Reports from the Heart of the Machine
Editors: Du Wei, Chen Ping
European Commission President von der Leyen: The larger the online platform, the greater the responsibility.
Not long after the March Digital Markets Act, the European Union introduced a new regulation for tech giants.
On April 23, after hours of negotiations, the European Union agreed on a broad range of provisions for the Digital Services Act (DSA). The bill would force tech companies to take greater responsibility for the content that appears on their platforms. New obligations facing tech companies include: faster removal of illegal content and merchandise, explaining to users and outside researchers how their algorithms work, and taking stricter action to spread disinformation.
Failure to comply with the regulations will result in fines of up to 6% of their annual turnover.
European Commission President von der Leyen said in a statement that the DSA will upgrade the basic rules for all online services in the EU, which makes the principle that "offline illegal content is also illegal online" practical implementation, and said that the larger the scale, the greater the responsibility of online platforms.
President of the European Commission von der Leyen.
EU Competition Commissioner Margaret Thompson, who leads much of the EU's technology regulation, Margrethe Vestager added: "DSA helps create a safe and responsible online environment. Platforms should be transparent about their content moderation decisions, prevent dangerous disinformation from spreading, and avoid offering unsafe products in the market. Under the agreement, we will ensure that the platform is responsible for the risks that its services may pose to society and citizens.
EU Internal Market Commissioner Thierry Breton further commented: "With the DSA, the era of large online platforms "relying on their own size and not caring about regulation" is coming to an end, and the DSA is setting clear and uniform obligations for platforms, and the penalties for technology companies for violations will be proportional to their size, impact and risk. The DSA empowers the European Commission to oversee very large platforms, including fines of up to 6% of global turnover for tech companies and even banning operations in the EU single market in the event of repeated serious breaches by tech companies.
Previously, the European Union published the Digital Markets Act (DMA). The DMA, on the other hand, targeted antitrust governance at Apple, Google, Meta, Amazon, and Microsoft, aiming to regulate the business practices and market dominance of the big five companies in Europe. Once silicon valley giants violate the DMA, they will face fines of up to 10% of their global annual turnover in the previous fiscal year, as well as fines of up to 20% for re-offending, and even risk being split.
Image source: eaca
The DSA should not be confused with the Digital Markets Act (DMA). The DMA, announced by the European Union in March, targets antitrust governance at Apple, Google, Meta, Amazon and Microsoft to regulate the business practices and market dominance of the big five companies in Europe. If the Silicon Valley giants violate the new rules, they will face hefty fines and even risk being broken up.
Both bills, DSA and DMA, affect the tech community, with the DMA focusing on leveling the playing field among businesses, while the DSA deals with how companies regulate content on their platforms. As a result, the DSA may have a more direct impact on Internet users.
Although the legislation applies only to EU citizens, the laws also affect the rest of the world. Global tech companies may decide to implement a single strategic control over content, benchmarked against the EU's relatively stringent regulations, which may be more cost-effective. While U.S. lawmakers are keen to rein in big tech companies through their own regulations, they have begun to look to the EU's rules for inspiration.
What are the specific contents of the DSA Bill?
The scope of application of DSA covers a variety of online intermediary services and is divided into the following categories based on role, size, and impact on the online ecosystem:
- Intermediary services for the provision of network infrastructure: Internet access providers, domain name registrars;
- Hosting services, such as cloud computing and web hosting services;
- Oversized online search engines that cover more than 10% of the EU's 450 million consumers and have a greater responsibility for curbing illegal content online;
- Online platforms that connect sellers and consumers, such as online marketplaces, app stores, collaborative economy platforms, and social platforms;
- Mega-online platforms that cover more than 10% of the EU's 450 million consumers and may pose a particular risk in spreading illegal content and social harm.
While the final text of the DSA has not yet been published, the European Parliament and the European Commission have detailed some of the businesses covered by the bill, as follows:
- Targeted ads based on religious beliefs, sexual orientation, or ethnicity are prohibited. Minors also cannot be targeted users of targeted ads;
- Deceptive or deceptive user interfaces that lead users to certain choices are prohibited— "dark patterns." The EU says that as a rule, unsubscribing should be as simple as signing up;
- Mega online platforms such as Meta (formerly Facebook) must keep their recommendations algorithms working transparently to users, such as for sorting content in news feeds or tv show recommendations on Netflix. These platforms should also offer "non-analytics-based" recommendation systems, with Instagram, for example, restoring chronological versions;
- Hosting services and online platforms must clearly explain why they remove illegal content and give users the right to appeal against such deletion. However, the DSA itself does not define what is illegal, but is left to the discretion of each country and region;
- The largest online platforms must provide key data to external researchers to "gain a deeper understanding of how online risk is evolving";
- Online marketplaces must keep basic information about traders on their platforms in order to track individuals selling illegal goods or services;
- Large platforms must also introduce new strategies to deal with misinformation during the crisis (a provision inspired by the recent Russian-Ukrainian conflict).
Like DMA, the DSA differentiates technology companies of different sizes and imposes greater obligations on larger companies. The largest companies in the EU, such as Meta and Google, with at least 45 million users, will face the toughest scrutiny. These tech companies have been lobbying to lower DSA requirements, particularly with regard to targeted advertising and the handing over of data to outside researchers.
Image source: hindustantimes
Although the broad provisions of the DSA are now agreed to by EU member states, the bill will not come into force until it is formally approved by the European Parliament and the European Commission at a later date. Once approved, the DSA will apply directly to the entire EU region and will be applicable 15 months after entry into force or from January 2024 onwards, whichever is later.
Original link:
https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2545
https://www.theverge.com/2022/4/23/23036976/eu-digital-services-act-finalized-algorithms-targeted-advertising