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Happy Birthday: The E-Commerce Directive Turns 20

chocolate cake

Today, we celebrate the e-Commerce Directive’s twenty’s anniversary. 

Why is that worth commemorating you may ask? Over the past two decades, the European Union’s  e-Commerce Directive (ECD)  has been the foundation on which Europe’s digital economy has developed. It enables thriving digital businesses that operate across borders within the EU Single Market. The ECD equally empowers EU citizens as it created the right conditions for them to engage in commerce and express themselves online. It is a true European success story.

The benefits of the ECD lie in its principle-based and future-proof approach which allowed new digital services to flourish. While in 2000, some digital services were already present (e.g.: Yahoo, Allegro, Amazon, eBay, MSN, Myspace), many have since emerged like Skype, Firefox, BlaBlaCar, Twitter, Zalando, Airbnb, and Spotify. Today, the European Commission refers to “a large diversity of online platforms in Europe, with almost 10,000 high-growth SMEs”. That’s an increase from 7,000 platforms in 2018. Clearly, the digitisation of Europe’s economy and the emergence of new services has just started.

E-commerce is providing incredible prosperity to Europeans. The estimated welfare gains for EU citizens vary between €34 billion and €204.5 billion per year (0.3–1.7% of EU-27 GDP). This number will likely increase, as e-commerce and other services become the new normal. 

The ECD is not only about developing online retail, it also creates a framework for content moderation. Online intermediaries are not required to monitor all the content on their services, but as soon as they have ‘actual knowledge’ of illegal content, they become liable. 

Twenty years after its birth, some gaps in the ECD have emerged. Like parents’ expectations of a toddler compared to a young adult, the public’s expectations have also evolved. To make the most of digital opportunities and to clarify digital services’ responsibility and accountability the European Commission is working on a new legislative framework, the Digital Services Act (DSA). 

To be as effective as the ECD, the DSA should be a horizontal principle-based legislative initiative, which could be complemented by targeted measures (legislative and non-legislative) tackling specific concerns. 

In order to strengthen trust online, online intermediaries should be incentivised to act responsibly in tackling illegal content, products or conduct. Digital services should have the opportunity to take voluntary measures tackling problematic content, products or conduct without being penalised for their good faith efforts.

By integrating European rights, such as freedom of expression, in the legislative proposal, the EU could inspire other countries to also include these values in their future laws. 

European businesses and citizens have benefited from the e-Commerce Directive. For its twentieth anniversary, it is worth highlighting the success of the ECD which brought substantial growth to Europe. Moving forward, the spirit of the e-Commerce Directive should be extended in the forthcoming Digital Services Act. The new measures should bring clarity and harmonisation to the current framework, without challenging the ECD’s key principles. The European Commission last week published a public consultation, inviting all stakeholders to provide their input. The Commission will propose its new law at the end of the year.

European Union

DisCo is dedicated to examining technology and policy at a global scale.  Developments in the European Union play a considerable role in shaping both European and global technology markets.  EU regulations related to copyright, competition, privacy, innovation, and trade all affect the international development of technology and tech markets.