Tech support

EU reaches consensus on Digital Services Act

This is a major development that could alter the entire social media landscape. No, not Elon Musk and Twitter; the European Union’s latest attempt to “tame” Big Tech with its Digital Services Act (DSA).

The law, which all the “usual suspects” had lobbied frantically against, found consensus in the European Parliament and EU member states over the weekend. According to Margrethe Vestager, executive vice-president of a Europe fit for the digital age, it took 16 hours of discussions and “a lot of sweet things”, but it was worth it:

European Commission President Ursula von der Leyen said:

Today’s agreement on the Digital Services Act is historic, both in terms of speed and substance. The DSA will update the ground rules for all online services in the EU. It will ensure that the online environment remains a safe space, preserving freedom of expression and opportunities for digital businesses. 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. Today’s agreement – which complements the political agreement on the Digital Markets Act last month – sends a strong signal: to all Europeans, to all EU businesses and to our international counterparts.

So what’s in it?

Now that the law has received political approval, it still has to go through the European Parliament and the Council, but in reality it is as good as a done deal can get. So who does this impact? There are several key targets:

  • Intermediation services offering a network infrastructure: Internet service providers, domain name registrars.
  • Hosting services, such as cloud computing providers and web hosting services.
  • Online platforms bringing sellers and consumers together, including online marketplaces, app stores, sharing economy platforms and social media platforms.
  • Very large online platforms, which will have specific rules for those reaching more than 10% of the 450 million consumers in Europe. Micro and small businesses with less than 45 million monthly active users in the EU will be exempt from some of the new obligations

DSA rules include:

Prohibit advertising aimed at children or based on sensitive information such as religion, gender, race or political beliefs.

The removal, at the request of the government, of illegal content that supports terrorism, child sexual abuse, hate speech and commercial fraud.

Enable social media users to report illegal content in a “simple and effective” way so that it can be removed quickly.

Social media platforms should ban users who repeatedly post illegal content.

Platforms will also need to be transparent and ensure that their algorithms and AI tools are auditable by regulators.

For non-EU organizations the law will bring new responsibilities/burdens – delete as appropriate. According to the Commission:

[The rules] apply in the EU single market, without discrimination, including to online intermediaries established outside the European Union who offer their services in the single market. When they are not established in the EU, they will have to appoint a legal representative, as many companies already do as part of their obligations in other legal instruments. At the same time, online intermediaries will also benefit from legal clarity of liability waivers and a single set of rules when providing their services in the EU.

In practice, this means that offenders risk fines of up to 6% of global turnover, with an ultimate penalty for multiple breaches or a ban on doing business within the EU.

If everything goes according to plan, the Digital Services Act will be applied from 2024.

my catch

As always on these matters, no one will be entirely satisfied with what has been agreed here. On the one hand, there will be those who argue that the law does not go far enough in cracking down on Big Tech, while on the other extreme, free speech and digital rights activists will complain that ‘it restricts freedom of expression, etc.’

It is therefore a compromise that is on the table, even if it apparently has enough teeth to be considered a failure for Silicon Valley lobbying in Brussels. The test will come when those teeth are used to bite, of course. The Commission has shown its willingness to be tough in enforcing fines against tech companies – 8.2 billion euros in fines against Google to date. It remains to be seen who will be the first to put the DSA to the test. But as Amnesty International noted in a statement:

It is now crucial that the DSA is rigorously enforced so that it does not turn into a mere paper tiger. It’s also vital that other jurisdictions around the world follow suit and enact strong laws to further protect people from harm caused by Big Tech’s surveillance-based business models.

It remains to be seen whether this last point will be realized. Some US political figures endorsed the law:

But at the same time, those on the right who have spent the last 24 hours convincing themselves that Elon Musk is the savior of free speech are unlikely to welcome even more regulatory burdens imposed by arrogant Europeans. And Big Tech lobbyists will shift gears to focus on stopping other countries from adopting similar rules. Google released a bland “we’ll work with policymakers” on the new regulations. Meta, Amazon et al remain conspicuously/disturbingly silent.