Vol. 301 No. 12
The Minister of State's opening remarks are not to exceed ten minutes; those of group spokespersons are not to exceed ten minutes; those of all other Senators are not to exceed five minutes; time may be shared, and the Minister of State shall be called to reply to the debate.
I welcome the Minister of State, Deputy Calleary, and I congratulate him on his elevation last week to the position he now entertains in being a Minister of State at Cabinet. Déanaim comhghairdeas leis an Aire Stáit.
Gabhaim buíochas leis an Seanad as an díospóireacht seo a thógáil. I thank the Cathaoirleach for his good wishes.
I am pleased to bring this Digital Services (Levy) Bill 2024 to the House, which amends the Broadcasting Act 2009, as amended by the Online Safety and Media Regulation Act 2022 to extend Coimisiún na Meán's power to raise the levy in section 21 of that Act to cover its new functions under the digital services regulation and the terrorist content online regulation. It does this by introducing two new categories of providers, those that must comply with the digital services regulation and those that must comply with the terrorist content online regulation.
The Bill secondly proposes to amend the Digital Services Act 2024 to introduce a power for the Competition and Consumer Protection Commission, CCPC, to raise a levy for its new functions under the digital services regulation. Although the CCPC also has an existing power to raise a levy, it is confined to a specific and limited area of its remit, namely, financial education, and it is charged to regulated financial services firms, which are not covered by the digital services regulation. This Bill enables the CCPC to levy providers of online marketplace intermediary services to fund its new functions as a competent authority with respect to that group of online providers under the digital services regulation. The Bill models the new levy on an coimisiún’s existing levy power so the new levies are aligned.
Finally, the Bill enables Coimisiún na Meán and the CCPC to agree arrangements so one authority can collect levy funding on behalf of the other to reduce the administrative burden on providers.
In February the then Minister for Enterprise, Trade and Employment commenced the Digital Services Act 2024. I place on record my thanks to this House for its co-operation in facilitating that. That Act designated Coimisiún na Meán as Ireland’s digital services co-ordinator, which is the lead competent authority for the EU digital services regulation. The Digital Services Act 2024 also designated the Competition and Consumer Protection Commission as a competent authority with specific responsibility for the elements of the EU regulation relating to online marketplaces.
In November last year, the Minister for Justice designated Coimisiún na Meán as a competent authority to oversee the implementation of specific measures in accordance with Article 5 of the EU regulation dealing with the dissemination of terrorist content online, known as the terrorist content online regulation, TCOR. Substantial Exchequer resources have been provided to both the digital services co-ordinator, Coimisiún na Meán, and the CCPC to ensure effective and efficient execution of their responsibilities. Government support for the digital services co-ordinator function in Coimisiún na Meán in the second half of 2023 and for 2024 has ensured a strong foundation has been laid for the Irish authorities that are enforcing the digital services regulation. This support enables the recruitment of staff with the necessary technical, legal and regulatory skills for an coimisiún to carry out its function as the Irish DSC and for the CCPC as a competent authority.
Coimisiún na Meán has had notable accomplishments in its initial phase of operation under the digital services regulation. It has developed a strong new compliance framework, established co-operation agreements with national and international bodies, set up an incident response protocol and established common assessment and certification processes. It has built its engagement mechanisms with the public and from day one in February its contact centre has been up and running to receive complaints, as is required in the digital services regulation. An coimisiún is playing a key role at a European level in the consistent and effective implementation of the digital services regulation in the EU. It has been widely acknowledged by other European DSCs and the European Commission that Coimisiún na Meán is at the forefront of digital services co-ordinators in Europe. It was one of only six legally designated and fully empowered DSCs at the inaugural meeting of the new European board for digital services on 19 February. It is clear the digital services regulation is of particular importance to Ireland given the presence here of 15 of the 24 largest platforms in Europe, or to look at it another way, Ireland is of particular importance to the digital services regulation. We take this very seriously.
While Government support was necessary to ensure the regulators were ready from day one, it has always been my intention that the new functions of both Coimisiún na Meán and the CCPC would be funded by way of an industry levy from 2025. This Bill provides the legislative basis for that. Although Coimisiún na Meán already has a power to raise a levy, this is currently confined to levying those cohorts of service providers that come within an coimisiún’s existing competence under the Broadcasting Act 2009, as amended. These cohorts do not coincide with the service providers that are now regulated by an coimisiún in its capacity as the digital services co-ordinator or as competent authority for the terrorist content online regulation, so this Bill now adds those categories.
