the European Union has passed a pair of landmark bills designed to rein in Big Tech’s power. The Digital Markets Act and Digital Services Act are intended to promote fairer competition, improve privacy protection, as well as banning both the use of some of the more egregious forms of targeted advertising and misleading practices.
The Digital Services Act, for instance, focuses on online platforms like Facebook, Amazon and Google. They will be tasked with being more proactive both with content moderation and also to prevent the sale of illegal or unsafe goods being sold on their platforms. Users will also be able to learn how and why an algorithm recommended them a certain piece of content, and to challenge any moderation decision that was made algorithmically. Finally, companies will no longer be able to use sensitive personal data for ad-targeting, sell ads to children, or use dark patterns — deceptive page design that can manipulate you into saying yes to something even when you’d much rather say no, such as joining a service or preventing you from leaving one you no longer wish to use.
These obligations operate on a sliding scale, and so the largest platforms will have the greatest obligations placed upon them. Platforms with 45 million or more monthly users will be subject to independent auditing to ensure they are preventing fake news and illegal content. Those platforms will also have to open up their algorithms and data to (approved) researchers to enable them to study the effects, and potential harm, the systems can cause.
The Digital Markets Act, meanwhile, is more focused on preventing dominant platform holders, like Google, Microsoft and Apple, from abusing their scale. This includes offering better interoperability with smaller, rival services, ensuring files can be sent between systems. There is also a large carve-out for app storefronts, with developers now entitled to contact their customers about deals without going via the platform holder in question. And platform holders will no longer be able to give their systems favorable treatment, such as when Google promoted its own shopping service over that of rivals.
The EU has given both bills plenty of teeth, and can dole out a maximum penalty of 10 percent of its total worldwide turnover from the previous year, should regulators find non-compliance. This figure will, however, jump to 20 percent of worldwide turnover if officials find “repeated non-compliance.” That’s a hefty figure big enough that not even Apple would be able to stomach losing on a regular basis. Although, as with GDPR regulation, the EU still has questions to answer about how much effort, time and money it’s prepared to put behind a body to monitor big tech.
Now that they have been passed, the Digital Services Act will come into force by 1st January 2024 (unless some procedural stuff delays it) while the Digital Markets Act will come into force at some point soon after, and major platforms — dubbed “Gatekeepers” will have a further six months to get their houses in order before the new rules apply to them.
The European Commission has set up a taskforce, with about 80 officials expected to join up, which critics say is inadequate. Last month it put out a 12 million euro ($12.3 million) tender for experts to help in investigations and compliance enforcement over a four-year period.
EU industry chief Thierry Breton sought to address enforcement concerns, saying various teams would focus on different issues such as risk assessments, interoperability of messenger services and data access during implementation of the rules.
Regulators will also set up a European Centre for Algorithmic Transparency to attract data science and algorithm scientists to help with enforcement.
“We have started to gear the internal organisation to this new role, including by shifting existing resources, and we also expect to ramp up recruitment next year and in 2024 to staff the dedicated DG CONNECT team with over 100 full time staff,” Breton said in a blogpost.
“We raised the alarm last week with other civil society groups that if the Commission does not hire the experts it needs to monitor Big Tech’s practices in the market, the legislation could be hamstrung by ineffective enforcement,” BEUC Deputy Director General Ursula Pachl said in a statement.
The DMA is set to force changes in companies’ businesses, requiring them to make their messaging services interoperable and provide business users access to their data.
Business users would be able to promote competing products and services on a platform and reach deals with customers off the platforms.
Companies will not be allow to favour their own services over rivals’ or prevent users from removing pre-installed software or apps, two rules that will hit Google and Apple hard.
The DSA bans targeted advertising aimed at children or based on sensitive data such as religion, gender, race and political opinions. Dark patterns, which are tactics that mislead people into giving personal data to companies online, will also be prohibited