Google, Meta and others will have to explain their algorithms under new EU law

The EU has agreed on another ambitious bill to control the online world.

Early Saturday morning after hours of negotiations, the bloc agreed on broad terms for the Digital Services Act, or DSA, which will force tech companies to take greater responsibility for content that appears on their platforms. The new obligations include removing illegal content and assets more quickly, explaining to users and researchers how their algorithms work, and taking stronger measures against the spread of misinformation. Companies face fines of up to six percent of their annual turnover for non-compliance.

“The DSA will update the ground rules for all online services in the EU,” European Commission President Ursula von der Leyen said in a statement. “It gives practical effect to the principle that what is illegal offline should be illegal online. The larger the size, the greater the responsibilities of online platforms.

Margrethe Vestager, the EU competition commissioner who has led much of the bloc’s tech regulation, said the law “would ensure that platforms are held accountable for the risks their services can pose to society and citizens”. .

The DSA should not be confused with the DMA or Digital Markets Act, which was passed in March. Both laws affect the tech world, but the DMA focuses on creating a level playing field between companies, while the DSA deals with how companies control content on their platforms. The DSA will therefore probably have a more immediate impact on Internet users.

Although the legislation only applies to EU citizens, the effect of these laws will certainly be felt in other parts of the world as well. Global technology companies may decide that it is more cost-effective to implement a one-size-fits-all strategy to control content and take relatively strict EU regulations as a benchmark. While US lawmakers keen to rein in Big Tech with their own regulations have already begun to take inspiration from EU rules.

The final text of the DSA has not yet been published, but the European Parliament and the European Commission have detailed a number of obligations that it will contain:

  • Targeted advertising based on an individual’s religion, sexual orientation or ethnic origin is prohibited. Minors may not be the subject of targeted advertising either.
  • “Dark patterns” – confusing or misleading user interfaces designed to trick users into making certain choices – will be banned. The EU says that as a general rule, canceling subscriptions should be as easy as signing up.
  • Big online platforms like Facebook will have to make the operation of their recommendation algorithms (for example used to sort content on the News Feed or suggest TV shows on Netflix) transparent to users. Users should also be offered a “non-profiling based” recommendation system. In the case of Instagram, for example, that would mean a timeline feed (as it was introduced recently).
  • Hosting services and online platforms will need to clearly explain why they removed illegal content, as well as give users the opportunity to appeal such removals. The DSA itself does not define what content is illegal, however, and leaves that to each country.
  • The biggest online platforms will have to provide key data to researchers to “better understand the evolution of online risks”.
  • Online marketplaces need to maintain basic merchant information on their platform to track individuals selling illegal goods or services.
  • Major platforms will also have to introduce new strategies to deal with disinformation during crises (a provision inspired by the recent invasion of Ukraine).

The DSA, like the DMA, will distinguish between technology companies of different sizes, imposing greater obligations on larger companies. The biggest company – those with at least 45 million users in the EU, such as Meta and Google – will be the most closely watched. These tech companies have lobbied to water down the DSA’s requirements, particularly those around targeted advertising and the transmission of data to outside researchers.

Although the general terms of the DSA have now been agreed by EU member states, the legal language has yet to be finalized and the act formally voted on. This last step is however considered a formality at this stage. The rules will apply to all businesses 15 months after the law is passed, or from January 1, 2024, whichever is later.

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