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Major online companies are racing to implement new measures ahead of the enforcement of stringent EU regulations this Friday. These measures include restrictions on personalized advertising and changes in policies regarding hate speech. Nineteen platforms, including Instagram, Google, and TikTok, are subject to special obligations under the Digital Services Act, a significant legislation in online content regulation that was approved last year. The rules encompass a ban on religion, gender, or sexual preference-based ad targeting, mechanisms for disclosure of platform actions against misinformation and propaganda, and enhanced protection for minors.
August 25 marks the first deadline, by which companies must submit risk assessments detailing how they will meet the new requirements. Consequently, there has been a rush among online groups to modify their business practices. For example, Elon Musk’s X Corp (formerly Twitter) introduced a hate speech policy that prohibits users from engaging in discriminatory behavior, such as using the Nazi swastika. Social media companies like Meta (owner of Facebook), Snap, and TikTok have allowed users to opt-out of personalized content, which has been a significant element of their success in retaining users. Moreover, these companies, along with Google, have limited targeted ads for individuals under 18 years old and provided users with more information about the reasons behind certain marketing targeting decisions.
Sir Nick Clegg, president of global affairs at Meta, emphasized the significance of complying with the Digital Services Act, stating that they have assembled a large team of over 1,000 people dedicated to this initiative. He further acknowledged that this regulation is not only important for European tech companies but also for all tech companies operating within the EU. In an effort to meet the requirements, TikTok has assigned over 1,000 staff members to work on DSA compliance, demonstrating the substantial resources dedicated to adhering to the rules.
According to Alec Burnside, a partner at law firm Dechert, the EU’s Digital Services Act sets a new digital code for the internet and is likely to become a benchmark for other countries outside the bloc. However, there are still challenges to the rules. Amazon and German internet retailer Zalando have launched legal challenges, arguing that they should not be classified as “very large online platforms.” Amazon suggests that the law should focus on companies primarily involved in information distribution and advertising revenue. Meanwhile, Zalando argues that it does not receive sufficient website traffic to be subject to the regulations. Nevertheless, Amazon has announced plans to provide more information about third-party sellers on its platform and has established a reporting channel for users to flag potentially illegal products.
Smaller platforms like Pinterest and Wikipedia also meet the criteria for the most stringent compliance requirements. Wikipedia has committed to publishing more information about requests it receives to modify or remove content. EU officials anticipate delays from some platforms in submitting their mandatory assessment reports, which evaluate how online platforms address disinformation, illegal content, and harmful products. Regulators warn that latecomers will face fines.
The Digital Markets Act, another significant piece of EU legislation aimed at curbing the power of Big Tech, will take effect at the beginning of next month. Some obligations under the DMA, such as allowing rival app stores or apps to be installed as alternatives, will directly affect revenue generation strategies of companies like Apple. The tight implementation timeline has caused additional stress for affected platforms, diverting valuable time and resources that could have been used for innovation.
Additional reporting by Cristina Criddle in London
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