The EU Plans to Impose Unprecedented Restrictions on Tech Giants

The European Council and the European Parliament reached a provisional political agreement on the Digital Services Act (DSA), which aims to combat the online publication of unlawful content. The DSA sets out strict and unprecedented rules on policing online content, effectively ending the era of self-regulation of content by online platforms.

The DSA will apply to all companies providing online services in the EU. This includes, of course, tech and e-commerce giants like Meta, Google, Twitter, and Amazon. The scope of obligations will vary based on the nature of the services provided and the number of their users. Businesses with less than 45 million monthly active users will be exempt from certain obligations. Violations of the DSA may result in mega-fines of up to 6% of the company’s global revenues.

Among others, the DSA would impose the following obligations:

  • Online marketplaces will be required to collect and display information on all products and services sold on their platforms to ensure that consumers are properly informed.
  • Very Large Online Platforms (VLOPs) and Very Large Online Search Engines (VLOSEs) – who have more than 45 million monthly active users – will be required to perform an annual risk analysis. In addition, VLOPs and VLOSEs will be required to continuously monitor content in order to reduce risks associated with the dissemination of unlawful content, manipulation of services, and their effects on fundamental rights, public security, democratic processes, users’ health and well-being, and gender-motivated and race-motivated violence.
  • Platforms accessible to minors will have to implement special protection measures to ensure safety. They will be prohibited from using minors’ personal data for targeted advertising purposes.
  • Platforms are prohibited from using “dark patterns” which can manipulate users, or any other practices aimed at misleading users.
  • VLOPs and VLOSEs using recommendations systems (which recommend to users content they may be interested in), will be required to offer recommendations that are not based on user profiling.

The most recent provision added to the DSA states that in times of crisis, the activities of VLOPs and VLOSEs will be subject to a crisis response mechanism operated by the European Union Commission. The mechanism will allow the EU Commission to assess and prevent the risks of information manipulation and harm to users’ fundamental rights. According to the European Council, this provision was added “in the context of the Russian aggression in Ukraine”.

CLICK HERE to read the European Union Council’s press release on the Digital Services Act.