Holznagel, Daniel

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A Self-Regulatory Race to the Bottomthrough Art. 18 Digital Services ActDaniel Holznagel 2022-03-16T11:53:57The (Meta) Oversight Board is a unique and expensive organisation. Financed byFacebook through a $130 million trust, its aim is to protect free expression by makingprincipled, independent decisions about important pieces of content and by issuingadvisory opinions on Facebook’s content policies. The Board has well-renownedexperts in its ranks, and is getting a lot of attention.A similar, though less well-known self-regulatory body has been set up by YouTubeand Facebook in Germany. The NGO “Freiwillige Selbstkontrolle Multimedia-Diensteanbieter” (FSM) has been certified as a self-regulation institution under theNetzDG by the Federal Office of Justice. Platforms can now ask the FSM to decidetough content removal cases. Though working more quietly than the OversightBoard, the FSM also has set up high-quality processes, where panels consisting ofspecialised lawyers are delivering well-reasoned and, as it seems to me, thoroughlybalanced decisions.However, one problem remains: both institutions are exclusive. Everyday userscannot demand a review of a case, or at least – as with the Oversight Board – theyonly have a very slim theoretical chance of bringing their case to these high-profileentities.These things are well-known. But it remained somewhat under the radar thatboth the Oversight Board as well as the FSM might face cheap and non-exclusivecompetition through future out-of-court dispute settlement bodies, which will beintroduced by the Digital Services Act (DSA).Art. 18 of the draft DSA, which will introduce these new dispute settlementprocesses, addresses a legitimate policy concern, namely the need to enableeffective recourse mechanisms for platform decisions. However, as I will explain inthe following paragraphs, the concept fails when trying to combine the best of twoworlds: solving disputes through real courts as well as through self-regulation. Art. 18DSA raises serious concerns and should be substantially modified.Certification of out-of-court dispute settlementbodiesArt. 18 DSA will allow for the certification of out-of-court dispute settlement bodies.Anyone who can show independence (from platforms and from its users alike) andwho can demonstrate expertise in content moderation matters (across applicablelaws and Terms of Services) can apply to be certified by authorities. One can- 1 -imagine that lawyers or former platform trust and safety staff might be good fits to setup such bodies and to seek certification.Once an entity is certified, users can request the body to review their dispute over amoderation decision. For example, when Facebook suspends the account of a useror removes a specific piece of content, that user can then ask the body to initiate adispute settlement process concerning the platform’s decision. According to Art. 18DSA, the settlement body shall then resolve the conflict in a swift, efficient, and cost-effective manner.There are still many open questions regarding what future proceedings will looklike. As a central issue, it is still debated whether decisions by the settlement bodieswill be binding (that’s the proposal of the European Commission and the EuropeanParliament) or whether these decisions will be mere recommendations (that’s thecurrent position of the EU member states). One underlying concern here is thatbinding decisions by future Art. 18 bodies would make these bodies private de-facto-courts, as I have criticised before.In-built biases and one-sided incentives to “sue“Some other specific features of the potential future settlement processes seemworrisome, as they might disproportionately favourusers, who might be over-incentivized to “sue”:1. Platforms must cooperate: As a general rule, platforms must take part in theproceedings. This means a user can drag Facebook, for example, before thesede-facto courts.2. Incentives to “sue”: The user will bear minimum financial risks, instead facesincentives to “sue”. If the user loses the case, they will bear their own costs, butgenerally will not have to reimburse the platform. It remains unclear whetherthe user, when losing their case, might at least have to bear the fees of theproceedings. This is not mirrored the other way around: If the user wins, theplatform must reimburse them for any fees and other reasonable expenses (thiswould probably includereasonable attorney fees). Overall, this scheme comesclose to playing roulette with free chips but where profits are paid out in realdollars.3. Built-in bias: The dispute settlement bodies will be financed through thefees charged for the dispute settlement. However, it will be the user affectedby a content decision who can initiate the proceedings. In this setting, onlywhen users are willing to bring cases, funding will be secured. Since theuser may select any certified settlement-body this bears the risk of a built-inbias. To attract users, the settlement bodies might tend to interpret laws andCommunity Standards in an overly expression-friendly way, which should leadto higher chances for users to win a case. In my opinion, this problem wouldnot be solved if Art. 18 DSA also allowed notice-senders to bring disputes (assuggested by the EU member states) . This might lead to some settlementbodies “specialising” the other way around, building a reputation for beingvery enforcement-friendly. Finally, I do not think that disabling forum shopping- 2 -in Art. 18 DSA would solve the problem. Given the experiences with currentlitigation over content-removal decisions, it is highly likely that Art. 18 DSA willoverwhelmingly be initiated by affected users (uploaders). So even if applicantscouldn’t forum-shop, the Art. 18 DSA entities would still face incentives tostructurally favour users.Competition for the Meta Oversight Board and theFSMTo summarise, the future Art. 18 DSA – bodies are low-threshold, non-exclusive,and attempt to be attractive to users, who can drag platforms there. All this makesthese proposed bodies a nasty competition to the Oversight Board and the FSM,which, given the costs which come with every decision, probably cannot open uptheir high-quality proceedings to every-day-user complaints. This alone bears therisk of diminishing, for example, the Oversight Board’s influence.One could still try to brush off such concerns with the argument that the Board’sinfluence mainly lies beyond decisions on a specific item of content. A goodpart of the Board’s influence stems from its role to deliver more general policyrecommendations, as seen, for example, in a decision published on 1 February2022, where the Board made recommendations to Facebook on how to modify itsChild Sexual Exploitation, Nudity and Abuse Community Standard. However, theArt. 