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Proposal for EU Digital Services Act published

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On 15 December 2020, the European Commission finally published the long-awaited proposal for a Digital Services Act, as well as the proposal for a regulation on digital markets (link to related article).

These new regulations:

  1. provide stronger protection for consumers and their fundamental rights online;
  2. establish high standards of transparency and a clear accountability framework for online platforms; and
  3. will foster innovation, growth and competitiveness in the single market.
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The regulation on digital services, according to the press release published, will introduce a series of new, harmonised EU-wide obligations for digital services, carefully graduated on the basis of the size and impact of those services, such as:

  • rules for removal of illegal goods, services or content online;
  • safeguards for users whose content has been wrongfully removed by platforms;
  • new obligations for platforms to take risk-based action to prevent abuse of their systems;
  • wide-ranging transparency measures, including measures relating to online advertising and to the algorithms used to recommend content to users;
  • new powers to scrutinise how platforms work, including facilitating researchers’ access to key platform data;
  • new rules on traceability of business users in online marketplaces, to help track down sellers of illegal goods or services;
  • an innovative cooperation process among public authorities to ensure effective enforcement across the single market.

Platforms that reach more than 10% of the EU’s population (45 million users) are considered systemic in nature and are subject not only to specific obligations to control their own risks, but also to a new oversight structure. This new accountability framework will be comprised of a board of national digital services coordinators, with special powers for the Commission in supervising very large platforms, including the power to sanction them directly.

The European Parliament and the Member States will now discuss these proposals from the Commission in the ordinary legislative procedure. Once these rules are adopted, they will be directly applicable across the EU. We will have to wait to see what amendments are made during the parliamentary procedure. In any case, this effort to regulate the digital world is certainly the right way forward.

 

Author: Juan José Caselles

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Forthcoming publication of the EU’s Digital Services Act

Inminente publicación de la "DIGITAL SERVICES ACT" de la UE

Online platforms (such as search engines, social media and e-commerce platforms) play an increasingly important role in our everyday lives. However, the current EU rules on digital services have to a large extent remained unaltered since the adoption of the Directive on electronic commerce in the year 2000, with great discrepancies in the way this Directive has been implemented across the EU.

Forthcoming publication of the EU’s Digital Services Act  

The Commission announced the revision of the internal market rules for digital services in its 2019 communication “Shaping Europe’s digital future”. Two public consultations were carried out, which had the following structure and ended on 8 September 2020:

  1. Assessment of the Directive on electronic commerce and clarification of the liability regime for digital services; and
  2. Possible introduction of an ex ante regulatory instrument for controlling the practices of large online platforms with significant network effects acting as gate-keepers.

The European added value assessment of the Digital Services Act was presented in October 2020, with the approval of the European Parliament resolution of 20 October 2020 on the Digital Services Act and fundamental rights issues posed.

The forthcoming next step will be the publication of the Digital Services Act, on 9 December 2020. Special attention must be paid to its final text, in particular with regard to the possible creation of national authorities competent to deal with illegal content. What does seem clear is that freedom of expression may not be asserted to sell counterfeit goods online.

 

Author: Juan José Caselles

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Amazon not liable for trademark infringement in storing goods offered and sold by third parties

Amazon no infringe marcas ajenas al almacenar productos ofrecidos y vendidos por terceros, según el TJUE

In December 2017, the Court of Justice of the European Union ruled that from the standpoint of the rules on competition, the bar imposed by the company Coty Germany on the members of its selective distribution network, prohibiting them from offering its luxury perfumes on the Amazon e-commerce platform, was lawful.

Amazon not liable for trademark infringement in storing goods offered and sold by third parties  

On 2 April of this year, the CJEU ruled on a new matter referred for a preliminary ruling (case C-567/18) concerning the sale of Coty’s perfumes through the aforementioned platform. However, on this occasion, Coty had brought its complaint directly against Amazon, and the decision went against its interests.

Coty Germany had brought an action against Amazon before the German courts, arguing that Amazon was infringing its trademark rights by storing Davidoff brand perfumes in which its trademark rights were not exhausted. The storage in question formed part of the service provided by Amazon to third-party sellers that were offering goods for sale in the “Amazon Marketplace” section of Amazon’s website in Germany.

The complaint was dismissed and, with Coty having lodged an appeal against the decision on a point of law, the German Federal Court of Justice (Bundesgerichtshof) referred a question to the CJEU for a preliminary ruling, seeking clarification as to whether said storage constituted use of the trademark within the meaning of Article 9 of the Regulation on the European Union Trade Mark. Specifically, it questioned whether it came under the example of use mentioned in Article 9(3)(b) of Regulation No. 2017/1001, which provides for prohibiting third parties from “offering the goods, putting them on the market, or stocking them for those purposes”.

In its ruling on the matter, the Court of Justice first of all pointed to its case law holding that on e-commerce platforms third-party trademarks are used by the sellers of the goods and not by the operators of those platforms (judgment of 12 July 2011, L’Oreal, C-324/09).

With respect to the storage service Amazon provides to third parties who sell goods on its platform, the Court stated that according to the information provided by the referring court, those goods were not offered or put on the market by Amazon itself but by the third-party sellers. It further stated that it follows from this circumstance that Amazon does not use the trademarks in its own commercial communication. Therefore, Article 9 of the Regulation is not applicable to Amazon.