The levy is designed to be cost recovery in nature and is not revenue generating. It is to recover the costs incurred for the activities undertaken by Coimisiún na Meán and the CCPC in their work enforcing the digital services regulation or the terrorist content online regulation. In making the levy order, the regulators may exempt service providers from payment or defer payment due to consideration of the factors set out in the Act in section 21 for Coimisiún na Meán and in section 45A for the CCPC. These factors include the financing of a provider and the nature and scale of services provided.
The Bill also ensures the levy rate set by Coimisiún na Meán and the CCPC in respect of their competences under the digital services regulation takes account of the fact that some supervisory and enforcement functions in respect of the very large online platforms or search engines are either within the sole competence of the European Commission, or are shared between it and the national competent authority where that very large online platform or search engine is established. In such instances, the European Commission may charge an annual supervisory fee under the digital services regulation.
The EU digital services regulation also recognises that member states’ authorities may charge providers established in their territory a supervisory fee. Other member states, such as Austria, Hungary and Romania, have also adopted, or intend to adopt, supervisory fee models. The EU digital services regulation itself has a tiered approach and targets the obligations towards the very large providers. Small and micro enterprises are exempt from most of the obligations in the regulation. This Bill provides that in calculating the amount of the levy, Coimisiún na Meán must ensure the levy quantum imposed on each category of regulated entity is proportional to expenses incurred in functions related to that category.
The legislative approach to this levy contains significant principles and policies which guide Coimisiún na Meán and the CCPC in the creation of levy orders but does not unduly impede their discretion or independence. Work to implement the methods of calculation and application of the levies for 2025 will include a public consultation to seek the views of all stakeholders, including service providers that may be subject to a levy. It is important that this legislation is enacted before the summer recess so that both organisations can prepare their operations to apply the levy from next January.
Having set out the background, context and purpose, I will now outline the Bill’s main provisions. It is a short Bill, and it has been drafted to ensure consistency between the provisions for Coimisiún na Meán and the CCPC. The Bill has three Parts with six sections. Part 1 of the Bill deals with preliminary and general matters common to legislation, namely commencement, definitions and expenses. Part 2 of the Bill amends section 21 of the Broadcasting Act 2009, as inserted by section 8 of the Online Safety and Media Regulation Act 2022, to extend Coimisiún na Meán’s existing levy-raising powers to cover their new functions. It does this by inserting “intermediary service providers” and “hosting service providers” in the list of categories of entities on which they may impose a levy. This Part also inserts a new section that enables Coimisiún na Meán to enter into an arrangement with the CCPC with regard to the collection of a relevant levy.
Part 3 inserts three new sections into the Digital Services Act 2024. This is modelled on section 21 of the Broadcasting Act 2009 so that the two levies are set and enforced according to the same statutory rules. The first new section introduces a power for the CCPC to charge a levy on consumer online platform providers that are within its remit under the digital services regulation. It sets out the factors that must be taken into consideration, which include the financing of a provider, the nature and scale of the provider’s services and whether the provider is subject to the European Commission’s supervisory fee. It also sets out the procedures that must be followed when issuing a levy order.
The second new section provides for the enforcement of levy orders, whereby a levy payable under a levy order may be recovered by the CCPC as a simple contract debt in any court of competent jurisdiction. The third new section contains provisions for the CCPC to enter an arrangement with Coimisiún na Meán with regard to the collection of a relevant levy.
The synergies generated by the colocation within Coimisiún na Meán of the supervisory and enforcement responsibilities for the digital services regulation, the EU terrorist content online regulation and the Online Safety and Media Regulation Act 2022 already provides cost savings for the Exchequer. The colocation enables an efficient and cohesive implementation of this regulatory framework for the benefit of the public and of providers. This Bill will provide that the full cost of enforcing these regulations is borne by industry rather than the taxpayer. The levy funding model will also enable sustainability, flexibility and independence for regulators.
I thank the officials in my Department for their work on the Bill, and I thank Senators for their attention. I commend the Bill to the House and look forward to the debate.
I welcome the Minister of State . I also welcome the legislation.