18 DSA bodies may be active in the field of more general recommendationstoo, since they will need to raise attention for their businessand to demonstrateexpertise in the areas at hand. Indeed, future Art. 18 DSA bodies even have alegal basis to be outspoken beyond specific decisions: One central question whenreviewing content moderation decisions is whether or not the respective CommunityStandards are valid in the first place. Art. 18 DSA bodies will need to make decisionson this, for example, whether a given Community Standard is invalid because itdisproportionately discriminates against the users under applicable law, as theGerman Federal Court of Justice recently ruled on parts of Facebook’s CommunityStandards.High costs for platformsFor the platforms themselves, what might be most worrying will be the costs thatwill come with numerous settlement proceedings. As I have described above, theprocedures will produce costs on the side of the platforms, even if they win. If theplatforms lose, costs rise: they will then also have to reimburse the users’ legal fees.This might easily result in hundreds or even thousands of Euros a platform has topay for a proceeding over a single moderation decision. For very large platforms,costs might add up to millions of Euros per year. Even if companies like Facebookand YouTube could bear such costs coming with an additional layer of dispute-settlement: Art. 18 DSA does not only apply to such gigantic platforms. All onlineplatforms bigger than small enterprises (see Art. 16 DSA) can be dragged intoproceedings, that is, by the applicable definition, every platform with more than- 3 -50 employees or with an annual turnover of more than 10 Mio Euro. For manysuch medium-sized platforms, costs of about tens of thousands of Euros, whichmight result from only a few dispute settlement proceedings, might have severeconsequences.Not only platforms and the Oversight Board shouldbe worriedIn the end, you might ask: Why not? Is this not just lamenting over industry-financedadvisory-bodies facing independent competition? Wouldn’t Meta and YouTube bevery capable of bearing the costs? And for smaller platforms, couldn’t legislators justexempt them more broadly from Art. 18 DSA?One might argue so, if we could expect Art. 18 DSA to introduce meaningful dispute-settlement in the first place, which seems highly questionable.First of all, as I have argued elsewhere in more detail, since Art. 18 DSA allowsusers to “drag” platforms into dispute-settlement against their will (basically, at theirexpense), this probably conflicts with fundamental rights, especially if lawmakersdecide to make Art. 18 DSA bodies’ decisions binding. Besides such legal concerns,the envisaged dispute settlement bodies might be biased by design (as describedabove). Moreover, Art. 18 DSA bears the risk of nourishing a questionable“settlement-industry” (given the costs/reimbursement scheme described above).Picture ambulance-chasing lawyers chasing Facebook users or think of kick-backagreements between users and some lawyers.Finally, we should also be worried about which kind of users the future Art. 18 DSAbodies will attract. I expect that especially trolls, conspiracy theorists and right-wingusers will be excited to drag Facebook & Co. into proceedings, fighting for their rightto speak “awfully but lawfully”, enjoying the spotlight. Consider which litigation overmoderation decisions we already see today: right-wing and/or hateful content isoften at the center of court proceedings against platforms over the reinstatement ofcontent or the re-activation of accounts (as indicated by observations for Germany,and for the U.S.). I also have a certain gut-feeling that the respective group ofclaimants might often enjoy dragging affected third parties into the proceedings,for example, the person who requested the take-down in the first place – Art. 18DSA does not yet solve the problem of how these persons, especially when they arevictims of the disputed content, can safely be part of the proceedings.ConclusionArt. 18 DSA seeks to address a legitimate policy concern: effective recoursemechanisms for platform decisions. But we already have the legal framework forthis: in Europe, users can successfully sue platforms in “real” courts when platformdecisions are unjustified. Sure, court proceedings can be lengthy and costly, andwe should make these proceedings easier and more effective. Complementary tostate courts, we might welcome truly voluntary self-regulation like the Oversight- 4 -Board or the FSM and, of course, the platforms’ own in-house appeal-mechanisms.However, Art. 18 DSA fails in trying to combine both aspects – courts and self-regulation. Itintroduces a highly questionable regime of private de-facto courts. Asa side effect, it risks fouling the widely welcomed voluntary self-regulation that Metaand YouTube have set up (Oversight Board, FSM). And at least smaller platformswill be overburdened by Art. 18 DSA. If European lawmakers do not want to let go ofArt. 18 DSA, they should radically modify it: taking part in these proceedings needsto be voluntary for the platforms, even if at practical level this might come close tofully abandoning the proposal.- 5 -

A Self-Regulatory Race to the Bottom through Art. 18 Digital Services Act

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A Self-Regulatory Race to the Bottom through Art. 18 Digital Services Act

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