US: In a watershed moment for online governance, a sweeping set of digital regulations is set to reshape the landscape of the internet for major tech giants, including Google, Facebook, TikTok, and more, as they navigate a new era of stringent oversight within Europe.
The European Union is ushering in the first phase of its groundbreaking Digital Services Act (DSA), a comprehensive suite of tech-focused regulations crafted by the 27-nation bloc, renowned for its robust stance against tech behemoths. The DSA, which goes into effect this week, marks a pivotal step toward safeguarding users in the digital realm and curbing the dissemination of harmful content, encompassing both illegal material and violations of platform terms, such as the promotion of genocide or eating disorders. Moreover, it aims to preserve fundamental European rights, such as privacy and free speech.
A select group of significant online platforms has been mandated to adhere to the DSA starting this Friday. This list comprises eight social media platforms, including Facebook, TikTok, Twitter, YouTube, Instagram, LinkedIn, Pinterest, and Snapchat. Additionally, five online marketplaces, such as Amazon, Booking.com, Alibaba’s AliExpress, and Germany’s Zalando, fall under its purview. Major mobile app stores like Google Play and Apple’s App Store are subject to the regulations, as are Google’s Search and Microsoft’s Bing search engine. Even services like Google Maps and Wikipedia are encompassed.
The criteria for inclusion on this list are user-centric, with platforms boasting 45 million users or 10% of the EU population facing the most rigorous regulation. However, there have been notable omissions, including eBay, Airbnb, Netflix, and even PornHub. This list remains subject to revision, potentially encompassing other platforms in the future.
The DSA casts a wide net, extending its compliance requirements to any digital service provider catering to European users. Smaller businesses, however, face lighter obligations and a grace period of six months before full compliance is mandatory.
In response to the uncertainty surrounding these new rules, some tech giants, like Meta Platforms, the parent company of Facebook and Instagram, have delayed the launch of products, such as Threads, their Twitter competitor, in the European Union. Meanwhile, online platforms are already rolling out mechanisms for European users to flag illegal content and questionable products, which platforms are now obligated to promptly and impartially remove.
The DSA is expected to profoundly impact the digital experiences of Europeans, with Nick Clegg, Meta’s President for Global Affairs, highlighting its significance in shaping online interactions. To facilitate compliance, Meta is enhancing its existing tools for reporting illegal content. Similarly, Amazon has introduced channels for reporting suspected illegal products, offering more information about third-party merchants. TikTok has added an “additional reporting option” for users regarding illegal content and advertising. These reports will be assessed by a dedicated team of moderators and legal experts, with explanations provided to both the reporting and posting parties, and avenues for appeal.
The DSA also introduces measures to protect vulnerable groups, including children, by prohibiting targeted ads. Snapchat, for instance, is restricting the use of personalization and optimization tools for teenage users in the EU and UK, while providing more transparency and control over ads for users aged 18 and older. TikTok is making similar adjustments for users aged 13 to 17, preventing personalized ads based on their activities.
However, some companies, such as Zalando, a German online fashion retailer, have contested their inclusion on the DSA’s list of largest online platforms, arguing that they don’t pose the same systemic risks as others. Despite this, Zalando is implementing content flagging systems to comply with the DSA.
The DSA introduces substantial penalties for non-compliance, with fines potentially reaching up to 6% of a company’s global revenue, amounting to billions. However, enforcement may not immediately entail penalties for specific violations but rather focuses on assessing whether tech companies have appropriate processes in place to mitigate the harm associated with their algorithm-driven recommendation systems.
The DSA’s scope extends beyond user behavior to encompass how platforms interact with digital advertising and livestreaming systems. These platforms must identify and evaluate potential systemic risks and undergo independent audits. While the audits are key to ensuring compliance, the precise mechanisms and details of the audit process have drawn criticism for being unclear.
These changes within Europe are likely to have a global ripple effect, as digital advertising networks and social media influencers have a worldwide reach. Tech companies will face the challenge of adapting to a shifting regulatory landscape as they work to ensure compliance with the DSA’s stringent requirements.