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Spain Update: Digital Services Act and tourist rental challenge or opportunity for cities?
03/08/2021The European Union is currently debating the proposal for a new digital services act (DSA), presented in December by the Von der Leyen Commission. Meanwhile, several European cities are considering whether this future regulation will have a positive or negative impact on their ability to regulate and/or control tourism activity.
Before the outbreak of the pandemic, some European cities were in a situation of absolute tourist overcrowding, partly enhanced by the existence of intermediation platforms, but with limited capacities and means to deal with it. However, during the coronavirus crisis, tourism has fallen to almost forgotten and economically undesirable levels. For the post-pandemic, we are looking forward to an upturn in tourism activity, while still addressing the problems associated with the previous overcrowding.
Lina Khan has recently been confirmed as the new president of the Federal Trade Commission in the United States and Margrethe Vestager is already in her second term at the head of the European Union’s competition policies. Both have been described as the scourge of technology and, clearly, lead a new approach by regulators to market power in the digital world. On both sides of the Atlantic there seems to be consensus on the need to curtail the power of large digital corporations, but not on how it should be done. The new approach must think of other remedies, either by splitting up big tech or by regulating them.
In Europe, the big bet seems to lie in two legislative initiatives presented by the European Commission in December last year: the Digital Markets Act (DMA) and the Digital ServicesAct (DSA); the first focused on the market power of large platforms, stipulating behavioral obligations; and the second focused on minimal control over the provision of digital services. The proposals must now pass the cut of the European Parliament and the EU Council of Ministers. It is the DSA that can influence the regulatory and control capacities of tourism activity from the local perspective.
Following in the footings of its predecessor, the Electronic Commerce Directive, the DSA intends to maintain a series of axioms of the European approach to the digital environment: (i) the country of origin principle, which allows platforms, in general, to comply only with the regulations of the Member State in which they are established and not those of all those in which they operate; (ii) the absence of obligation to monitor the activity that takes place on the platform; and (iii) as a logical consequence of this, the exemption from liability for the activities or services of third parties provided through the platform.
These rules of the game have undoubtedly allowed the expansion, growth and accessibility of cross-border digital services in Europe, including tourism, for the benefit of all citizens. However, some of its shortcomings are also evident. The regime allows or generates a certain lack of regulatory control, since it makes it difficult to identify possible violators of an administrative regulation such as urban or tourist regulation, whose main guarantors are the regional or local authorities. Any administrative regime that lacks the mechanisms to ensure compliance also lacks credibility and is a breeding ground for potential and exponential infringements. To this is added, in addition, the impossibility, alleged by various European cities, of controlling in the digital environment the total volume of tourist activity, when this is essential to safeguard general interests such as the preservation of public space, neighborhood coexistence or the guarantee of a minimally balanced offer of housing and shops aimed at residents.
The DSA seems to be opening up certain avenues that could contribute to improving this necessary regulatory effectiveness. On the one hand, there is a clear commitment to the adoption of control mechanisms, traceability and reporting of illegal activities or services that can be provided online (e.g. notification and action mechanisms, warnings by so-called reliable alerters, transparency obligations, etc.). On the other hand, it is also intended to increase the responsibility of very large platforms (i.e. those with a monthly average of more than 45 million active users), requiring them, for example, to adopt risk identification and mitigation mechanisms or undergo audits, and to improve cross-border coordination and communication mechanisms between regulatory authorities. However, many of the proposed mechanisms lack binding and clear deadlines for compliance. Furthermore, beyond the cases of the larger platforms, cross-border coordination mechanisms still do not provide for tools of coercion when the digital intermediary is found to be non-compliance and the Member State of establishment refuses to take action.
To all this must be added a major challenge. The DSA is intended as a horizontal instrument to order the provision of services in the digital universe. This includes online trade in goods and services, but also social media or other online communication platforms. This makes it difficult to take firm measures. That is why, for example, there is no clear legal basis at European level for ordering the removal of illegal content, a point that several European cities had been demanding in connection with the control of tourist rentals. The attempt at regulation ends up faced with the dilemma that what could guarantee the security and legality of online commerce, can be counterproductive and restrict freedoms in the field of social networks. It is possible that, after all, the predicted homogeneity with horizontality is a coffee for everyone something indigestible.
By Yolanda Martínez and published at CIDOB., Marimón Abogados, Spain, a Transatlantic Law International Affiliated Firm.
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