www.tourismlaw.pt Digital Markets Act and Digital Services Act: their impact on the tourism sector Silvia Feliu Spain, University of the Balearic Islands International Journal of Tourism, Travel and Hospitality Law PRE-PRINT
Digital Markets Act and Digital Services Act: their impact on the tourism sector Silvia Feliu 1 1. Legal context of the Information Society Services; 2. Digital Services Act; 2.1 Context; 2.2. Liability regime. 3. Digital Markets Act; 3.1 Context; 3.2. Liability regime; 4. Some conclusions 1- LEGAL CONTEXT OF THE INFORMATION SOCIETY SERVICES It was an emergency! Yes, Information society services were still regulated by Directive 2000/31/EC of the European Parliament and of the Council (Directive on electronic commerce), 2 approved twenty three years ago. Definitely the social demand needed legislative changes to adapt existing legal framework applicable to Information society services, such as online social networks and online platforms. In the Communication ‘Shaping Europe’s Digital Future’, the Commission committed to update the horizontal rules that define the 3 responsibilities and obligations of providers of digital services, and online platforms in particular. The European Commission proposed in December 2020 two legislative initiatives to upgrade rules governing digital services in the European Union: the Digital Services Act (DSA) and the Digital Markets Act (DMA). The Commission made the proposals in December 2020 and on 25 March 2022 a political agreement was reached on the Digital Markets Act, and on 23 April 2022 on the Digital Services Act. Profesora Titular at the University of the Balearic Islands, Spain; silvia.feliu@uib.es. 1 * This publication is part of the projects: «Hacia una transición digital centrada en la persona en la Unión Europea»; TED2021-129307A-I00, funded by MCIN/AEI/10.13039/501100011033 and European Union “NextGenerationEU”/PRTR; and project «Retos para la transición digital en turismo: análisis de la inteligencia turística y propuestas normativas» TED2021-129763B-I00. Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain 2 legal aspects of information society services, in particular electronic commerce, in the Internal Market ('Directive on electronic commerce') Official Journal of the European Union L 178, 17.07.2000. https://ec.europa.eu/info/sites/info/files/communication-shaping-europes-digital-future- 3 feb2020_en_4.pdf
The Digital Markets Act was approved as Regulation (EU) 2022/1925 of the European Parliament and of the Council of 14 September 2022 on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828 (Digital Markets Act) , on 4 October 12, 2022. While the Digital Services Act was approved on October 19, 2022, as Regulation (EU) 2022/2065 of the European Parliament and of the Council of 19 October 2022 on a Single Market for Digital Services and amending Directive 2000/31/EC (Digital Services Act) . 5 Together they form a single set of new rules that will be applicable across the whole EU to create a safer and more open digital space. Digital services include a large category of online services, from simple websites to internet infrastructure services and online platforms. As we can imagine, it is a legislative reform that especially affects the field of tourist services. For example, online marketplaces, social networks, content-sharing platforms, app stores, and online travel and accommodation platforms, such as Airbnb, Vrbo, Booking, Expedia or Tripadvisor. The new legislation has two main goals: 1. to create a safer digital space in which the fundamental rights of all users of digital services are protected; 2. to establish a level playing field to foster innovation, growth, and competitiveness, both in the European Single Market and globally. Digital Markets Act and Digital Services Act form a single set of new rules, but it should be noted that they coexist with consistency with existing policy provisions in the policy area. Specifically, the new legal framework regulating digital services is underpinned, first and foremost, by the Directive on electronic commerce. Furhermore regulations complements existing sector-specific legislation and does not affect the application of existing EU laws regulating certain aspects of the provision of information society services, which apply as lex specialis. 