Big Tech braces for EU Digital Services Act regulations

Reuters, August 24 in London – The comprehensive Digital Services Act (DSA) of the European Union imposes new regulations on content moderation, user privacy, and transparency, putting more than a dozen of the largest internet businesses in the world under unheard-of legal scrutiny.

From this Friday, a number of internet giants, including Meta’s (META.O) Facebook and Instagram platforms, Apple’s online App Store, and a few Google (GOOGL.O) services, will be subject to new regulations in the EU. These regulations include preventing the spread of harmful content, banning or restricting certain user-targeting techniques, and sharing some internal data with regulators and related researchers.

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With other comprehensive pieces of legislation, including the Digital Markets Act and the AI Act, on the horizon, the EU is regarded as the global leader in digital regulation. The introduction of comparable laws around the world will be influenced by how successfully the bloc implements these regulations.

Researchers have questioned whether these businesses have gone above and beyond what is required of them by the law.

Only 19 of the biggest online sites, those with more than 45 million EU users, are currently subject to the regulations. However, starting in mid-February, they will be applicable to all online sites, regardless of size.

Any company found to be in violation of the DSA faces a fine of up to 6% of its annual global revenue, and repeat offenders risk being completely barred from doing business in Europe.

Each company designated under the DSA was questioned by Reuters about the modifications they had made. Most declined to speak further or did not react at all, pointing to relevant public blog entries.

E-commerce behemoth Amazon (AMZN.O) and German fashion retailer Zalando (ZALG.DE) are the two businesses picked out for early regulation, and both are now fighting their placement on the list in court.

Platforms will likely fight tenaciously to uphold their policies, predicted Kingsley Hayes, head of data and privacy litigation at Keller Postman. “Especially when new compliance requirements infringe on their fundamental business models.”

THERMAL TESTS

The European Commission claimed that it had volunteered to run DSA “stress tests” using the 19 platforms over the previous six months.

These assessments evaluated the platforms’ capacity to “detect, address and mitigate systemic risks, such as disinformation,” according to a Commission representative.

Facebook, Instagram, Twitter, TikTok, and Snapchat are just a few of the sites that have taken part in such studies. The Commission stated that greater effort was required in each instance to get ready for the DSA.

Now that the regulations have taken effect, research from the charity Eko revealed on Thursday that Facebook was still authorizing online advertising with objectionable content.

The group requested authorisation for 13 ads that contained objectionable material, including one that called for the murder of a well-known Member of the European Parliament (MEP) and another that incited violence against immigrants.

According to Eko, Facebook rejected five of the submitted ads and accepted eight of them within a day. Before they were released, the ads were removed by the researchers, so no Facebook users saw them.

The Eko research was met with a statement from Meta that read, “This report was based on a very small sample of ads and is not representative of the number of ads we review daily across the world.”

Another group, Global Witness, asserted last year that commercials encouraging violence against the LGBT (lesbian, gay, bisexual, and transgender) community in Ireland had been authorized on Facebook, TikTok, and YouTube.

Both Meta and TikTok responded to the Global Witness study by stating that hate speech has no place on their platforms and that they routinely examine and enhance their policies. Requests for comment from Google were not answered.

DANGEROUS BUSINESS

Amazon and Zalando have contested their position on the list, despite the fact that none of the designated corporations have declared they will disregard the DSA.

The second-highest court in Europe, the General Court in Luxembourg, received a legal complaint from Amazon in July, complaining that stronger competitors in these nations had not been named.

As part of their DSA compliance effort, it has still added a number of new features, such as a new way for users to report inaccurate product information.

Similar legal action was taken by the fashion retailer Zalando, which claimed that because just 31 million of its monthly active users made purchases from outside vendors through its platform, it did not meet the 45 million user requirement.

If any of the selected companies had “skirted their legal responsibilities,” according to Hayes, it would soon be clear. It will be difficult for any platform with a huge user base to iron out these duties.

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