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Proactive enforcement exempts platforms from further liability and reduces overall costs

Yassine Lefouili and Leonardo Madio, 2022 - *Toulouse School of Economics, University of Toulouse Capitole, Toulouse, France AND **Department of Economics and Management, University of Padua, Padua, Italy “The economics of platform liability” Eur J Law Econ. 2022; 53(3): 319–351. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8857911/ //DH

It is fundamental that service providers should not be discouraged from taking proactive measures that increase their level of knowledge on misconduct occurring on the platform. In the European Union, as discussed broadly by several scholars (e.g., Buiten et al., 2020), platforms might not have appropriate incentives to monitor online activities. This is because the current liability regime grants hosting platforms liability exemption based on the so-called “knowledge standard”. In other words, platforms can benefit from immunity when they do not know about illegal ongoing activity or information hosted on the platform and when they act expeditiously to block access to it upon notification. One often proposed solution is the adoption of a “Good Samaritan” approach, already present in the US, which exempts platforms from liability when pro-active measures to detect online misconduct are undertaken (Buiten et al., 2020). Such an approach would not only induce platforms to observe, monitor, and become informed about online misconduct but would also increase their incentives to ban and report wrongdoers in a timely fashion because of the reduced expected costs that banning and reporting would imply.38 In this sense, a “Good Samaritan” rule may foster self-regulation. We note that the recent proposal unveiled by the European Commission for a Digital Services Act fills the void that was present in the previous regulation by introducing a liability exemption also for those intermediary services that “carry out voluntary own-initiative investigations or other activities aimed at detecting, identifying and removing, or disabling of access to, illegal content” (Art. 6).

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