The European Commission has set a deadline of October 21 for the Chinese online marketplace Temu to respond to inquiries regarding its compliance with the Digital Services Act (DSA). The Commission is seeking detailed information about Temu’s efforts to combat the sale of illegal products on its platform and the measures it has implemented to ensure consumer protection, public health, and user wellbeing.
Temu, founded in 2022 by PDD Holdings, was classified as a Very Large Online Platform due to its user base exceeding 45 million monthly average users in the EU. It was previously required to meet DSA standards by the end of September, including addressing systemic risks and preventing the sale of counterfeit goods. This latest inquiry marks the second time the Commission has sought clarification from Temu, following questions in June about its compliance with the “Notice and Action mechanism” for reporting illegal products.
The European Consumer Organisation (BEUC) has also raised concerns about Temu’s practices, filing complaints against the platform for failing to protect consumers and employing manipulative tactics. These complaints, supported by representatives from 17 EU member states, allege that Temu does not provide essential seller information, hindering consumers’ ability to verify product safety compliance. The DSA has been in effect since February, and the EU has initiated several investigations into other major platforms for similar compliance issues.
Brazil‘s government has proposed a reform to its competition law that would empower the antitrust authority, CADE, to designate certain digital platforms as systemically relevant, imposing new obligations on them as needed. The Finance Ministry emphasises the importance of equipping local legislation with tools to tackle the challenges posed by large tech firms that inhibit competition due to their size and market influence. This reform targets practices like exclusivity agreements, ‘killer acquisitions,’ and self-preferencing in search results.
The proposed changes would require digital platforms to submit pre-merger notifications and follow transparency rules concerning service and product usage. They would also need to disclose any modifications to their terms of service. The government seeks to find a balance between the regulatory frameworks of the US and the EU while taking inspiration from practices in Japan, the UK, and Germany.
The next steps for the Brazilian government include deciding whether to present these recommendations as a new bill to Congress or to integrate them into existing legislative proposals. Economic Reforms Secretary Marcos Pinto highlighted that the goal of the proposal is to promote competition while avoiding hindrances to innovation or unnecessary bureaucracy, underscoring the need to maintain a competitive economic environment.
The US Department of Justice has proposed remedies to dismantle Google‘s dominance in the search market, which analysts warn could undermine the company’s primary profit source and hinder its advancements in AI. The DOJ may seek to compel Google to divest parts of its business, including the Chrome browser and Android operating system, while also considering measures such as barring the collection of sensitive user data, requiring transparency in search results, and allowing websites to opt out of their content being used for AI training.
The proposed changes have already affected Alphabet’s stock, which fell by 1.5% after the announcement. Analysts indicate that if these remedies are put into action, they could diminish Google’s revenue while providing more opportunities for competitors like DuckDuckGo and Microsoft Bing, as well as AI companies such as Meta and Amazon. With Google’s share of the US search ad market expected to fall below 50% for the first time in over a decade by 2025, these remedies are viewed as essential for creating a more competitive landscape.
Despite the ambitious nature of the DOJ’s proposals, some experts are sceptical about their feasibility. Adam Kovacevich from the Chamber of Progress argues that these remedies could encounter legal challenges and may not withstand the appeals process. While investors appear doubtful that a forced breakup of Google will take place, the situation highlights the increasing scrutiny and pressure on the tech giant within a rapidly changing competitive landscape.
Elon Musk’s platform, X (formerly known as Twitter), will not be classified as a ‘gatekeeper’ under the EU’s Digital Markets Act (DMA), a landmark set of tech regulations that impose strict obligations on major digital players. According to sources familiar with the situation, the European Commission, which has been investigating X since May, is expected to confirm this decision in the coming week.
The DMA prevents dominant tech companies from abusing their market power, particularly in messaging apps and pre-installed software. Platforms designated as gatekeepers must comply with rules to promote competition, such as ensuring their messaging systems are interoperable with rival apps and allowing users to choose which apps to install by default on their devices.
Despite meeting the user-base threshold for a gatekeeper, X argued that it does not meet the additional criteria of being a key intermediary between businesses and consumers. This claim led the Commission to launch its investigation to clarify whether the platform should face the extra obligations imposed by the DMA.
While several major companies, including Alphabet, Amazon, Apple, Meta, Microsoft, TikTok’s parent company ByteDance, and Booking.com, have already been named as gatekeepers under the act, X has successfully avoided this designation, at least for now. If violations are found, this decision could spare X from stringent requirements and potential penalties, amounting to up to 10% of a company’s global revenue.
As the Commission’s ruling draws near, it highlights the ongoing scrutiny faced by tech giants under EU regulations to curb their influence over the digital economy. For Musk’s X, this is a significant reprieve amid growing regulatory pressure on Big Tech worldwide.
Social media giant X, formerly known as Twitter, became accessible to some Brazilian users on Wednesday, just one day after the country’s Supreme Court cleared the platform to resume operations by complying with court rulings. Brazil’s telecommunications regulator, Anatel, announced that it had begun instructing internet providers to restore access to X. Many users celebrated the return of the platform, with topics like ‘we’re back’ trending across Latin America’s largest country.
Despite the reopening, some Brazilians still encountered difficulties accessing X, as Anatel indicated that the restoration time would depend on the procedures of individual internet providers. Supreme Court Justice Alexandre de Moraes, who had been engaged in a lengthy dispute with billionaire Elon Musk, granted approval for X’s return on Tuesday afternoon. He instructed Anatel to ensure the platform was operational within 24 hours, affirming that X had fulfilled all necessary requirements to resume its services.