2. - DIGITAL SERVICE ACT 1. Context There is no doubt that since the adoption of the Directive on electronic commerce new and innovative information society (digital) services have emerged, changing the daily lives of Union citizens and shaping and transforming how they communicate, connect, consume and do business. The tourism and hospitality sector is one of those that has been hugely transformed, especially carriage of passengers and accommodation services. In this context it was necessary to update the horizontal rules that define the responsibilities and obligations of providers of digital services, and online platforms in particular to ensure the best conditions for the provision of innovative digital services in the internal market, to contribute to online safety and the protection of fundamental rights, and to set a robust and durable governance structure for the effective supervision of providers of intermediary services. Official Journal of the European Union L 265, 12.10.2022. 4 Official Journal of the European Union L 277, 27.10.2022. 5
The rules that define the responsibilities and obligations of providers of digital services bind not only providers of digital services established in the European Union but also those providers established outside of the Union offering services in the Union. For those established outside of the European Union the Regulation requires the appointment of a legal representative in the European Union to ensure effective oversight and, where necessary, enforcement. It is said that Digital Services Act will ensure providers of digital services a legal certainty, harmonisation of rules that will help them to start-up and scale-up in Europe. But the reform of the EU e-commerce legal framework maintains the core principles of its liability regime, the prohibition of general monitoring and the internal market clause. 1.2. Liability regime Digital Services Act builds on the provisions laid down in the Directive on electronic commerce notably on the internal market principle set out in Article 3. Digital Services Act deletes Articles 12-15 in the Directive on electronic commerce and reproduces them in the Regulation, maintaining the liability exemptions of such providers, as interpreted by the Court of Justice of the European Union. As we know, the CJEU Judgment of 19 December 2019 concerning Airbnb Ireland has been decisive in 6 qualifying the legal nature of the digital platforms that operate in the vacation rental sector. The Court has classified them as mere providers of information society services, included in the scope of the Directive on electronic commerce, without regard to the underlying provision of services. Under article 1(1)(b) of Directive 2015/1535, the concept of an “information society service” covers “any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services”. The service in question would be an intermediation service which, by means of an electronic platform, is intended to connect, for remuneration, potential guests with professional or non-professional hosts offering short-term accommodation, while also providing a certain number of services ancillary to that intermediation service . 7 With this, the CJEU understands that the Airbnb platform only provides an intermediary service and not the provision of the underlying service. The electronic platform must be classified as an “hosting information society service” under the Directive on electronic commerce and under de Digital Service Act. As such, collaborative platforms C 390/18, Airbnb Ireland UC c. Hôtelière Turenne SAS, Association pour un hébergement et un tourisme 6 professionnels (AHTOP), Valhotel See some consequences of this qualification: “Tourist Vacation Rental and Digital Platforms in 7 Spain” in Tourism Law in Europe. Tourism Law in Europe (eshte.pt). 2022. S. Feliu Álvarez de Sotomayor, “Perspectiva internacional: requisitos de acceso al mercado de las plataformas en el sector del alquiler vacacional” in Plataformas digitales en los alquileres vacacionales, Feliu Álvarez de Sotomayor, S., (Dir.), editorial Reus, Madrid, 2020, pp. 169-190; A. P. Ribeiro Café, “La naturaleza jurídica de las plataformas en línea de alojamiento. Análisis de la Sentencia del TJUE AirbnbIreland” in Plataformas digitales en los alquileres vacacionales, Feliu Álvarez de Sotomayor, S., (Dir.), editorial Reus, Madrid, 2020, pp. 73-90; N. Tur Faúndez, “Los sujetos en el turismo colaborativo: plataformas digitales y proveedor del servicio” in Plataformas digitales en los alquileres vacacionales, Feliu Álvarez de Sotomayor, S., (Dir.), editorial Reus, Madrid, 2020, pp. 47-72.
