The EU Commision has reached a consensus among its members; Big Tech’s best kept secret for seeking and retaining user’s attention can no longer be obfuscated. New legislation will require tech companies provide transparency on the workings of their algorithms, among other obligations aimed to protect internet users. Once introduced, it will have far reaching effects beyond the European continent.

The recently agreed upon standards are part of a broader piece of legislation known as the Digital Services Act (DSA) and were proposed back in December 2020. At its core, the DSA is meant to protect and promote a safe and accountable online environment, addressing the growing criticisms levied at big tech companies. These changes include requiring a stop on targeted advertising, visibility of how each service’s algorithms work and provision of data points to researchers to provide an insight on how online risks evolve over time.

What Will Change

The EU Commission has detailed a number of obligations that comprise a ‘new framework for digital services’. Highlights include:

  • Large platforms are required to introduce procedures to ensure faster removal of illegal content and do more to curb its dissemination.
  • Transparency measures are required for online platforms which surface the inner workings of algorithms used to recommend content to users.
  • A ban on certain types or targeted advertising (specifically targeting a user’s personal data, including political views or sexual orientation).
  • Additional limits will be introduced for the protection of minors relating to targeted advertising.
  • Search engines and large online platforms must undergo independent audits of their risk management systems to ensure safeguards are in place pertaining to the misuse of their services.
  • Participation in ‘codes of practice’ to ensure risk mitigation.

Users will also be provided with additional rights under the new legislation. These include obligations that will empower consumers, including:

  • The ability to contest removal of content by platforms.
  • A mitigation process to assess and address viral spreading of harmful and illegal content.
  • Transparent terms and conditions across platforms.
  • Access to dispute resolution mechanisms in each country.
  • Clear information as to why content is being recommended to users.

It will ensure that the online environment remains a safe space. What is illegal offline, should be illegal online.

European Commission President Ursula von der Leyen

Who Needs To Comply

In short, if you want to conduct digital business in the EU, or are a user of an online service, you will be impacted by the DSA. The scope is also extended to include online marketplaces, app stores, social media platforms and collaborative economy platforms.

For service providers the requirements will be fit to size, and are proportionate to the scale of the platforms that are being targeted. The greater the size, the larger the obligations. Companies with a market share greater than 10% of the estimated 450 million internet users in the EU are at the top of the list. This means that companies such as Google, Meta, TikTok and Amazon qualify as very large platforms under the proposed legislation.

A failure to comply would result in heavy fines, to the tune of 6% of a company’s annual turnover in the preceding year. At the high end, that figure would be in the billions.

Looking Forward

In a press release, European Commission President Ursula von der Leyen spoke to the mission of the DSA, stating that “It will ensure that the online environment remains a safe space, safeguarding freedom of expression and opportunities for digital businesses. It gives practical effect to the principle that what is illegal offline, should be illegal online.”

Though ambitious, this legislation is potentially game changing, due in part to its broad scope and focus on addressing a ‘wish list’ of the top societal issues brought about by a technological that is insufficiently regulated. If successful, the DSA will force big tech to radically re-think how it advertises its services and operates its platforms.