As the Minister of State outlined, the Bill extends the levy-raising powers of Coimisiún na Meán and the CCPC to allow them to fund new enforcement functions under the Digital Services Act 2024 and the terrorist content online regulation. The aforementioned Act designated Coimisiún na Meán as the lead competent authority of the EU digital services regulation, known as the digital services co-ordinator, and the CCPC as the competent authority with responsibility for oversight of obligations in the digital services regulation that apply only to providers of online marketplace services. Coimisiún na Meán was also designated as a competent authority for overseeing the implementation of specific measures of the EU regulation on addressing the dissemination of terrorist content online, known as the terrorist content online regulation.
Coimisiún na Meán already has the power to raise a levy, provided for in section 21 of the Broadcasting Act 2009, as inserted by section 8 of the Online Safety and Media Regulation Act 2022. However, that power is confined to levying those cohorts of service providers that came within an coimisiun's existing competence under the Broadcasting Act 2009, as amended. These cohorts do not match exactly the type of service providers now regulated by Coimisiún na Meán in its capacity as the digital services co-ordinator. Similarly, they do not necessarily cover the group of hosting service providers within the scope of the terrorist content online regulation. As a result, this legislation is needed to extend Coimisiún na Meán's power to enable it to levy those service providers in scope of both the digital services regulation and the terrorist content online regulation.
It was essential that significant funding be provided to Coimisiún na Meán in order for it to effectively carry out its responsibilities. The Government did that when it allocated €2.7 million in budget 2023 to Coimisiún na Meán to support the establishment of the regulatory function under the digital services regulation and in budget 2024 when it allocated a total of €6 million to allow an coimisiún to complete preparations and capacity-building and support initial operations from February of this year. That Government support and funding has been essential in enabling Coimisiún na Meán to start off in a positive manner, as it has done by already making a significant impact with several notable goals met in the early stages of its existence. These include: development of a strong new compliance framework; establishment of a co-operation agreement with international bodies; setting up of an instant response protocol; and establishment of common assessment and certification processes and of engagement mechanisms with the public, including a content centre for complaints, as required under the digital services regulation.
Coimisiún na Meán also plays an important role at European level in the consistent and effective implementation of the digital services regulation in the EU. It is widely acknowledged by other European DSCs and the European Commission that Coimisiún na Meán is at the forefront of DSCs in Europe. It was one of only six legally designated and fully empowered DSCs at the inaugural meeting of the new European Board for Digital Services on 19 February last.
Of course, this is only the beginning. The responsibilities of Coimisiún na Meán will continue to grow in the years ahead and it is essential that the Government continues to provide funding for Coimisiún na Meán so it can build its resources and will be fully capable of meeting the demands placed on it.
I welcome and fully support this legislation, which is clearly necessary. I thank the officials for their work.
The Cathaoirleach might not be aware but we have been joined by 20 Tipperary people. I have great company with me.
I, as Cathaoirleach, formally welcome them to Teach Laighean. They are from the Irish Countrywomen's Association, ICA, in the Glen of Aherlow. I thank them for being here. I am glad the hay is saved and Cork has won.
I do not normally have this sort of back-up when I speak. I will be brief. I congratulate the Minister of State on his elevation last week, which was well deserved. I look forward to continuing to work with him. I am delighted he will remain within this portfolio, which will be important for the next number of months.
The Minister of State has addressed most of the points and I would only be repeating the matters raised by Senator Crowe. I welcome this important Bill. As the Minister of State said, it is particularly important to Ireland because we have 15 of the 24 largest platforms in Europe. It is important from our perspective. This was agreed when the Online Safety and Media Regulation Act was coming through the Houses. It was spoken about at that time, in particular. As the Minister of State said, it is important that we get this legislation through before the recess. I suspect we will back for Committee and Remaining Stages next week because we must ensure this levy is in place for January 2025. We will play any role we can to support the Minister of State to ensure this will be fast-tracked as quickly as possible. I am sure amendments will be submitted on Committee Stage and we will have further opportunities to talk about the Bill in more detail, which I look forward to. The Fine Gael side of the House will support the Bill.
Our friends from Tipperary can be very proud of Senator Ahearn, who is a fine Seanad representative for the people of Tipperary. I call Senator Higgins, who is an equally fine public representative.