could be subject only to Directive on electronic commerce and Digital Service Act (among other regulations, obviously), but not to the sectoral regulations of the underlying service provided. Therefore, platforms such as Airbnb are mere service providers, the provisions of the Directive on electronic commerce and Digital Service Act apply to them. Note that certain providers of intermediary services intermediate in relation to services that may or may not be provided by electronic means, such as remote information technology services, transport or accommodation services. Digital Service Act should apply only to intermediary services and not affect requirements set out in Union or national law relating to products or services intermediated through intermediary services, including in situations where the intermediary service constitutes an integral part of another service which is not an intermediary service as recognised in the case-law of the Court of Justice of the European Union . 8 Digital Service Act deletes Articles 12-15 in the e-Commerce Directive and reproduces them in the Regulation. Article 14(1) of Directive 2000/31 determinated the exemption from liability for the content it stores, under certain conditions, namely a) the provider does not know of illegal activities or information and b) upon knowing, acts to remove or to disable access to the information. This was not apply when the service recipient was acting under the provider’s authority or control [art. 14(2)], and, under article 14(3), “This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States’ legal systems, of requiring the service provider to terminate or prevent an infringement, nor does it affect the possibility for Member States of establishing procedures governing the removal or disabling of access to information.”. Digital Services Act builds on the provisions laid down in the e-Commerce Directive and reproduces article 14 of Directive 2000/31 in article 6: Article 6 Hosting 1. Where an information society service is provided that consists of the storage of information provided by a recipient of the service, the service provider shall not be liable for the information stored at the request of a recipient of the service, on condition that the provider: 2. Paragraph 1 shall not apply where the recipient of the service is acting under the authority or the control of the provider. 3. Paragraph 1 shall not apply with respect to the liability under consumer protection law of online platforms that allow consumers to conclude distance contracts with traders, where such an online platform presents the specific item of information or otherwise enables the specific transaction at issue in a way that would lead an average consumer to believe that the information, or the product or service that is (a) does not have actual knowledge of illegal activity or illegal content and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or illegal content is apparent; or (b) upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the illegal content. See, Whereas 6 Digital Service Act. 8
the object of the transaction, is provided either by the online platform itself or by a recipient of the service who is acting under its authority or control. 4. This Article shall not affect the possibility for a judicial or administrative authority, in accordance with a Member State's legal system, to require the service provider to terminate or prevent an infringement. As the CJEU judgment of the Airbnb Ireland case determines that only a service provider hosts data automatically and passively, the platform is, in principle, exempt from liability for the content it stores (article 6 Digital Service Act). Note that the Digital Services Act significantly improves the mechanisms for removing illegal content and the effective protection of the users’ fundamental rights online. It also creates a stronger public oversight of online platforms, in particular for platforms that reach more than 10% of the EU’s population. In order to benefit from the exemption from liability for hosting services, the provider should, upon obtaining actual knowledge or awareness of illegal activities or illegal content, act expeditiously to remove or to disable access to that content. The exemption of liability should not apply where the recipient of the service is acting under the authority or the control of the provider of a hosting service . 9 The novelty in Digital Service Act is consumer protection (article 6, paragraph 3). Certain providers of hosting services, namely online platforms that allow consumers to conclude distance contracts with traders, should not be able to benefit from the exemption from liability for hosting service providers established in this Regulation, in so far as those online platforms present the relevant information relating to the transactions at issue in such a way as to lead consumers to believe that that information was provided by those online platforms themselves or by traders acting under their authority or control, and that those online platforms thus have knowledge of or control over the information, even if that may in reality not be the case . 