Commercial entities that intentionally distribute (often lucrative) illegal and harmful services or content tend to hide their true identity when signing up for a service. In spite of the E-Commerce Directive establishing general information requirements for service providers, they continue to provide fake company names, fake addresses and contact details and operate in complete anonymity.

It stands for “Know your business customer” (KYBC) obligations: a real and tangible solution to reduce illegal content with minimal burdens on intermediaries and legitimate businesses. KYBC obligations impose minimal or no burdens on legitimate businesses, all of which are easily identifiable. Making a defined set of intermediaries responsible for collecting data to confirm the identity of entities with whom they are directly contracting – and verifying that data – should be easy to implement as part of the sign-up process and subsequent periodic re-verifications. In the event that the identification data proves to be false, misleading or otherwise invalid, the intermediary will have to stop providing their services to the respective customer.

Because it is a crucial step in order to protect European consumers and businesses from online harm. The absence of an obligation for service providers to verify the identity of their business customers, and the resulting anonymity, make it exceedingly difficult to bring civil or criminal actions to stop online harms.

The European Commission has shown interest in solving this problem in its pre-legislative texts on the Digital Services Act. However, we are concerned it has so far only mentioned KYBC obligations in the context of online marketplaces. Such a limited approach would be a missed opportunity to address the broad range of illegal content online. Now is time to act.

KYBC obligations are an ideal tool to give Article 5 of the E-Commerce Directive greater effect. Requiring commercial entities to reveal their true identity on the internet would automatically reduce illegal content online and would greatly facilitate consumers’ and business customers’ efforts to seek redress.

We propose that KYBC obligations should be applicable not just to marketplaces, but to the full range of services that enable the possibility of operating an information society service covered by Article 5 of the E-Commerce Directive. These would include, for example, business applications of hosting and CDN services, payment services, domain name services, advertising services, and proxy services.