also assumes that any rules or regulations would apply to platforms established in third countries.
Data and cloud in digital ecosystems
- ON DATA LOCATION RESTRICTIONS
The borderless nature of the internet and the digital economy calls for a true Digital Single Market. Our members benefit from cloud based services. Security and privacy is crucial – for our member as well as their customers - and The Danish Chamber of Commerce expect these crucial issues taken care of with the new GDPR.
- ON ACCESS TO OPEN DATA / ON DATA ACCESS AND TRANSFER / ON DATA MARKETS
The Danish Chamber of Commerce hold high expectations to the effects of the PSI directive. A liberal, open and uniform practice for reuse of data from the public sector is an important task for a modern public sector. Danish companies already benefit from previous initiatives to open data for public and commercial purposes. After removing legal and economic barriers next step is to make data more available in technical and practical terms.
- ON LIABILITY IN RELATION TO THE FREE FLOW OF DATA AND THE INTERNET OF THINGS
No doubt IoT holds great potentials for business and society as a whole. As for liability and regulation, IoT as such is not new. IoT should be covered by the General Data Protection Regulation; not new and specific regulation.
- ON OPEN SERVICE PLATFORMS
It is not clear to The Danish Chamber of Commerce what is here referred to as an “Open Service Platform”. It covers a huge variety of concept, business models, application and competing definitions.
- EUROPEAN CLOUD INITIATIVE
The commercial marked for software as a service is a business model is a huge benefit to business customers. Standard it becomes a commodity; a service rather than a product. Security and privacy is crucial – for our member as well as their customers - and The Danish Chamber of Commerce expect these crucial issues taken care of with the new GDPR.
The collaborative economy
The collaborative economy is a potentially disruptive business model, that has great potential to develop further in Europe.
As often happens with new business models the current legislation is challenged by the unforeseen. The goal must be to integrate these new business models in the existing economy so that a level playing field can be provided, whilst at the same time retaining the possibility for such business models to emerge and exist.
There is a real need for regulatory clarification in terms of the definitions of private persons supplying services versus businesses doing the same, consumer- and data protection rules, employment rights and working conditions, authorization and licenses, insurance as well as effective enforcement of taxation and a long list of sector specific regulations relevant to the collaborative economy.
A central issue is the obligations of the platforms that often play an integral role in the provision of the services. Legal clarity in this field would be a prerequisite to any further development of these types of business models.
Kind Regards
Lasse Hamilton Heidemann
EU-Consultant
Danish Chamber of Commerce
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