10 The novelty in Digital Service Act is also the due diligence obligations for a transparent and safe online environment for providers of intermediary services (Chapter III) and also the implementation, cooperation, penalties and enforcement system (Chapter IV). Digital Service Act sets out basic obligations applicable to all providers of intermediary services, as well as additional obligations for providers of hosting services and, more specifically, providers of online platforms and of very large online platforms and of very large online search engines. See, Whereas 22 and 23 Digital Service Act. 9 See, Whereas 24 Digital Service Act. 10
3. DIGITAL MARKETS ACT 3.1 Context 11 The Digital Markets Act introduces common rules across the single market that will foster innovation, growth and competitiveness, and facilitate the scaling up of smaller platforms, small and medium-sized enterprises and start-ups who will have a single, clear framework at EU level. The Digital Markets Act introduces rules for platforms that act as “gatekeepers” in the digital sector and aims at preventing gatekeepers from imposing unfair conditions on businesses and end users and at ensuring the openness of important digital services. “Gatekeepers” are platforms that have a significant impact on the internal market, serve as an important gateway for business users to reach their end users, and which enjoy an entrenched and durable position. This can grant them the power to act as private rulemakers and to function as bottlenecks between businesses and end users. The Digital Markets Act will be applicable only to companies that will be identified as “gatekeepers” according to objective criteria set out in the proposal, but they have the opportunity to rebut the presumption. These are companies that play a particularly important role in the internal market because of their size and their importance as gateways for business users to reach their customers. In this context, ten core platform services will be subject to the Digital Markets Act: online intermediation services, such as accommodation services; online search engines such as carriage of passengers services; online social networking services; video-sharing platform services; number-independent interpersonal communication services; operating systems; cloud computing services; advertising services; web browsers; and virtual assistants. As a precondition, these companies need to be identified as gatekeeper for at least one of the so-called “core platform services” enumerated in the Digital Markets Act (such as online search engines, social networking services, app stores, certain messaging services, virtual assistants, web browsers, operating systems and online intermediation services). The same company can be identified as gatekeeper for several core platform services. Specifically, there are three main cumulative criteria that bring a company under the scope of the Digital Markets Act: 1. A size that impacts the internal market: this is presumed to be the case if the company achieves an annual turnover in the European Economic Area (EEA) equal to or above €7.5 billion in in each of the last three financial years, or where its average market capitalisation or equivalent fair market value amounted to at least €75 billion in the last financial year, and it provides a core platform service in at least three Member States; 2. The control of an important gateway for business users towards final consumers: this is presumed to be the case if the company operates a core platform service with more than 45 million monthly active end users established or located in the EU and more than 10,000 yearly active business users established in the EU in the last financial year; 3. An entrenched and durable position: this is presumed to be the case if the company met the other two criteria in each of the last three financial years. See, www.europa.eu 11
3.2. Liability regime Under the scope of the Digital Markets Act, companies identified as gatekeepers will be subject to a number of dos and don'ts. Gatekeepers will carry an extra responsibility to conduct themselves in a way that ensures an open online environment that is fair for businesses and consumers. They will therefore have to proactively implement certain behaviours that make the markets more open and contestable and at the same time refrain from engaging in unfair behaviours. Chapter III regulates the obligations for Gatekeepers in order to avoid practices of them that limit contestability or are unfair. Some examples of the “dos” imposed on gatekeepers include the following: Allow business users to promote their offers and conclude contracts with their customers outside the gatekeeper's platform or provide business users with access to the data generated by their activities on the gatekeeper's platform. Some example of the “don'ts” imposed on the gatekeepers include the following to ban on using the data of business users when gatekeepers compete with them on their own platform or Ban on ranking the gatekeeper's own products or services in a more favourable manner compared to those of third parties. 