Enforcing the DSA: Opinion piece with analysis on Germany's draft law on the DSC
SNV in the Media
Germany's Federal Ministry for Digital and Transport has presented its plans for implementing the EU's Digital Services Act: The national "Digital Services Coordinator", an important body for platform oversight, is to be based at the Federal Network Agency. Beyond that, however, the draft law leaves many questions unanswered. SNV project director Julian Jaursch explains what a strong and consumer-friendly platform regulator could look like. The German language opinion piece was published in "Tagesspiegel Background KI & Digitalisierung" and you can find an English translation below.
Enforcing the Digital Services Act (DSA) will be a huge effort. The new EU regulatory framework for online platforms is extensive, touches on many previously barely regulated areas, revolves around some of the world’s most financially powerful corporations, and provides for new supervisory responsibilities for the EU and its member states. Part of this platform oversight includes requiring each member country to designate an authority as a Digital Services Coordinator (DSC). The DSC will serve as the national hub for enforcement of the DSA. The German Federal Ministry for Digital and Transport has just unveiled a draft German Digital Services Act, outlining what oversight should look like and who should serve as the country’s DSC. The German DSC is to be based at the Federal Network Agency (called “Koordinierungsstelle für digitale Dienste”). The draft law also deals with how this body is to operate.
The draft law gives hope that Germany can at least play a role in this huge effort of DSA enforcement – if the text is not watered down but improved on important issues. The DSC is tasked with coordination but also supervision and this dual role must be reflected in the text of the law and the agency’s resources. Many of the draft’s proposals go in the right direction. However, it lacks a truly innovative approach to platform oversight and the digital minister misses the opportunity for a comprehensive reform. Therefore, at the very least, it must now be ensured that the DSC can enforce the DSA with vigor: by having clear responsibilities as well as structured involvement of civil society and science.
Pooling competencies at the DSC
There was a long debate about which authorities should be named as “competent authorities” for parts of the DSA. In addition to the Federal Network Agency with its DSC, the draft law now designates two other federal regulators (for data protection and youth media protection, respectively) as competent authorities, and it also involves the state-level media authorities via a “qualified cooperation”.
This setup, bringing the threads of German DSA enforcement together at the DSC, is desirable. For consumers, but also for companies, it would be useful to have a central point of contact for the DSA. Legislators should therefore stick to their decision to make other authorities responsible for only a few, narrowly defined DSA issues. Otherwise, too much fragmentation diminishes the supervisory tasks of the DSC.
Reducing the DSC to its coordinating role is ill-advised. It also has other important tasks. Among other things, it must punish DSA infringements, for example, in the case of poorly explained recommender systems on online marketplaces, it must record complaints from consumers and it must vet researchers who wish to request data from platforms. This makes the DSC fundamentally different from a secretariat or a forum such as Germany’s Data Protection Conference.
If the legislator decided to cut up responsibilities more, the DSC might become more of a secretariat with a high coordination effort but little clout: If the DSC were be busy most of the time sending possible cases of infringement back and forth and clarifying responsibilities between regulators, the other tasks could easily fall under the table. This would be a huge disadvantage, especially for users who would benefit from a single point of contact, and for researchers who need to cooperate with the DSC. In addition, it would be difficult for the DSC to gain its own experience in platform oversight and thus to contribute at the German and especially at the European level (towards the Commission and other DSCs).
Expanding promising formats for exchange with external experts
The DSA relies heavily on external experts from academia and civil society, as they have built up a lot of knowledge on platforms in recent years. For instance, for the first time, there is a requirement for platforms to share data with researchers in certain cases so they can explore potential risks associated with platforms. Civil society organizations can advise the Commission and DSCs.
It is therefore promising that the bill provides for an advisory council at the DSC. However, since an advisory council is only one of many formats for bringing civil society and academic expertise to the DSC, it would be better to embed this advisory council in an overarching structure of collaboration with external parties. In this way, the DSC would be encouraged to try out and establish other formats of exchange with diverse experts. In any case, it should be made clearer that the DSC must respond to the recommendations and questions of the advisory council – there are only very vague allusions to this in the draft.
The appointment of the advisory council members by the German parliament and the federal government also has its pitfalls. It makes sense for the parliament’s Digital Affairs Committee to assume a kind of control function and provide input to the advisory council. However, there is a risk that appointments will be tinged by (party) political considerations rather than being done based on expertise. A joint responsibility for the parliament and the DSC to appoint members could instead be an option. If this resulted in a technically strong advisory council with clear tasks, this would be helpful; otherwise, the advisory council would be pretend civil society participation, which would be of no benefit to its members, the DSC or consumers.
Another promising provision to be expanded in the draft law is the research budget for DSC. The DSA provides for various databases, transparency reports, audits, verifications and risk assessments to be analyzed in Brussels and the member states. Therefore, it makes sense for any DSC to establish well-equipped research and data units in the long term. The (still somewhat small) research budget should be seen as the cornerstone for such a research unit at the German DSC. The law does not necessarily have to spell this out in detail, but it should at least be made clear that the DSC can conduct its own research and data analyses as well as support external researchers.
Crucial to the DSC’s success: Skilled staff and adequate resources
The draft law is narrowly tailored to the DSA. The ministry apparently did not want to take the opportunity to reform German platform oversight more comprehensively. It would have been a fitting opportunity to do that, as many other digital policy projects related to platforms are being discussed in addition to the DSA, both at the German and EU level.
However, without a major reform, DSA enforcement can still succeed if the law establishes clear and extensive responsibilities for the DSC and structures for external exchange. This must be backed up in practice by sufficient specialist staff, strong leadership and adequate resources. While it is difficult to estimate the DSC’s actual workload, the approximately 60 additional positions envisaged in the draft seem to be a lower rather than an upper limit considering the DSC’s numerous and diverse tasks. Especially since several thousand companies in Germany will be subject to the DSA. Against this backdrop, the role of the German DSC should not be underestimated in the upcoming debates – particularly in the parliament. To support the huge effort that is DSA enforcement, strong platform oversight is vitally necessary.