Testimony to the disproportionate and undemocratic power amassed by GAFAM (Google, Apple, Facebook, Amazon, Microsoft), and other gatekeepers in the last two decades, on December 15, 2020, the venerable EU institutions published a new legislative proposal promoting contestable and fair markets in the digital sector, the Digital Market Act (DMA) and protecting users fundamental rights through the Digital Service Act (DSA).
If any lesson is to be taken from the 2018 GDPR impact, as within two years of adoption its iterations spread through Brazil, India, China, California, and is being studied for application in the US, this legislation is likely to be emulated outside the EU area in the foreseeable future.
What are the Proposed EU Digital Markets Act and Digital Services Act Main Complaints Against Digital Gatekeepers?
The EU regulatory body was spurred into action following a Commission’s Open Public Consultation (OPC) and the answers of the National Competition Authorities (NCAs) to the Commission’s questionnaire. These highlighted widespread digital market failures across the Union, in particular in digital markets of cross-border nature.
They identified the following as potentially damaging constitutive elements of a number of digital services defined as “Core Platform Services”:
- Highly concentrated multi-sided platform services allow one or very few large digital platforms to set commercial conditions with considerable autonomy.
- A small number of large digital platforms act as gateways for business users to reach their customers and vice-versa, with little or no alternative or recourse for users.
- Gatekeepers of these large digital platforms often misuse their power by means of unfair behavior vis-à-vis economically dependent business users and customers.
These core platform services cover the following areas:
- Online intermediation services (incl. for example marketplaces, app stores, and online intermediation services in other sectors like mobility, transport, or energy)
- Online search engines,
- Social networking
- Video sharing platform services,
- Number independent interpersonal electronic communication services,
- Operating systems,
- Cloud services
- Advertising services, including advertising networks, advertising exchanges, and any other advertising intermediation services, where these advertising services are being related to one or more of the other core platform services mentioned above.
In short, in today’s digital world, users are hostage to a small number of service providers to access services on which their livelihood may depend or services ranging from access to banking digital facilities, information, and more.
What are the remedies offered by the Digital Markets Act?
- Fines up to 10% of yearly revenue of the previous financial year
- Daily fines up to 5% of the daily revenue of the previous financial year for continued non-compliance
- Obligation to divest in case of continued breaches
Is 2key Network Compliant with the Proposed -EU Digital Regulations?
As 2key offers a marketing product, it is directly targeted by the proposed EU Digital Regulations. Yet, unlike its Web 2.0 alternatives, 2key is a decentralized App, a DApp, and as such is compliant by design, since its very mission is to ensure a fair share for sharing.
Transparency
The various requests for transparency and fairness required by the DMA and the DSA are less encompassing than 2key’s own dedication to ensuring maximum transparency for users at every stage.
Both personal and page dashboards display the full history of the users' lifetime actions, their used and earned budget, along with their reputation score and related earnings.
As for the use of revenue generated by the platform, the complete tokenomics is publicly available and ruled by smart-contracts, hence impervious to modifications. The use of generated revenues are thus transparently available by design.
Fair Pricing Policies
DMA provisions to prevent platforms from using their power to dictate unfair pricing policies seems to indicate that such practices are prevalent in today’s digital market.
On the contrary, on 2key, pricing is user-generated with no interference from the platform. Users freely define the reward-per-click amount or the percentage of the monetary transaction to redistribute as a reward to referrers. This price is final and impervious tho sudden price hikes frequent in ad-bidding wars that dictate click price in today’s major digital ad marketplaces.
This means that not only are pricing options entirely transparent both to Smartlink creators and to SmartLink referrers, they are also established exclusively by users with no interference from 2key.
Openness to third party services
When an external service, such as KYC is required, 2key already offers the options between its own built-in KYC service and external providers, with the goal of offering users as much freedom of choice as possible.
Users are able to operate with the 2key network in-app non-custodial hot wallet or tap with their external wallet. More compatible wallets are continuously added.
Contestability
When algorithms manage the decision to monitor or censor content, errors are likely to happen. Users should have timely recourse to contest the decision to filter out or otherwise penalize their content.
Currently, 2key combines a mix of algorithmic evaluation of SmartLink’s content based on recipient feedback to grant or subtract Reputation Points to SmartLink creators and referrers.
As the network grows, moderators will be added and SmartLink creators will have the option to opt-in moderation services and add a budget to cover the moderators’ fees.
Unlike what is taking place today in major platforms, the moderators’ fees will not be dictated by a platform needs to minimize moderators’ costs. On the contrary, each SmartLink creator will be given the option to provision a moderation budget and then choose to select moderators according to their Reputation Score. They will freely decide if they want to privilege highly reputed moderators at a higher cost, a larger number of less reputed moderators, or no moderation at all.
So, as 2020 comes to a close, tech giants still rule the digital space. With the upcoming regulations curbing their ability to grow at the expense of users’ rights and freedom and the increased inclusion of cryptocurrencies in regulatory frameworks, we hope to see a turn in 2021that will bring decentralized platforms and economy gain traction to the front, for the generalized benefit of end-users.
2key is spearheading that movement, so, if you believe in fairness and transparency, turn this post into a SmartLink before sharing it forward!