4. SOME CONCLUSIONS • Both new regulations, Digital Services Act and Digital Markets Act, affects directly on tourism sector: online travel and accommodation platforms, online marketplaces, social networks, content-sharing platforms…all of them are intermediary services. Information society services have become an important part for tourism. New and innovative business models and services have allowed business users and tourist consumers to impart and access information and engage in transactions in novel ways. • Digital Services Act and Digital Markets Act are regulations. It is good the Binding force of a Regulation, instead of a Directive, to ensure an effective harmonisation across the Union and avoid legal fragmentation. Regulation fully harmonises the rules applicable to intermediary services in the internal market with the objective of ensuring a safe. The Commission decided to put forward a proposal for a Regulation to ensure a consistent level of protection throughout the Union and to prevent divergences hampering the free provision of the relevant services within the internal market, as well as guarantee the uniform protection of rights and uniform obligations for business and consumers across the internal market. • Therefore new regulations are good because they create a safer digital space in which the fundamental rights of all users of digital services are protected. The approximation of national regulatory measures at Union level concerning the requirements for providers of intermediary services was necessary to avoid and put an end to fragmentation of the internal market and to ensure legal certainty. But, in my opinion both regulation produce a dichotomy. In one hand Digital Markets Act complements the enforcement of competition law, but in the other hand, Digital Services Act maintains the liability rules for providers of
intermediary services set out in the e-Commerce Directive. Under Digital Services Act and acommodation platforms, such as Airbnb, may continue to offer properties that do not have rental vacation license, for example, because platform doesn’t have obligation to control the legality of the content they publish. In my opinion, this threatens the competition market, for example with hotels. Let’s wait if the Proposal for a Regulation of the European Parliament and of the Council on data collection and sharing relating to short-term accommodation rental services and amending Regulation (EU) 2018/1724 will solve this situation. The proposal enhance transparency in the 12 field of short-term accommodation rentals and help public authorities ensure their balanced development as part of a sustainable tourism sector. The new rules will help to improve transparency on the identification and activity of short-term accommodation hosts, and on the rules they have to comply with, and will facilitate the registration of hosts. They will also tackle the current fragmentation in how online platforms share data and, ultimately, help prevent illegal listings. • It is well knowns the pressure maid by acommodatio platform’s lobby during the preparatory works of the new regulations. This has meant giving a lot of power to platforms to the detriment of hoteliers. Large platforms such as Airbnb will have a very powerful status by becoming gatekeepers, for this reason it is said that large platforms have achieved "tailor-made" legislation. • Lets wait to see if new regulation will suppose a real legel of competitiveness in the field of tourism sector, especially between hotels and acommodation plarforms. BIBLIOGRAPHY S. Feliu Álvarez de Sotomayor, “Perspectiva internacional: requisitos de acceso al mercado de las plataformas en el sector del alquiler vacacional” in Plataformas digitales en los alquileres vacacionales, Feliu Álvarez de Sotomayor, S., (Dir.), editorial Reus, Madrid, 2020, pp. 169-190. S. Feliu Álvarez de Sotomayor, “Tourist Vacation Rental and Digital Platforms in Spain” in Tourism Law in Europe. Tourism Law in Europe (eshte.pt). 2022. A. P. Ribeiro Café, “La naturaleza jurídica de las plataformas en línea de alojamiento. Análisis de la Sentencia del TJUE Airbnb-Ireland” in Plataformas digitales en los alquileres vacacionales, Feliu Álvarez de Sotomayor, S., (Dir.), editorial Reus, Madrid, 2020, pp. 73-90. N. Tur Faúndez, “Los sujetos en el turismo colaborativo: plataformas digitales y proveedor del servicio” in Plataformas digitales en los alquileres vacacionales, Feliu Álvarez de Sotomayor, S., (Dir.), editorial Reus, Madrid, 2020, pp. 47-72. COM(2022) 571 final; 7.11.2022 12