I thank the Cathaoirleach. The Minister of State is welcome. The Bill too is welcome. I look at it alongside some of the other pieces of work in which Coimisiún na Meán is engaged. I wish to highlight the potential to do something more with the levy than is being proposed. When we were considering the Online Safety and Media Regulation Act, one important aspect transposed the audiovisual directive. That directive had a protective function in the online media space and also had a mandate in respect of participation. There is the long-established European principle of l'exception culturelle, which was introduced during the General Agreement on Tariffs and Trade, GATT, talks. It is a principle of participation and empowerment. It was appropriate when transposing the directive into the legislation that the option was given to introduce a levy and grant to Coimisiún na Meán the capacity to place a levy on broadcasters not just for the day-to-day functioning of Coimisiún na Meán but also to allow it to apply a specific levy for a fund to be used for cultural producers and those who create to allow, in turn, for a diversity of voices to come through within the online media space. The choice was made to include that important power and there is potential for something similar in respect of this legislation.
I know it is late and the Government is moving the Bill through quickly but there are a couple of ways to tackle this issue. This is different because we are talking here about the digital services directive and the digital services providers, including the very large online platforms. There are references in the Bill to a "very large online platform or very large online search engine".
As has been mentioned, many of them are headquartered here in Ireland. I think there is potential not just to look at their contribution to the functioning of their own supervision through Coimisiún na Meán but also to look at that participation point. It probably sounds too pejorative to say it is a polluter pays principle. It is not quite that although it could be the case in some instances. It would be the idea that they are creating an environment in which social costs and social needs are created and they can contribute to it. I brought this up previously with regard to the general data protection regulation.
I had the idea at that time that perhaps where there were fines, a portion of the fines could be ring-fenced for a digital empowerment fund. While that choice was not taken up at the time, there is significant potential in this new levy structure. We mentioned that a complaints mechanism portal will be part of what may be funded. Maybe something that also needs to be funded is something like a digital empowerment fund. When I talk about a digital empowerment fund, I am imagining things that ensure our citizens are empowered in their engagement with those very large online search platforms and that we have a public which is properly empowered in its engagement. It is not just about being educated or employment in the area but how people engage, so that they know when they are being targeted in certain ways and they have the skills to navigate and make choices in the online space which they are entitled to as citizens because of these directives and the fact that we have chosen collectively, as European parliamentarians, to say that this is an area where there are rules.
I think of things like the Silver Surfer initiative, the CoderDojo projects and others relating to online safety and bullying online. There are so many areas where there are small projects doing good work, often with almost no money. If a portion of this digital services levy was designated for a digital empowerment fund, to which groups could apply for small grants, it would really contribute to people being in control and empowered when they engage online. That has to be in all generations and all parts of society. Sadly, the statistics from Europe show that Ireland has very low digital literacy. About 40% of people do not have full confidence in performing basic functions online. We know that many people depend on another member of the family, a friend or a neighbour. People who are not confident online can be vulnerable when there are poor practices from large online providers or search engines.
We also have a next generation coming up. We want to make sure they are the shapers of digital services in the future and not simply the target. I know that the Ministers, Deputies Foley and O'Gorman, have launched Ireland's Literacy, Numeracy and Digital Literacy Strategy 2024-2033, which is welcome, but that strategy is very much focused on parents and children. It is specific and necessary but we really need a whole-of-life and whole-of-society intergenerational approach to digital empowerment. I know this is a late stage and that the Minister of State wants to move this through quickly. I think this could be done by establishing a separate fund in the legislation. Alternatively, it could be done by slightly adjusting the functions of Coimisiún na Meán, because this fund is designed to support the functions of Coimisiún na Meán so that its functions could allow for the potential of creating a digital empowerment fund in the future. There are a couple of ways that it could be tackled, either by saying that the levy can go to the functioning of Coimisiún na Meán and the digital empowerment fund, or through including the potential of administering a digital empowerment fund as one of the functions. There are different ways in which it could be tackled.
This is an opportunity.
Even if it was to be constrained to the very large online platforms or search engines, in itself, a small levy in respect of those actors would be substantial, even if it was not to extend to all digital service providers. It could be within the general levy or it could be a specific one for the very large actors.
