EU Digital Services Act Triggers Legal Scrutiny for Tech Giants
A new era of legal scrutiny has dawned for over a dozen major tech companies as the European Union's comprehensive Digital Services Act (DSA) imposes stringent regulations on content moderation, user privacy, and transparency.
Beginning this Friday, internet giants including Meta's Facebook and Instagram, Apple's online App Store, and select Google services will be bound by new obligations within the EU. These mandates include curbing the spread of harmful content, restricting specific user-targeting practices, and sharing certain internal data with regulators and affiliated researchers. The EU's pioneering role in tech regulation could set a precedent for global adoption of similar rules.
Despite these regulations, concerns have arisen regarding whether these companies have adequately met legislative expectations. Presently, the DSA only applies to the 19 largest online platforms with over 45 million users in the EU.
However, starting mid-February, the rules will encompass various online platforms irrespective of their size. Any violation of the DSA can result in fines of up to 6% of the company's global turnover, with repeat offenders potentially facing Europe-wide bans.
Among the firms subject to the DSA, Amazon and German fashion retailer Zalando are disputing their inclusion in court. Legal experts predict platforms may vigorously defend their practices, particularly if compliance rules impinge on core business models.
Over recent months, the European Commission has conducted "stress tests" with the designated 19 platforms to evaluate their ability to identify and address systemic risks like disinformation.
Notably, Facebook, Instagram, Twitter, TikTok, and Snapchat participated in these tests. However, a study by nonprofit Eko reveals that Facebook still approved ads containing harmful content. Meanwhile, Global Witness reported that Facebook, TikTok, and Google's YouTube approved ads inciting violence against the LGBT community in Ireland.
While the designated companies have not explicitly stated non-compliance with the DSA, Amazon and Zalando have challenged their inclusion. Amazon has legally contested its listing, asserting that larger rivals were omitted. Zalando, too, has disputed its classification, arguing that its user base fell below the 45 million threshold.
The upcoming months will determine how these companies navigate their legal obligations, with experts emphasizing the challenges associated with meeting these mandates while maintaining a substantial user base.