Contact Estoril Higher Institute for Tourism and Hotel Studies carlos.torres@eshte.pt www.tourismlaw.pt IJTTHL Celebrating five years of the first publication Vincenzo Franceschelli, On Tourism Law | Quest for general principles, https://fles.tourismlaw.pt/On-Tourism-Law-Quest-for-generalprinciples/ Alejandro Corral Sastre, A new Administrative Law for a new Tourism: now or never, https://fles.tourismlaw.pt/A-new-AdministrativeLaw-for-a-new-Tourism-by-Alejandro-Corral-Sastre-/ Jonas Thyberg, The Package Travel Act and the Covid19 pandemic, https://fles.tourismlaw.pt/The-Package-Travel-Act-and-the-Covid19pandemic-by-Jonas-Thyberg/ Caterina del Federico, The use of artifcial intelligence in the travel and hospitality industry. Civil liability profles, https://fles.tourismlaw.pt/The-use-of-artifcial-intelligence-in-the-travel-and-hospitalityindustry.--Civil-liability-profles "We are celebrating the 500 anniversary of the discovery of the Magellan strait with two online publications. On October 21, the launch of Derecho del Turismo en Las Américas brought together colleagues from all Latin American countries. On the same day, the Collective Commentary about the New Package Travel Directive, with colleagues from the then 28 Member States. More recently, Competition Law in Tourism and Tourism Law in Europe are publications demonstrating this group's dynamism. The pandemic has not broken the bonds that have united and unite us. Here we are again here in Lisbon, more numerous and more motivated than ever, to consecrate what will be the voice of our group: The new international journal of Tourism Law, The International Journal of Tourism, Travel and Hospitality Law.” • Vincenzo Franceschelli, The Lisbon Group and International Tourism Law Five years after the frst international publication (The New Package Travel Directive, October 2017) at the ESHTE | INATEL International Conference in October 2022, bringing together 50 speakers from 27 countries, a new project was announced: The International Journal of Tourism, Travel and Hospitality Law (IJTTHL). IJTTHL brings together several universities and is published both in print and online. The central part will be in English but will have an IberoAmerican chapter, and the texts are immediately available through Pre-Print. Monika Jurkova, Liability of online platforms in the tourism sector, https:// fles.tourismlaw.pt/Liability-of-online-platforms-in-tourism-sector-Monika-Jurkova/ Francesco Torchia, Tourism enterprise and cultural heritage protection, as a legal instrument for valorization of the territory and of the person, https:// fles.tourismlaw.pt/Tourism-Enterprise-and-Cultural-Heritage-protection,-as-a-legal-for-valorization-of-the-Territory-and-ofthe-Person-by-Francesco-Torchia/ Valérie Augros, Holiday lettings in France: tips and tricks, https://fles.tourismlaw.pt/ Holidays-lettings-in-France---Tips-and-tricks-by-V.-Augros/ Sarah Prager, Competition law: online travel agents and airlines, https:// fles.tourismlaw.pt/Sarah-Prager,--Competition-Law---OTAs-and-airlines/ Andrej Micovic, Legal Tech and Online Dispute Resolution, https://fles.tourismlaw.pt/ Microsoft-Word---A.-Micovic---Legal-Tech-and-ODR-in-Tourism./ Pilar Juana Garcia Saura, The inspection of tourist accommodation by Public Administrations: problems with the use of the robot inspector (web spider) and the responsibility of collaborative platforms, https://fles.tourismlaw.pt/Collaborativeplatforms-in-accommodation-by-Pilar-Saura/ Michael Wukoschitz, A Wicked Deed’s Curse – Will X v Kuoni change the Organiser’s Liability?, https://fles.tourismlaw.pt/Will-X-v-Kuoni-change-the-organisers-liability,---M.-Wukoschitz/ Bertold Bär-Bouyssiere, Sustainability and Article 101(1) TFEU, Exploring (almost) virgin territory, https://fles.tourismlaw.pt/Sustainability-considerations-and-Article-101-TFEU/ Tatjana Josipovic, Modernisation of information requirements for consumers on online tourism services market, https://fles.tourismlaw.pt/Modernisation-of--informationrequirements-for-consumers-on-online-tourism-services-market-by-Tatjana-Josipovic/ Matija Damjan, The new online platform rules and the accommodation booking services, https://fles.tourismlaw.pt/The-new-online-platform-rules-and-the-accommodation-bookingservices-by-Matija-Damjan/ Ilie Dumitru, EU legislation and contractual relationship between the travel package organizer and the air carrier in case of charter fights. Liability for cancelled and delayed charter fights, https://fles.tourismlaw.pt/EU-legislation-and-contractualrelationship-between-the-travel-package-organizer-and-the-air-carrier-in-case-of-charter-fights.-Liability-for-cancelled-anddelayed-charter-fights-by-Ilie-Dumitru-IJTTHL-PRE-PRINT/ João Almeida Vidal, Arbitration and tourism: a feld to explore, https:// fles.tourismlaw.pt/Arbitration-and-tourism--a-feld-to-explore-by-Joao-Vidal/
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