Communication platforms face new obligations and high fines in Austria

As part of a regulatory package against hate speech on the Internet, Austria introduced new obligations for communication platforms. These new rules apply to domestic and foreign platforms alike and non-compliance can lead to significant penalties not only for the platform itself but also for its managing directors. The new rules’ conformity with EU law is questionable. However, they came into force on 1 January 2021 and are to be implemented by platforms by 31 March 2021.

Which communication platforms are covered?

The new Communication Platforms Act (“Kommunikationsplattformen-Gesetz”) applies to domestic and foreign providers of for-profit communication platforms that have more than 100,000 users in Austria or revenues in Austria of more than EUR 500,000.

Exclusions: online marketplaces, non-profit online encyclopaedias (such as Wikipedia), and learning platforms, newspaper and television company platforms hosting their journalistic offerings, and apps used for individual communication.

The video content on video-sharing platforms is governed by the rules of the Audio-visual Media Services Act, while the Communication Platforms Act applies to the rest of their content.

The regulatory authority is required to keep a (declarative) list of platforms governed by the new rules. This list must be compiled on the authority’s own initiative since there is no obligation for a platform to notify the authority when it commences or terminates its services. As of the time of writing, the list was not yet available on the authority’s website.

What are the new obligations?

The new rules require platforms inter alia to:

• Appoint and notify the authority of (a) an authorized representative who is responsible for compliance with the new laws, and (b) a representative who is able to accept official communications on behalf of the platform (it may be the same person, but they must speak German).
• Set up an "effective and transparent procedure" for reporting and deleting illegal content:
  • Deletion must take place within 24 hours if the illegality is “obvious to a legal layman (...)”, or within 7 days if a detailed examination is necessary.
  • There must be a complaints procedure for users affected by deletion or blocking to avoid "overblocking".
  • Illegal content comprises, for example, defamation, harassment, pornography involving minors, racist, discriminatory, or national-socialist content, unauthorised photographs, stalking by means of telecommunication.
• Report the number and results of notifications annually (or semi-annually if the number of users exceeds one million).
• Store deleted postings for at least ten weeks for any possible prosecution.
• Pay a financing contribution to the budget of the regulatory authority.

Which sanctions can be imposed for non-compliance?

For failure to comply with these obligations, fines of up to EUR 10 million can be imposed on the platform (depending on several factors, such as revenue, number of users, prior misconduct, severity and length of violation). Moreover, it is possible to impose a fine of up to EUR 1 million on the members of the managing board if upon request from the authority they fail to appoint an authorised representative or a representative to accept official documents served by the authority.

Do the new rules comply with EU law?

According to a communication from the EU Commission to the Austrian government, they do not. In its letter, the EU Commission outlines that the Communication Platforms Act is likely to impede the freedom to provide services. In particular, the EU Commission is concerned about the additional costs and administrative burdens associated with implementing a notification and take-down mechanism and the need to have the necessary language skills and local cultural and legal knowledge to be able to assess content and interact with the authorities. By imposing stricter requirements on operators than those of the country in which they are based, the Communication Platforms Act does not comply with the e-Commerce Directive and does not meet its requirements for exceptions to the country-of-origin principle.

In addition, the EU Commission questions why Austria is passing its own set of rules now while the Digital Services Act is in the making, which is aimed at harmonising at the EU level many items governed by the Austrian Communication Platforms Act. Since the Digital Services Act will take the form of a regulation and hence be directly applicable in each Member State, the EU Commission points out that Austria will have to repeal part of its new laws when it comes into force. In particular, some of the provisions of the Austrian law seem to incentivise the fast take-down of seemingly infringing content – something the Digital Services Act aims to avoid in order to safeguard free speech.

Despite the Commission’s concerns, the Austrian government has not postponed its new regulations, which were triggered by several highly publicised incidents of hate speech against well-known Austrian politicians. It remains to be seen whether the platforms affected by the new laws will observe them or rely on their likely non-compliance with EU law. Considering the high fines possible, it is hard to imagine that the new obligations will be ignored despite considerable concerns as to their legality.

Authors: Gabriela Staber & Angelika Stütz