Tech companies face landmark fines under EU’s new content rules

BRUSSELS - The world’s biggest technology companies could face billions of dollars in fines for breaches of new European Union legislation after lawmakers reached an agreement on its scope during the early hours of Saturday.

The landmark Digital Services Act is the EU’s answer to what it sees as a failure by tech giants to combat illegal content on their platforms. Noncompliance could cost companies as much as six percent of their global annual sales when the rules go into effect as early as 2024.

Failures could be extremely costly. Based on their reported 2021 annual sales, Amazon, for instance, could face a theoretical fine of as much as 26 billion euros for future noncompliance with the DSA, or Google as much 14 billion euros.

Facebook whistle-blower Frances Haugen said the DSA could represent a “global gold standard” for regulating social media companies. After more than a year of internal wrangling, key rules will include:

- A ban on using sensitive data such as race or religion for targeting ads

- A ban on targeting any ads to minors

- A ban on so-called “dark patterns,” specifically tactics to push people into consenting to online tracking

All websites will be accountable to the DSA, but platforms with more than 45 million users will have to abide by stricter rules such as paying Brussels a supervisory fee of as much as 0.1 percent of their global annual revenue to enforce the law, and providing regulators with annual reports about illegal and harmful content on their sites.

“With the DSA, we help create a safe and accountable online environment,” Margrethe Vestager, the EU’s competition chief, said in a statement on Saturday.

“With today’s agreement, we ensure that platforms are held accountable for the risks their services can pose to society and citizens.” Google said it welcomed the DSA’s goals and looked forward “to working with policymakers to get the remaining technical details right to ensure the law works for everyone.”

The DSA is the second major piece of legislation in Brussels’ digital rulebook to be cemented in a month. On March 24, the EU finalised its Digital Markets Act, a related framework that requires “gatekeepers” to adhere to strict antitrust rules.