One of the key elements of this focus on digitalisation is the Digital Finance Package issued by the European Commission in September last year. Digitalisation is now a prominent feature of financial services in the EU, which brings with it new risks and challenges. The ultimate aim of this package is to support the digital transformation, including reducing fragmentation in the single market and eliminating barriers which effectively prevent consumers from accessing financial services across borders.
Within this package, the Digital Finance Strategy is most noteworthy for the leasing and automotive rental sector. It aims to make financial services in the EU more “digital friendly”, and to foster innovation and competition among financial services providers in the EU, something EU legislators have perceived to be lacking for a number of years. It includes a proposal for interoperable digital identity solutions, which would make it far easier for a customer to access cross-border financial services (including leasing), as well as a proposal on a new regulatory framework for AI. Notably, the package also includes a review of AML rules (which would impact how financial services providers can authenticate a customers’ identity), and the EBA has been tasked with ensuring greater harmonization between Member States’ rules on the identification and verification process for digital onboarding of new customers. This increased harmonization could, for example, change the requirements for how car rental companies verify customers’ information when they are booking a vehicle online.
As the name suggests, the “Data Governance Act” (Proposal for a Regulation on Data Governance) is aimed at improving the availability of data in the EU, primarily by fostering trust in data intermediaries and by improving data sharing both across the EU and between different sectors. The Act essentially sets out the following:
- The conditions under which certain categories of data can be re-used by public sector bodies
- A framework for the notification and supervision of data sharing services
- A framework for voluntary registration of entities that collect and process data for altruistic purposes
Data sharing and accessibility is of particular importance for our industry. Original equipment manufacturers (OEMs), including car manufacturers, currently hold the vast majority of in-vehicle data, and this lack of data access prevents leasing and automotive rental companies from offering the most efficient service possible to customers. The proposed regulation includes an obligation for intermediaries (those that hold the data) to ensure that the data is interoperable, and to prevent abusive practices in relation to data access. The European Commission is currently consulting the public on this proposed Act and Leaseurope’s response will highlight our support for improving the availability of data in the EU, and the benefits this will offer for consumers.
In our previous newsletter edition, there was an article on the proposed Digital Service Act (DSA) which aims to address various issues related to online platforms. At the end of last year, the European Commission published its final version of this new regulation, which will now be debated by the European Parliament and Member States.
The DSA is characterized by three actions: more safety for users, increasing transparency of platforms and better enforcement. The proposal maintains the liability rules set out in the e-Commerce Directive, sets out basic obligations applicable to all providers of intermediary services, and imposes a higher level of responsibility for very large platforms (e.g. mandatory codes of conduct, appointment of compliance officers, redress actions for non-compliance). Leaseurope has long been advocating for clearer consumer information and liabilities, particularly when it comes to vehicle rental offers hosted by online platforms. We are pleased that the European Commission now recognises the liability of online platforms in cases of disinformation, particularly when a consumer is led to believe that “the information, or the product or service that is the object of the transaction, is provided either by the online platform itself or by a recipient of the service who is acting under its authority or control”.
Together with the DSA, the European Commission also published the Digital Markets Act (DMA), which applies specifically to so-called “gatekeepers” (a role defined by the platform’s size, role they play and durability in the market). The DMA complements the existing P2B regulation and is of particular interest for our industry since it tackles “core platform services”, including online marketplaces, app stores and online intermediation services in sectors like mobility, transport or energy. A key achievement for Leaseurope and its members concerns the use of data generated by leasing and rental companies when hosted within an online platform or marketplace. ‘Gatekeeper’ platforms are no longer allowed to use data collected from businesses they host when competing against them, they will have to create data silos that allow for separation. Business users will also be allowed to access their own data within these silos. Further measures are foreseen for interoperability and self-preferencing. Consequences of non-compliance include fines of up to 10% of the company’s total worldwide annual turnover and periodic penalty payments of up to 5% of the average daily turnover.