Lastly, the CJEU stated that the above does not preclude the examination of the platform operator’s conduct with respect to the trademarks of third parties from the standpoint of other rules of law, specifically Article 14(1) of Directive 2000/31 on certain legal aspects of information society services or Article 11 of Directive 2004/48 on the enforcement of intellectual property rights. However, since this matter had not been raised by the referring court in this case, the Court of Justice refrained from conducting such an examination, notwithstanding Coty’s petition in this regard.

In summary, the Court of Justice rejects that Amazon may be held directly liable for trademark infringements committed by sellers that use its online sales platform, not even when it stores the infringing goods. Nevertheless, it does not rule out the possibility that the owners of infringed trademarks could request measures against Amazon through application of the rules in the aforementioned directives. In this regard, we must consider the precedent of the aforementioned judgment of 12 July 2011, in which this issue was examined in relation to the eBay platform.

 

Author: Carlos Morán

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Nine basic issues concerning the new Data Protection Act (II)

Digital rights

Besides dealing with the field of data protection, Title X of the Act lays down a controversial series of provisions dealing with digital rights, such as Internet neutrality, universal access, promotion in education, and extension of the right to be forgotten to social media, that are highly contentious among people in the field.

Labour-related

In the field of labour relations, the Act provides broad protection for employees while placing squarely on employers the need to adjust internal policies to such new factors as:

  1. a) Protection of privacy in the use of digital devices and metered access to content.
  2. b) Digital disconnection, to ensure respect for free time off work.
  3. c) Greater regulation of the conditions of valid video surveillance and audio recording.
  4. d) Employees’ right to privacy in respect of geolocation systems.

 Digital inheritance

Barring a will stipulating otherwise, the heirs, persons related to the deceased, and/or persons designated by the deceased may access the deceased’s content on social media and digital platforms and give service providers instructions as to its use, modification, destination, and removal.

Access to the first part of this post here

Authors: Ruth Benito y Fernando Díaz

Visit our website: http://www.elzaburu.es/en

Nine basic issues concerning the new Data Protection Act (I)

On 6 December the BOE [Official Spanish Government Gazette] published Organic Personal Data Protection and Guarantee of Digital Rights Act, Act No. 3/2018 of 5 December 2018, approved by plenary session of the Senate this past 21 November.

The General Data Protection Regulation (GDPR) does not leave EU Member States much room for manoeuvre, and for that reason the new Act makes constant reference to the Regulation, but it nonetheless contains certain novel provisions discussed here in this post.

Data Protection Officer

In addition to the provisions already set out in the General Data Protection Regulation (GDPR) in this respect, the Act specifies a total of 16 cases in which designation of a DPO is mandatory.

Advertising firms that carry out profiling, operators that offer online gaming, insurance companies, schools, investment service firms that do business in securities markets, financial institutions, and certain energy companies, along with other companies, are all affected by this provision.

Transparency and information

Article 11 of the Act takes what had until now been a recommendation by Spain’s Data Protection Agency and the former Article 29 Data Protection Working Party concerning the layered approach to information and turns it into a mandatory standard.

Accordingly, under this layered information approach, the first layer must necessarily contain, at minimum, the features required in Article 11:

  1. The identity of the data controller and its representative, if any.
  2. The purpose of the processing.
  3. The option of exercising data protection rights.
  4. Where the data are not obtained directly from the owner, the type of data and their source.

Minors

The Act keeps the age limit at 14 years and introduces measures aimed at defending minors and their interactions with the digital sphere, for instance, the possibility of intervention by the Public Prosecutor’s Office in cases when images and personal information of minors are disseminated on social networks if doing so represents an unlawful intrusion on their fundamental rights.

Legitimate interest and public interest

The Act expressly sets out certain instances of data processing in which the data controller is presumed to have a legitimate interest or the processing is presumed to be carried out in the public interest.

The former case includes credit information systems, changes to corporate structure or the sale of companies, and contact details of individual business owners and members of the liberal professions, provided that the processing of location and contact data is restricted wholly to the business sphere in relation to providing specialised services.

As far as the public interest is concerned, the Act addresses video surveillance, files regarding advertising opt-outs, and whistleblowing.

The controversy regarding political parties

The final provisions of the new Personal Data Protection and Guarantee of Digital Rights Act amends the Elections Act to allow political parties to gather and use data collected from websites and other publicly accessible sources, including by electronic means, stipulating that election advertising is not to be considered a commercial communication.

Technically, the implicit consideration of websites as being publicly accessible is an important feature, since heretofore the Internet has not enjoyed this status.

System of sanctions

The Act specifies and classifies infringements of data protection categories into the conventional categories of (i) minor, (ii) serious, and (iii) very serious, while maintaining the fines laid down in the GDPR, ranging from a minimum of €10,000,000 or 2 % of total worldwide annual turnover to a maximum of €20,000,000 or 4 % of total worldwide annual turnover.

Access to the second part of this post here

Authors: Ruth Benito y Fernando Díaz

Visit our website: http://www.elzaburu.es/en

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