Contribution by attorney Alessia Salamone published in N&T Plus Diritto – Il Sole 24ORE.
The European Union has adopted two regulations that are destined to radically change the operations of actors in the hotel industry. These are the Digital Services Act (DSA) and the Digital Markets Act (DMA), which aim to regulate the activities of online platforms by ensuring greater transparency and competition in the digital market.
Some specific provisions are already applicable as of November 16, 2022. Most of the provisions of the DMA are applicable as of May 2, 2023. However, one must wait until February 17, 2024 for the applicability of almost all provisions of the DSA.
DSA and DMA: the digital revolution in the hotel world
In recent years, hoteliers have regained ground in terms of online competitiveness, but dependence on online travel agencies (OTAs) remains high and there is still limited awareness of digital complexities. In this context, the DSA (Digital Services Act) and DMA (Digital Markets Act) regulations present themselves as revolutionary legislative initiatives of the European Union for the data economy. For the first time, they regulate the digital space by redefining the relationship between business users and online platforms in light of the principles of transparency, information, and accountability.
The objective is to protect the weaker party in the relationship: commercial users against large platforms. While the DSA aims to regulate digital and innovative services in order to create a safer digital space, the DMA seeks to create a more competitive digital market, preventing manipulative conduct by so-called gatekeepers, namely large companies in a dominant position that contribute to raising barriers to entry in the digital market.
Digital Services Act: protection of online users
The DSA (Digital Services Act) regulation is one of the fundamental pillars of the European digital strategy that aims to strengthen the responsibility of digital platforms for published content, ensuring that such content is legal, does not infringe users’ rights, and respects intellectual property rights.
The regulation introduces new obligations for so-called VLOPs (Very Large Online Platforms) and for SMEs (Small and Medium Enterprises) – modulated according to the size of the platforms and the type of service provided – with the aim of combating the spread of harmful content and ensuring platform operation characterized by transparency and security in favor of users who will be able to understand and govern the algorithmic process used by platforms.
Digital Markets Act: against abuse of dominant position
The objective of the DMA (Digital Markets Act) is to prevent digital platforms from abusing their dominant position to hinder competition with negative effects in terms of proliferation of unfair practices at the expense of commercial users and consumers.
It applies to so-called gatekeepers, namely large companies that offer online intermediation services (including search engines, social networks, messaging and video sharing services) and are able to reach very high numbers in terms of simultaneously connected users and revenue.
The regulation, in particular, intervenes with a set of rules aimed at containing the excessive bargaining power of gatekeepers, imposing limitations on the use of users’ personal data as well as the obligation to allow business users – who use the platform to provide their own services – access to user data collected with their contribution. Furthermore, the DMA prohibits pre-installing certain applications on devices, imposing its own payment method as the only option, and promoting its own products and services to the disadvantage of other operators.
What changes for hotel service providers
For hoteliers, an epochal revolution is in prospect. Thanks to the DSA and DMA regulations, for the first time they will be able to access data – in both aggregated and non-aggregated form – generated by consumers in the context of service provision, without the exercise of this right being able to induce OTAs to obstructionist or retaliatory behavior.
Among these, the most frequent ones concern the alteration of the conditions and/or quality of the intermediation service provided and the manipulation of consumer autonomy through modification of the online interface, influencing, for example, the ranking of the property.
Hoteliers will also be able to understand and govern the algorithm used by OTAs, in order to plan commercial strategies appropriate to the profile of their clientele.
The future of the hotel digital market
The new EU regulations undoubtedly represent a first regulatory step in the long process of restoring balance to the synallagmatic relationship between OTAs and business users, still too heavily tilted in favor of the former.
The full realization of this objective is still far away and, in this sense, the stratification of multiple sector-specific regulatory interventions does not help, as it risks only fragmenting the discipline and available remedies, reducing the level of protection for operators.
The hope for the future is that legislative bodies can become aware of the weakness of the commercial user in the face of platforms and mature the conviction about the necessity of strong protection of commercial users operating online, also through the adoption of an ad hoc code that encompasses sector-specific discipline, not unlike what has been done in the past for the consumer.
