The European Union Court of Justice (ECJ) ruled that the 2021 Austrian law regulating communication platforms is non-binding for companies based in other countries. This decision came following a preliminary ruling request by the Supreme Administrative Court of the Republic of Austria (Verwaltungsgerichtshof) to understand if the said legislation, aimed at domestic and foreign communications platform providers alike, contravened with the EU directive on electronic commerce.
The Communication Platforms Act 2021 came under challenge by Google, Meta, and TikTok, primarily established in Ireland, in Austrian courts in June 2022. This law sought to regulate practices of all providers that turn a profit through communication platforms. It embodied measures to protect the users of such platforms, although exceptions were made based on factors such as profit margins and national user base.
However, in light of the decision by the EU Court of Justice, it was accentuated that these platforms are subject to laws in the country they are established in, in this case, Ireland. The court held that permitting a member state to restrict foreign services would jeopardize core EU principles such as mutual recognition, mutual trust, and the preservation of the internal market.
The verdict comes on the heels of the implementation of the EU Digital Services Act (DSA), which enforced on November 16, 2022. The package was introduced with two objectives: protecting the fundamental rights of all digital service users and establishing a level playing field to encourage growth, innovation, and competitiveness in the European Single Market and beyond.