The final way that it could be done is in section 6(8), by means of which the new section 45A is being inserted and the surplus of income is being addressed. Where there is a surplus of income from levies imposed, it is currently provided that it will be refunded or offset against charges. Again, however, even if the surplus of the levy were to be designated for digital empowerment purposes, there are a few different ways to come at it. We perhaps missed a little bit of an opportunity in relation to fines under the general data protection regulation, which have been substantial, in terms of having some portion of those fines allocated to empower people. In a way, having an empowered population is itself a great deterrent against poor practices in terms of the digital space, because they are the ones who will point to the laws and their rights and signal any poor practice. It is almost a case of having some of the fine from the problem create part of what I believe will be the cure. By addressing the symptom, we will provide a cure. We missed that opportunity with the general data protection regulation. I hope we do not miss it with the digital services levy.
I will be bringing forward amendments, but the Minister of State and I are both aware that they will probably be ruled out of order because they relate to financial matters. For that reason, I wanted to address him on Second Stage and urge him to consider how these things might be addressed, especially as the Bill presents us with an opportunity to deal with them.
I congratulate the Minister of State on his appointment to Cabinet.
My questions relate more to how the Online Safety and Media Regulation Act ties in with this Bill. My only question on the Bill is whether the Minister of State has an indication of how much the levy will raise to support the overheads and expenses of Coimisiún na Meán. As I understand it, this is the second levy that has been introduced to cover the overheads and expenses of Coimisiún na Meán, the new media commission. However, in the Online Safety and Media Regulation Act, as Senator Higgins points out, there is power for the media commission to introduce a levy on streaming platforms to support the production of content in Ireland and in Europe.
I understand that an coimisiún has finished its research. I spoke to members of an comisiún at the media committee last September. They informed me that work was beginning and that they expected to conclude it before the time set out by the Future of Media Commission, namely in the first half of this year. They said the research would be concluded by then. They said it would be quite significant and would set out what may come in from a levy and how it might look. They indicated that there would then be a discussion with the Minister as to whether we would be asked to design a scheme to introduce a levy. It is estimated that such a scheme could raise as much as €25 million from streaming platforms like Netflix, Disney+, Amazon Prime and others to support the production of content in Ireland. To put that in context, RTÉ funding for the independent sector in 2022 was €43 million. The capital budget for Screen Ireland in budget 2024 was €34 million. The revenue forgone to the Exchequer in increasing the section 481 tax credit was €53 million. A sum of €25 million would be significant for the industry. Has the Minister of State spoken to the Minister, Deputy Catherine Martin, about this matter?
Coimisiún na Meán completed its viability report on the content levy. I want to see that published. It would like to see it as a member of the Oireachtas joint committee who pushed for the power to introduce a content levy. The industry points out that for every year it is not introduced, €25 million is lost to the Irish audiovisual production sector. When will we see that report?
I thank all Senators for their support for the Bill. I thank Senator Higgins for the thought she has given to the digital empowerment fund. This Bill is limited to and strictly focused on funding activities at Coimisiún na Meán for enforcing the Digital Services Act and the terrorist content online regulation, which will remove a burden on the Exchequer to fund the regulatory functions for the Digital Services Act. I am not able to incorporate her idea in this Bill, given its limited focus, but I like the idea. I will ask officials to see what we can do. It segues into Senator Warfield's proposals around what is known as the European works levy. I understand Coimisiún na Meán will submit that research to the Minister, Deputy Catherine Martin, in the coming weeks and she will then be able to make decisions in relation to it. It captures exactly what the Senator described. It may be that we can incorporate some of what Senator Higgins proposed into the broader concept of what Coimisiún na Meán may or may not propose to the Minister. I will bring both Senators' proposals to her attention. I will also look at the digital empowerment fund. The Senator is right; we are focused on digital and enterprise but I also want digital to be about society and how we skill and equip society.
On how much will be raised, a good indication is that in budget 2024 we allocated €6 million to Coimisiún na Meán to support capacity building and initial operations in this space. The Department of Justice has allocated €500,000 to Coimisiún na Meán to support its functions under the terrorist content online regulation. The amount needed to ensure it is self-financed will increase as operations mature, the full effect of the regulations kicks in and the need to hire appropriately qualified staff grows. We continue to engage with Coimisiún na Meán and the digital services co-ordinator around budget asks to make sure they are robust and ensure they are properly resourced. Those engagements have always been positive. We intend for this levy to fund that size of operation. That is a baseline figure.
When is it proposed to take Committee Stage?
Next Tuesday.
Is that agreed? Agreed.
