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The European Union was nearing agreement on Friday on landmark legislation that would force Facebook, YouTube and other internet services to tackle misinformation, explain how their services amplify divisive content, and stop targeting online ads based on a person’s ethnicity, religion or sexual orientation.
Dubbed the Digital Services Act, the law aims to address the societal harms of social media by requiring companies to more aggressively scrutinize their platforms for illegal content or risk billions of dollars in fines. Tech companies will have to create new policies and procedures to remove flagged hate speech, terrorist propaganda, and other material identified as illegal by European Union countries.
The law aims to end an era of self-regulation where tech companies set their own policies on what content can or can be removed. It stands out from other regulatory initiatives by addressing online speech, an area that is largely prohibited in the United States due to First Amendment protections. Google, which owns YouTube, and Meta, which owns Facebook and Instagram, face annual audits for “systemic risks” associated with their businesses, while Amazon will face new rules to stop the sale of illegal products.
Digital Services Act, a one or two fists by the European Union to address the social and economic impact of tech giants. Last month, the bloc of 27 nations passed a different sweeping lawThe Digital Markets Act to counter what regulators see as anti-competitive behavior by the biggest tech firms, including app stores, online advertising and internet shopping.
Together, the new laws underscore how Europe sets the standard for technology regulation globally. Frustrated by anti-competitive behavior, the influence of social media on elections, and privacy-violating business models, officials have spent more than a year on policies that give them broad new powers to crack down on tech giants worth trillions of dollars and used by billions. People for communication, entertainment, payments and news.
“This will be a model,” said Alexandra Geese, a member of the Green Party of the European Parliament from Germany. Ms Geese, who helped draft the Digital Services Act, said she has already spoken to legislators in Japan, India and other countries about the law.
A deal was expected to be announced in Brussels on Friday by European politicians, but some warned the deal could be delayed if negotiators needed more time.
Yet as European officials gained new legal powers to rein in the tech giants, critics wondered how effective these would be. Writing laws may be easier than enforcing them, and while the European Union has a reputation as the world’s toughest regulator of the tech industry, its actions have sometimes appeared more difficult on paper than in practice.
An estimated 230 new workers will be hired to enforce the new laws, a figure critics say is insufficient Meta compared to resources available to Google and others.
Tommaso Valletti, the European Commission’s former chief economist, who has worked on antitrust lawsuits against Google and other technology platforms, said the staffing figures were “completely inadequate for giant firms and new gigantic missions”.
Without solid enforcement, he said, new laws would be an unfulfilled promise. Mr Valletti said that while Europe has taken billions of dollars in antitrust decisions against Google in recent years, these actions did little to reinvigorate competition as regulators did not force the company to make major structural changes.
“You need skills: engineers, computer scientists, data scientists and the like,” said Mr Valletti, professor of economics at Imperial College London. “You need a cultural shift between regulators and regulated firms alike. That’s the real challenge.”
The non-implementation of the General Data Protection Regulation or GDPR, the European Union’s data privacy law, also cast a shadow over the new laws.
Like the Digital Services Act and the Digital Markets Act, the GDPR has been hailed as landmark laws. But since it went into effect in 2018, small action Against Facebook, Google and others for their data collection practices. Many of them broke the rules by bombarding users with permission windows on their websites.
“They haven’t shown their ability to use the powerful tools that already exist to rein in Big Tech,” said Johnny Ryan, a privacy advocate and senior member of the Irish Civil Liberties Council, and pushed for tougher sanctions. “I don’t expect them to suddenly show themselves differently with a new set of tools.”
Amazon declined to comment. Google and Meta did not respond to requests for comment. Companies and industry trade groups have warned that the laws could have unintended consequences, hurt small businesses and undermine Europe’s digital economy.
Supporters of the new laws said they learned from past mistakes. While implementation of the GDPR is left to regulators in individual countries – which many believe has been surpassed by multinational corporations with seemingly bottomless legal budgets – the new laws will be implemented largely by the European Commission from Brussels, in a major change in approach.
The final text of the Digital Services Act is not expected to be available for several weeks and final votes still need to be taken, a step largely seen as missing after a deal was announced. However, policy makers in the European Commission and European Parliament participating in the negotiations have detailed what will be one of the most comprehensive digital policies in the world.
The law, which will come into effect next year, does not mandate that internet platforms remove certain forms of speech, and does so by defining countries separately. (Certain forms of hate speech and references to Nazism are illegal in Germany, but illegal in other European countries.) The law forces companies to add ways for users to flag illegal content.
Inspired by the war and pandemic in Ukraine, policymakers also considered giving regulators additional power to compel internet companies to respond quickly during a national security or health crisis. This may include the dissemination of certain government propaganda on social media during a war or stopping the online sale of counterfeit medical supplies and drugs during a pandemic.
Many provisions regarding social media are followed closely by advice made by Frances Haugen. ex facebook employee who became an informant. The law was expected to require companies to offer a way for users to turn off recommendation algorithms that use their personal data to tailor content.
Meta, TikTok and others would also have to share more data about how their algorithms work with outside researchers at universities and nonprofit groups. Companies will be required to prepare an annual risk assessment report, which is reviewed by an external auditor, containing a summary of the findings made public.
Policymakers said the likelihood of reputational damage could be stronger than fines. But if the European Commission determines that Meta or another company isn’t doing enough to address the issues identified by the auditors, the company could face financial penalties of up to 6 percent of global revenue and be forced to change its business practices.
The new restrictions on targeted advertising could have major implications for internet-based businesses. The Rules will limit the use of data based on race, religion, political opinion or union affiliation, although it is contemplated to allow a company to continue to do so with the user’s consent. Companies also couldn’t target children with ads.
Online retailers like Amazon will face new requirements to stop the sale of illegal products by dealers on their platforms, leaving companies open to consumer lawsuits.
Agustín Reyna, director of legal and economic affairs at the European Consumer Organisation, a consumer watchdog group, said Europe’s position as regulatory leader will depend on the implementation of new laws, which are likely to face legal challenges from the largest companies.
“Effective implementation is absolutely key to the success of these new rules,” he said. “Greater power comes with greater responsibility to ensure that the world’s largest companies cannot bypass their obligations.”
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