On September 9, the Law of the Republic of Kazakhstan “On Online Platforms and Online Advertising” dated July 10, 2023 (hereinafter referred to as “Law"). The law was actively discussed in the media and social media, and received the unofficial name “law on bloggers.” At the same time, it has, rather, an indirect relation to the regulation of the activities of bloggers, and the main purpose of its adoption was to regulate public relations arising in connection with the activities of online platforms in the territory of the Republic of Kazakhstan.

The law is not unique. Attempts to regulate the activities of online platforms have been made all over the world since the mid-90s, that is, long before their current rapid development. Legislation regulating the activities of online platforms is in force in the European Union. Literally on September 20 of this year, a law developed with similar goals was adopted in the UK. Analyzing similar legislation in other countries, we can identify two common approaches to regulating the activities of online platforms, which directly affect their development.

It is these approaches, which of them were applied in Kazakhstan, and what consequences the adoption of the Law entails for Kazakh and foreign companies that we want to talk about in general terms in this review.

Regulating the activities of online platforms – approaches in global practice

Historically, two approaches to regulating the activities of online platforms have been developed - American and European. The goal of both approaches was to create a regime that supported the development of online platforms and defined the boundaries of their responsibilities. However, these approaches were implemented in different ways, which led to important practical consequences for the development of online platforms that we can see today.

The American approach was based on the concept of “information superhighway”, which, among other things, assumed the maximum limitation of liability of online platforms (or, in a broader sense, all online resources that provide the ability to produce, post, store and perform other actions with content) for the actions of third parties. This rule was formulated in section 230 of a document called the Communications Decency Act, and translated from English it states that “no provider or user of interactive computer services shall be treated as a person publishing or voicing any information provided by another content provider.” In other words, the online platform is not responsible for the content created by its users. Of course, this rule has always been subject to a number of reasonable restrictions related, for example, to violations of intellectual property rights, protection of children's rights, and so on.

In Europe, with the same goals, a different approach was applied, which was based on the concept of “information society”, or “information society”. It was formulated in 2000 in a document called the E-Commerce Directive. According to this document, all online resources for which the limitation of liability was applied were divided into three types, from which, from a practical point of view, it is necessary to distinguish hosting platforms, that is, those platforms that provide resources for posting information on a server that constantly has access to the network. They are important because online platforms such as social networks, marketplaces, games, and other platforms on which content can be shared (for example, YouTube) are, from the point of view of the E-Commerce Directive, hosting platforms.

As we can see, the European Union initially set a course for more detailed regulation of the activities of online resources. This immediately affected their development. In the United States, Section 230 is informally known as “The 26 Words That Shaped the Modern Internet.” The very liberal approach to regulating the liability of online resources used in the United States, among other things, has led to the fact that the vast majority of the world’s currently leading online resources, including social networks such as Facebook, Instagram and Twitter, Amazon and eBay marketplaces, and content sharing platforms, including Youtube, originate from the United States.

Of course, since the first rules were adopted, the situation has changed significantly. The rapid development of online platforms has also led to a significant increase in the risks associated with their activities, including violation of the security of personal information, aggressive online advertising and online targeting based on user preferences; violation of children's rights and online bullying; radicalism and threat to stability; violation of intellectual property rights, and so on. In the absence of regulation and limited liability, these risks pose a serious threat to the stability of society and human rights.

Both Europe and the United States tried to solve these problems in different ways. In the United States, there have been several legislative initiatives designed to strengthen the responsibility of online platforms and limit the role of Section 230 of the Communications Decency Act, which have not yet been formalized in their final form. For the purposes of our analysis, we are more interested in the approach that was applied in Europe. In 2022, as a result of many years of work, the European Parliament adopted a document called the Digital Services Act (hereinafter referred to as “DSA"), which, developing the logic of the E-Commerce Directive, took the path of detailed regulation of the activities of online platforms. While maintaining a focus on hosting services, the DSA divides them into two types - online platforms (social networks, marketplaces, etc.) and search engines (Google, etc.).

Article 3 of the DSA defines online platforms as “hosting services which,at the request of the service recipient, store and disseminate information publicly.” The wording “at the request of the recipient of services” is emphasized here for a reason. The logic of the DSA developers was that even if this document provides for increased responsibility for certain types of online platforms, it assumes that all their activities are carried out only at the request of the user. The focus of responsibility here is on the user, the author of illegal content, and not on the platform. This is a fundamentally important question, to which we will return later.

