European Union adopts landmark big tech rules

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Person wearing a Mark Zuckerberg mask in front of the EU flag

In a final vote, the European Parliament decided to adopt both the Digital Services Act (DSA) and Digital Markets Act (DMA) tuesday. The two related pieces of legislation aim to address some of the key emerging issues facing internet and social media companies. The DSA focuses on making online content moderation more efficient and transparent, while the DMA focuses on combating anti-competitive business practices.

“For too long, tech giants have profited from an absence of rules. The digital world has transformed into a Wild West, with the biggest and strongest setting the rules,” said Christel Schaldemose, member of the Danish Parliament, in A press release. “But there’s a new sheriff in town.” Both packages of laws were passed by huge majorities: the vote tally for the DMA was 588 for, 11 against and 31 abstentions. The number of DSAs was 539 for, 54 against and 30 abstentions.

Not all tech companies fall under the new legislation. AMD will target businesses valued at more than 75 billion euros (about 77 billion dollars), or with an annual gross income of more than 7.6 billion euros. To qualify as a ‘gatekeeper’, a company’s services will also need to have at least 45 million monthly users in the European Union and 10,000 annual business users. Companies that meet these requirements include Apple, Google, Meta, Amazon and Alibaba, the China-based online mega-retailer.

These companies and others that are big enough to be called “gatekeepers” will be prohibited to prefer or impose their own services on their hardware (eg Safari as the default browser on iPhones). All pre-installed software should be uninstallable. Things like messaging will need to have interoperability compatibility on different platforms (ex: more iMessage exclusive features). Additionally, the DMA limits the extent to which companies can track users for advertising purposes without explicit consent. The ultimate aim of these laws is to “ensure a fairer trading environment and more services for consumers”, according to the Parliament’s press release.

The DSA is broader and covers intermediary services such as Internet access providers, web hosting services, online platforms and very large online platforms (which reach more than 10% of the EU population). EU) – although different sets of regulations will apply to each category.

All categories of businesses, for example, will have to meet new requirements in terms of transparency and accountability. However, only very large online platforms will have to allow users to opt out of advertising and content recommendation algorithms based on “profiling” that take into account categories such as race, political opinion or religion. . Together, the DSA set of laws aims to tackle illegal and misleading content posted online, increase the effectiveness of moderating that content, and make companies more accountable for how their platforms are used.

If they violate the DMA, companies will be subject to fines of up to 10% of their annual gross revenue, or up to 6% for violations of the DSA.

DMA will come into effect in early 2023. And for the biggest online platforms and search engines, so will DSA. However, small businesses will have a bit more time to comply with the Services Act. For them, the DSA will start either 15 months after its entry into the Official Journal of the EU or in January 2024 (whichever is later). The legislation took years to develop. The European Commission first proposed DSA and DMA in December 2020. And big tech companies have been on their toes ever since, releasing public statements denouncing certain aspects of the new laws.

Yet the enforcement potential of the two sweeping laws remains a key question mark. The EU has already passed big tech legislation like the 2018 one General Data Protection Regulation, which ended up failing in part because the app was disorganized and diffuse. In theory, with DSA and DMA, the application is supposed to be more centralized – the European Commission itself will be responsible through tasks Fbodies and committees. However, some are still not convinced that the Commission is setting aside enough resources.

“We sounded the alarm last week with other civil society groups that if the Commission does not hire the experts it needs to monitor Big Tech practices in the market, legislation could be crippled by an ineffective application,” said the deputy managing director of The European Consumer. Organizationation, Ursula Pachl, told Reuters in a report. Time will tell if Europe’s new approach to big tech can actually to bring about big changes.

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