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PRESS RELEASES 27 April 2022

The Digital Services Act should help crack down on illegal goods but is not future-proof

Brussels, 27th April 2022 – AIM, the European Brands Association, welcomes the provisional political agreement reached on 23rd April between the European Parliament, Council and Commission on the proposed Digital Services Act (DSA). The final text strengthens obligations on online marketplaces to better fight against counterfeiting but fails to include future-proof rules that take into account the reality of current and future online commerce.

We welcome the DSA’s new measures that will help curb the sale of illegal goods online, including a harmonised “notice and action” mechanism at EU level to flag and remove illegal goods online and additional obligations for very large platforms, such as taking risk mitigation measures.

AIM welcomes in particular:

  • the removal of the requirement to represent “collective interests” in Article 19(2)(b) of the Commission’s proposal to apply for trusted flaggers status, meaning that individual brand owners will rightly be recognised as such experts and ensure that their IP infringement notices are treated promptly by online platforms.
  • the new requirement on online marketplaces to verify the identity of their business users offering goods for sale on their services (the “Know-Your-Business-Customer” obligation).
  • the additional duty of care on online marketplaces to make reasonable efforts to prevent illegal products from appearing on their services, including though random checks on whether products have been identified as illegal in official available databases that was absent in the Commission’s proposal.
  • the further obligation on marketplaces to inform consumers that they have bought an illegal product after becoming aware of its illegality.

These new measures and obligations will contribute to ensuring a safer online environment and to guaranteeing that “what is illegal offline is also illegal online”.

The DSA is, however, a missed opportunity to more effectively tackle the ever-increasing amount of illegal products sold online by:

  • failing to extend these new obligations beyond online marketplaces to all online intermediaries involved in the sale and/or promotion of illegal goods online, notably social media, apps and advertising platforms.
  • failing to introduce a stay down obligation on hosting service providers to prevent previously flagged and taken down/disactivated or similar content from reappearing on their services.
  • carving out an exemption from due diligence obligations for small platforms and for those who have become medium-sized for one year, given the potential reach of even the smallest platforms to the EU’s consumers.

“The DSA has introduced many measures that will protect European consumers from rogue traders on online marketplaces, but regrettably it has also created a loophole for those same traders to continue operating through other online players”, observed Michelle Gibbons, Director-General of AIM. “Rogue traders increasingly sell illegal products on social media and live streaming apps, which are subject to lighter obligations, therefore consumers are not afforded the same protection on those channels. Given the additional lack of a stay down obligation on hosting providers, this offers even further opportunity for ‘repeat offenders’. There is a risk that the DSA will become quickly outdated. It is thus essential for the Commission to assess how to address this loophole and complement the DSA with a robust IP toolbox containing practical tools that can be used to bolster the fight against counterfeiting online. The Commission should also adopt a comprehensive strategy that aligns all agencies and authorities.”

 

Contact

For further information, please contact: Amaury Libbrecht

Tel: +32 2 736 03 05 • Email: amaury.libbrecht@aim.be

About AIM

AIM (Association des Industries de Marque) is the European Brands Association, which represents manufacturers of branded consumer goods in Europe on key issues that affect their ability to design, distribute and market their brands. AIM’s membership comprises 2500 businesses ranging from SMEs to multinationals, directly or indirectly through its corporate and national association members.