With regard to the liability of online platforms, the general principle provided for in Article 5 specifies that in the case of the provision of information services that consist of storing information provided by the recipient of the service, the platform providing the service shall not be liable for such information, provided that such platform did not have knowledge of illegal activities or illegal content, and when such information became available, the platform acted promptly to remove it or restrict access to such content. Here again we must emphasize that the DSA assumes that the primary responsibility lies not with the platform, but with the content author.

As a follow-up to this comment, it should be noted that neither the E-Commerce Directive nor the DSA impose a general obligation on online platforms to monitor all user-generated content. Their obligations, which are listed in more detail below, must allow users to file complaints about such content, and oblige the platform to respond to and take action on such complaints - but do not oblige them to monitor all content for illegal content. Such a requirement would be unrealizable from a practical point of view, and would significantly limit the speed and functionality of online platforms.

At the same time, a number of obligations are still provided for digital services:

All digital services must identify a contact person and an official representative. They must provide all users with information about all of their moderation policies, including those implemented by algorithms. In addition, they have annual reporting obligations;
Hosting service providers, in addition to the above, must use mechanisms to report illegal activity, and remove or limit access to illegal content based on the results of reviewing such notifications;
Online platforms, as a subset of hosting services, in addition to everything listed above, must use mechanisms to limit access to platform services for those users who violate the rules and regularly publish illegal content. They should also use an interface that allows users to make informed decisions (here we can recall the notification used by the Facebook platform with a link to official resources about COVID-19, which automatically appears under all posts mentioning the virus). Online platforms also have an important obligation to clearly identify online advertising, including providing users with information about the mechanisms by which they see certain advertising in their feed;
The DSA also introduces the term “very large online-platforms”, or “very large online platforms”, the number of users of which exceeds 45 million people. The use of this figure has a completely justified logical explanation - it is 10% of the population of the European Union. Such platforms must, in addition to the above, use risk assessment and mitigation systems and limit the operation of recommendation systems used for online advertising.

As we can see from the analysis above, the development of the DSA took a multi-level approach based on the difference between the types of digital services (including online platforms) and the risks associated with their operation. And even though the obligations for online platforms have been significantly tightened compared to the regulation applied in the US and EU before the development of the DSA, this document is still based on the principle of primary responsibility of the user - the author of the content, and does not imply a general obligation for the platform to monitor all content.

Online Platforms Law – Approach and Implications

It is no coincidence that we have devoted a significant part of this material to introducing the basic principles of DSA. Commenting on the adoption of the Law, the Minister of Information and Public Accord of the Republic of Kazakhstan in July 2023 stated that the model on which the developers of the Law relied was precisely this document. Thus, when determining the approach to regulating the activities of online platforms, Kazakh legislators chose as a model the European approach, which is distinguished by more stringent and detailed regulation of liability, and which significantly limits the development of online platforms.

However, instead of the detailed multi-layered regulation that the DSA provides, the law offers a kind of universal approach to all online platforms, which is largely independent of their size and the functions they perform.

Definition of an online platform

Subparagraph 10) of Article 1 of the Law defines the online platform as “Internet resourceand/orsoftwareoperating on the Internet, and (or) instant messaging service, intended for receiving, producing and (or) posting, and (or) distributing, and (or) storing content on an online platform by the user of the online platform through an account created by him, a public community.” The subclause contains a clause stating that online platforms are not resources intended for the provision of financial services and e-commerce, which (in our opinion, intentionally) excludes bank applications and marketplaces from the law.

When analyzing this definition, there are two practical aspects to consider.

Firstly, it is not based on the differentiated approach that is used in DSA. The same requirements are provided for online platforms and search services, which have fundamentally different functionality. For Kazakh and foreign online platforms. For small platforms and large platforms. The only manifestation of a differentiated approach is provided for in Article 9 of the Law, and relates only to the appointment of legal representatives for platforms with an average daily access of one hundred thousand users or more. We will dwell on this requirement separately below. All other requirements for the activities of online platforms provided for by the Law (mechanisms for determining the number of users, mechanisms for filing complaints, content moderation systems) apply to all platforms without exception.

This, in our opinion, creates certain barriers to the creation of our own online platforms in Kazakhstan. The largest foreign platforms comply with the requirements provided for by the Law regardless of it simply because they are subject to regulation by the DSA, and for their activities the Law represents a simple (and not entirely consistent) duplication of such requirements at the local level. But Kazakh online platforms will require large initial investments to meet these requirements, which will limit their development potential. It would make sense, following the logic of the DSA, to provide a differentiated approach for Kazakh and foreign online platforms, and both the place of registration and the number of users could be selected as a criterion.

