In the EU, the basic legal framework for information society services is provided by the e-Commerce Directive. The objectives of the Directive are to remove cross-border obstacles for information society services and provide an internal market conducive to innovation. The e-Commerce Directive lays down the intermediary service provider liability regime. It also specifies that Member States cannot impose a general obligation on intermediary service providers to monitor content uploaded on their platform. The rationale of the Directive is that liability should not be assumed if the intermediary service does not have actual knowledge of illegal activity or content. Once service providers obtain knowledge about illegal activity or content (for example, through an authority or user report), they are obliged to remove or block access, otherwise they would become liable. 

In December 2020, the European Commission released a proposal for a new Digital Services Act (DSA) that aims to reinforce the Single Market by implementing new rules for online intermediary services, empowering users and improving the fight against illegal content online.

The initial proposal is a horizontal piece of legislation which applies to all kinds of online intermediary services, divided into four categories, where marketplaces (but also social media, for instance) are categorized as online platforms.

Challenged to address a large variety of business models, content and possible infringements, the Commission's proposal suggests horizontal obligations to reinforce the duties of online service providers, for instance regarding reports of illegal content (notice & action), transparency reports, and customer due diligence requirements.

eBay Position

As one of the first online marketplaces to be launched 25 years ago, eBay has in-depth long-time experience connecting buyers and sellers online. eBay empowers SMEs to crease their own digital storefront and to control their strategy, customer relationship, product marketing and delivery. In fact, as a pure third-party marketplace, eBay never sells its own products and never competes with its sellers. 

By enabling European SMEs to build their businesses using its innovation and digital technologies, eBay is committed to providing a safe, secure and convenient place for e-commerce and the participation of SMEs in global trade. 

The e-Commerce Directive can be credited for much of this success: it has proven highly effective in removing cross-border obstacles for the provision of digital services and achieving an internal market conducive to innovation. As the EU looks into updating the framework created by the Directive with the Digital Services Act, it should bear in mind who really stands behind these online services. Millions of European SMEs use marketplaces every day to sell around the world, at a fraction of the investment they would otherwise have to make to reach these customers offline or via their own website. 

Against this backdrop, eBay's recommendations a aimed at making the Digital Services Act a set of rules tailored to empower European citizens and businesses to benefit from the potential offered by the Digital Single Market:

• The horizontal nature of the DSA must be safeguarded. Consequently, the core principles of the e-Commerce Directive, notably the intermediary liability exemption and the prohibition on general monitoring, must be upheld for all digital services regulated under the DSA. In particular where it concerns platforms providing pure third-party marketplace services, like eBay. These platforms have no access to or control over the goods sold by their third-party sellers. 
• In marketplace context and within the meaning of the Digital Services Act, illegal content should be understood as information present in the product listing. Thus, it should not apply to characteristics of the product that is offered for sale online per se, as these characteristics are not visible or otherwise accessible to third-party online marketplaces, like eBay. In fact, the question whether a product is illegal does not depend on the service or channel through which it is sold. Therefore, this should not be addressed in the DSA, but in separate legislation, such as the recently proposed General Product Safety Regulation. 
• An efficient notice & action system should be based on adequate prioritization and safeguard against abuse. In other words, the power to both deal efficiently with a high volume of notices and discard unfounded ones is the prerequisite for effective content moderation on our platform. This can be achieved through: 
  • A balanced protection against unwarranted liability. Platforms should be protected from lability when they process an incorrect notice received under Article 14, but also when content is taken down or reinstated after a complaint under Article 17. Furthermore, notices under the DSA's Article 14 should only give rise to actual knowledge when the illegality of the hosted information is obvious. Service providers should be allowed to process notices according to flexible risk- and context- based assessments. 
  • A reliable "trusted flaggers" status. The status should strictly be tied to a verified area of expertise, rather than to a person or organization as a whole, thus enabling swift identification of notices to be trusted and prioritized. This would encourage online marketplaces to pursue collaboration with rights owners, as the most relevant experts for intellectual property rights infringements. 
  • Strong sanctions against abuse of the system. In addition to liability protection, platforms should be able to seek compensation from identified authors of notice abuse. This would help deter mass abuse which would seriously undermine the long-term efficiency of content moderation. 

Useful links

The policymaking and adoption process that just started around the proposal is expected to last for one to two years and involves two other European institutions besides the Commission, namely the European Parliament and the Council of the EU. As the debates expand and more stakeholders make their voice heard in both Council and Parliament, eBay contributes through a series of papers nicknamed the "eBay DSA Series". While covering the many important issues found in the DSA, the Series aims to retain an accessible reading format (no more than 3 pages each). You can read the issues of the eBay DSA Series here:

• eBay DSA Series #1 "Ensuring a balanced liability framework"

• eBay DSA Series #2 "Towards an efficient notice & action system"