X had been suspended in Brazil since late August due to its failure to comply with court orders related to hate speech moderation and the absence of a designated legal representative in the country, as mandated by law. As the platform’s sixth-largest market worldwide, Brazil accounted for approximately 21.5 million users as of April, making the resumption of service a crucial step for X’s growth and presence in the region.
TikTok is facing multiple lawsuits from 13 US states and the District of Columbia, accusing the platform of harming and failing to protect young users. The lawsuits, filed in New York, California, and other states, allege that TikTok uses intentionally addictive software to maximise user engagement and profits, particularly targeting children who lack the ability to set healthy boundaries around screen time.
California Attorney General Rob Bonta condemned TikTok for fostering social media addiction to boost corporate profits, while New York Attorney General Letitia James connected the platform to mental health issues among young users. Washington D.C. Attorney General Brian Schwalb further accused TikTok of operating an unlicensed money transmission service through its live streaming and virtual currency features and claimed that the platform enables the sexual exploitation of minors.
TikTok, in response, denied the allegations and expressed disappointment in the legal action taken, arguing that the states should collaborate on solutions instead. The company pointed to safety measures, such as screen time limits and privacy settings for users under 16.
These lawsuits are part of a broader set of legal challenges TikTok is facing, including a prior lawsuit from the U.S. Justice Department over children’s privacy violations. The company is also dealing with efforts to ban the app in the US due to concerns about its Chinese ownership.
Google is gradually rolling out new security features to protect user data, focusing on preventing unauthorised access in cases of theft. The latest tools, which include Theft Detection Lock, Offline Device Lock, and Remote Lock, were announced in May and are becoming available on various Android devices.
Theft Detection Lock uses AI to lock the screen when it detects movement commonly associated with theft, such as someone snatching the phone. Offline Device Lock automatically secures the screen if a phone remains offline for a while, while Remote Lock allows users to lock their phone remotely using only their phone number, even if they can’t log into Find My Device.
Some users have reported seeing the features on devices like the Xiaomi 14T Pro, though others may need to wait as Google rolls out these updates over time. Users are encouraged to ensure their Google Play Services are updated to potentially access these features sooner.
The new security options are supported on Android 10 and up for Theft Detection Lock and Offline Device Lock, while Remote Lock works on devices running Android 5 and higher.
A US judge has ruled that Google must make significant changes to its Play Store, allowing Android users to access third-party app stores and payment methods for three years. The ruling comes after a jury sided with ‘Fortnite’ creator Epic Games, which accused Google of monopolising app access and in-app payments on Android devices.
The order, issued by Judge James Donato, prevents Google from blocking alternative payment options or pre-installing its app store through deals with device makers. The decision is set to take effect on 1 November 2024, giving Google time to comply. However, Google plans to appeal the ruling, arguing that it could harm consumers, developers, and device makers.
Epic Games CEO Tim Sweeney called the decision “big news” and said it could lead to a more competitive Android ecosystem by 2025. Meanwhile, Google is also facing antitrust cases over its dominance in web search and ad technology.
Coinbase announced on Friday that it will delist certain stablecoins in the European Economic Area (EEA) by the end of the year as the cryptocurrency industry prepares for stricter regulations in the region. The EU‘s new Markets in Crypto-Assets (MiCA) regulation, introduced in early 2023, will be fully implemented by December. This framework mandates that stablecoin issuers adhere to stringent transparency, liquidity, and consumer protection standards.
In line with its commitment to compliance, Coinbase intends to restrict services for EEA users concerning stablecoins that do not comply with MiCA requirements by 30 December 2024. The exchange will provide affected customers with options to switch to authorised stablecoins, including USDC and EURC from fintech firm Circle, which are pegged to the US dollar and euro, respectively.
Stablecoins have gained significant popularity in recent years, particularly as major financial institutions like PayPal adopt them. This growth reflects the increasing integration of the once-nascent digital assets sector into mainstream finance.
The European Commission’s Digital Fairness Fitness Check underscores the urgent need to reform the EU consumer protection laws due to emerging digital challenges. While current regulations remain significant, they must evolve to tackle issues such as manipulative online designs, known as ‘dark patterns,’ and exploiting consumer vulnerabilities through targeted advertisements.
This comprehensive evaluation reviewed three critical EU directives – the Unfair Commercial Practices Directive, the Consumer Rights Directive, and the Unfair Contract Terms Directive. Despite their continued importance, these laws need to address recent digital trends that manipulate consumer behaviour. Notable concerns include addictive designs in video games with gambling-like features and targeted ads exploiting financial and mental health vulnerabilities. Also, social media influencers sometimes engage in deceptive practices, further complicating the digital landscape.
The report reveals that these harmful practices cost EU consumers an estimated €7.9 billion annually, while the cost for businesses to comply with existing EU laws stands at €737 million annually. The disparity is exacerbated by fragmented national legislation, weakening consumer protection across the EU. To address these challenges, the Commission aims to refine regulations related to dark patterns and enhance enforcement strategies, fostering a fairer digital environment for consumers.
Why does it matter?
The Fitness Check does not provide specific recommendations. Still, it lays the groundwork for the Commission’s upcoming agenda to adopt consumer protection measures, ensuring they reflect the nature of the digital market and effectively safeguard consumer interests.