Returning to the requirement of Article 9 of the Law that platforms with an average daily access of one hundred thousand users must appoint a legal representative, it should be noted that this requirement was introduced not to differentiate platforms by level of responsibility similar to the DSA, but simply to oblige large foreign platforms (Facebook, TikTok, Telegram) to have a contact person in Kazakhstan. At the same time, in our opinion, the figure of one hundred thousand users does not correlate in any way with the number of visitors to the most popular platforms (millions of users per day), nor with the population of Kazakhstan, and in the context of the application of the Law has no practical meaning.

Responsibility of online platforms

There is one more important point to make when analyzing the definition of an online platform. If the DSA, as we noted above, focuses on the user and determines that hosting services provide services at the user’s request, then in the Law, in our opinion, the focus of responsibility is shifted from the user to the platform, since it states that the platform is intended for a number of actions by the user through the account he created. The DSA makes clear reference to the user's action by which he creates content - a request, and it is this request that is the basis for the user's responsibility. There is no such reference in the Law. In practical terms, this means that the focus of responsibility for identifying risks and removing illegal content has shifted from the user to the platform. It is the platform that must perform these functions.

This logic can be traced in Article 9.4 of the Law. It provides for the obligation of the online platform to “take measures to counter the spread of illegal content on the territory of the Republic of Kazakhstan.” What exactly these measures are and what results such measures should lead to, the Law does not specify. In essence, the provision of Article 9.4 implies the very general obligation of an online platform to monitor all content, which even such a strict and detailed document as the DSA took great pains to avoid.

Combined with the change in the focus of responsibility from the user to the platform, which we discussed above, this makes it possible to restrict the activities of online platforms on the territory of Kazakhstan by an authorized body under Article 24 of the Law, or to suspend their activities by the Prosecutor General’s Office in accordance with the requirements of the Law “On Communications” in the event that users post any illegal content that was not detected by the platform in time. Such detection is physically impossible even at the current level of development of the functionality of online platforms, and this approach has been abandoned almost everywhere, except in jurisdictions that historically have strict moderation mechanisms for almost all content (for example, the People's Republic of China).

As a result, such an obligation, firstly, imposes on the platforms completely unusual functions and severely limits their development, and secondly, exposes them to the constant risk of restricting their activities on the territory of our country, and in circumstances that the online platform has no control over.

Definition of "blogger"

In general, the Law includes a number of provisions that are unusual for legislation of this kind in world practice. The legislator, in our opinion, generally took a rather unconventional path, and instead of regulating the activities of online platforms in more detail, the Law made an attempt to regulate those social relations that are associated with content creators and the types of content created. Thus, the Law includes a new concept for the legislation of Kazakhstan – “influencer (blogger)”.

In subparagraph 6) of Article 1 of the Law, an influencer (blogger) is defined as “a user of an online platform who publishes information on an online platform addressed to an indefinite number of persons for business purposes.” Thus, the Law equates bloggers with entrepreneurs, and blogging becomes a form of entrepreneurship. When using this term, the Law, designed to regulate relevant public relations, ignores two groups of users of online platforms - bloggers who are not entrepreneurs and do not derive income from their activities, and entrepreneurs who are users of online platforms but are not bloggers.

This has important practical implications. As a result of the application of this formulation, the activities of all bloggers, regardless of whether they receive income from their activities or not, should be subject to regulation by the Entrepreneurial Code of the Republic of Kazakhstan. On the other hand, now entrepreneurs who do not engage in blogging activities, but use online platforms (for example, social networks) in their work, will be bloggers. For example, if we follow the definition given in the Law, an online store of children's goods will be a blogger (influencer), since: a) it publishes information addressed to an indefinite number of people and b) it does this for business purposes.

The term “influencer (blogger)” in its current form does not reflect the diversity of social relations that the Law called for regulating, and needs significant adjustment. In our opinion, its inclusion in the text of the Law was caused by an attempt to solve problems that, in principle, do not relate to the regulation of the activities of online platforms.

Summarizing the above, we can say that the law represents the first attempt of its kind to regulate the activities of online platforms in Kazakhstan. Such legislation in itself is obviously necessary and, as we noted above, exists in many countries around the world. However, the Law, in our opinion, needs significant improvement - both at the level of approach and at the level of applied solutions:

Similar to DSA, a differentiated approach to different online platforms is needed, taking into account real market conditions;
In terms of regulating the activities of an online platform, it is necessary to shift the focus from the platform to the user, as well as eliminate the obligations for the platform to monitor all content, since they are not feasible in practice;
It is necessary either to move away from the attempt to regulate in the Law the relations associated with the types of users of online platforms and the content they create, or to detail the appropriate regulation, taking into account the diversity of social relations that exist in the regulated area.

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