EU gets tough on Big Tech
Taking aim at hate speech, disinformation and other harmful content online, the European Union has reached a landmark agreement on a sweeping law that should force big tech companies to police themselves harder, make it easier for users to flag problems, and empower regulators to punish non-compliance with billions in fines.
EU officials yesterday negotiated the final details of the Digital Services Act, which overhauls the digital rulebook for 27 countries and cements Europe’s reputation as the global leader in reining in the power of social media companies and other digital platforms, such as Facebook, Google and Amazon.
The act is the EU’s third significant law targeting the tech industry – a notable contrast with the United States, where lobbyists representing Silicon Valley’s interests have largely succeeded in keeping federal lawmakers at bay.
While the US Justice Department and Federal Trade Commission have filed major antitrust actions against Google and Facebook, Congress remains politically divided on efforts to address competition, online privacy, disinformation and more.
The EU’s new rules, which are designed to protect internet users and their ‘‘fundamental rights online’’, should make tech companies more accountable for content created by users and amplified by their platforms’ algorithms.
‘‘The DSA is nothing short of a paradigm shift in tech regulation. It’s the first major attempt to set rules and standards for algorithmic systems in digital media markets,’’ said Ben Scott, a former tech policy advisor to US politician Hillary Clinton who is now executive director of advocacy group Reset.
Though agreed to in principle, the law still needs to be approved by the European Parliament and European Council.
The need to regulate Big Tech more effectively came into sharper focus after the 2016 US presidential election, when Russia was found to have used social media platforms to try to influence the country’s vote. Tech companies like Facebook and Twitter promised to crack down on disinformation, but the problems have only worsened.
During the pandemic, health misinformation blossomed – and again, the companies were slow to act, cracking down only after years of allowing anti-vaccine falsehoods to thrive on their platforms.
Under the EU law, governments would be able to ask companies to take down a wide range of content that would be deemed illegal, including material that promotes terrorism, child sexual abuse, hate speech and commercial scams.
Social media platforms like Facebook and Twitter would have to give users tools to flag such content in an ‘‘easy and effective way’’, so that it can be swiftly removed. Online marketplaces like Amazon would have to do the same for dodgy products.
Companies that violate the rules face fines amounting to as much as 6% of their annual global revenue, which for tech giants would mean billions of dollars. Repeat offenders could be banned from the EU market.
Tech giants had been lobbying furiously in Brussels to water down the EU rules.
Google said yesterday that it looked forward to ‘‘working with policymakers to get the remaining technical details right to ensure the law works for everyone’’. Amazon referred to a blog post from last year that said it welcomed measures that enhanced trust in online services. Facebook did not respond to requests for comment, and Twitter declined to comment.
The Digital Services Act bans ads targeted at minors, as well as ads targeted at users based on their gender, ethnicity and sexual orientation. It also bans deceptive techniques companies use to nudge people into doing things they didn’t intend to, such as signing up for services that are easy to opt into but hard to decline.
To show they’re making progress on limiting these practices, tech companies will have to carry out annual risk assessments of their platforms.
Until now, regulators have had no access to the inner workings at Google, Facebook and other popular services. But under the new law, the companies will have to be more transparent and provide information to regulators and independent researchers on content moderation efforts. This could mean, for example, making YouTube turn over data on whether its recommendation algorithm has been directing users to more Russian propaganda than normal.
To enforce the new rules, the European Commission is expected to hire more than 200 new staff. To pay for this, tech companies will be charged a ‘‘supervisory fee,’’ which could be up to 0.1% of their annual global net income, depending on the negotiations.
Experts say the new rules are likely to spark copycat regulatory efforts by governments in other countries, while tech companies would also face pressure to roll out the rules beyond the EU’s borders.
The EU reached a separate agreement last month on its socalled Digital Markets Act, a law aimed at reining in the market power of tech giants and making them treat smaller rivals fairly.
In 2018, the EU’s General Data Protection Regulation set the global standard for data privacy protection, though it has faced criticism for not being effective at changing the behaviour of tech companies.
The new rules are likely to spark copycat regulatory efforts in other countries.