Airbnb is under the scrutiny of the European Union regulators with the new Digital Markets Act, which already affected companies in the sector such as Google or Booking. The accommodation and travel sectors were among the most affected with the Covid-19 pandemic, and the EU is preparing to introduce its first major review for online businesses in 20 years, assessing why platforms act as “gate keepers”. Both Booking and Airbnb occupy a significant part of the short-term rental market on the European continent, which brings them into this category, according to the EU.
Over the last 20 years, online platforms have brought significant benefits for consumers and innovation, as well as wide-ranging efficiencies in the European Union’s internal market. These online platforms facilitate cross-border trading within and outside the Union and open entirely new business opportunities to a variety of European businesses and traders by facilitating their expansion and access to new markets
Although new services, technologies and business models have brought many opportunities in the daily life of European citizens, they have also created new risks to citizens and society at large, exposing them to a new range of illegal goods, activities or content.
Many online businesses have struggled with systematic problems familiar to the platform economy regarding contestability, fairness and the possibility of market entry. Large online platforms are able to control increasingly important platform ecosystems in the digital economy. Typically, they feature an ability to connect many businesses with many consumers through their services that, in turn, allows them to leverage their advantages, such as their access to large amounts of data, from one area of their activity to improve or develop new services in adjacent markets.
The new proposal will have two components, according to the executive vice-president of the European Commission, Margrethe Vestager. Among them is a “clear list of what should and should not be done” for the “great digital guardians” which, according to her, “will be based on our experience with the types of behavior that can prevent markets from functioning properly”.
What is the Digital Services Act package?
The new Digital Services Act package should modernise the current legal framework for digital services by means of two main pillars:
First, the Commission would propose clear rules framing the responsibilities of digital services to address the risks faced by their users and to protect their rights. The legal obligations would ensure a modern system of cooperation for the supervision of platforms and guarantee effective enforcement.
Second, the Digital Services Act package would propose ex-ante rules covering large online platforms acting as gatekeepers, which now set the rules of the game for their users and their competitors. The initiative should ensure that those platforms behave fairly and can be challenged by new entrants and existing competitors so that consumers have the widest choice and the Single Market remains competitive and open to innovations.
As a part of a robust and active consultation process, the Commission initiated a public consultation to support the work in analyzing and collecting evidence for scoping the specific issues that may require an EU-level intervention. All European and non-European citizens and organizations were welcome to contribute to the consultation.