EU’s DSA takes effect: major tech companies face stricter online content regulations

With potential fines of up to 6% of global revenue and the possibility of bans for non-compliance, the DSA’s implementation heralds a new era of accountability for tech giants operating within the EU.

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The European Union (the EU) is implementing the first phase of the Digital Services Act (DSA), a comprehensive set of regulations to regulate and clean up online content provided by major European tech companies. The DSA targets harmful and illegal content that violates a platform’s terms of service, such as promoting hate speech or illegal activities. The regulations also protect users’ fundamental rights, such as privacy and free speech.

The DSA will affect 19 platforms, including social media giants like Facebook, TikTok, Twitter, YouTube, and Instagram, as well as online marketplaces such as Amazon and Alibaba AliExpress.

Fundamental changes under the DSA include:

  1. Improved content reporting mechanisms: Platforms are implementing new ways for users to report illegal or harmful content, and companies are required to respond quickly and objectively to such reports.
  2. Content takedown: Platforms must take down flagged content that violates their policies or is unlawful. The reasons for takedowns will be communicated to both the poster and the flagger, and decisions can be appealed.
  3. Personalization controls: Platforms like TikTok allow users to turn off personalized content recommendations to reduce the potential for extreme content exposure.
  4. Ad targeting restrictions: The DSA prohibits targeting vulnerable groups, including children, with specific ads.
  5. Transparency and control: Users will gain more transparency and control over the ads they see on platforms like Snapchat.

Tech companies that fail to comply with the DSA regulations could face fines of up to 6% of their global revenue or even a ban from operating in the EU. The DSA also evaluates whether tech companies have effective processes to minimize the negative impact of their algorithm-based recommendation systems.

While these regulations are initially limited to Europe, they could have a global impact, especially considering the worldwide reach of digital ad networks and social media influencers. Some companies have expressed concerns over their inclusion on the DSA list, leading to legal challenges.

Why does it matter?

Implementing the EU’s Digital Services Act (DSA) signifies a substantial stride in regulating Big Tech, with the potential for a global impact. This influence is amplified by the ‘Brussels effect,’ where the EU regulations hold international sway due to the EU’s vast consumer market. As seen with Wikipedia’s recent announcement about implementing changes globally, multinational corporations often adopt the EU regulations as a standard, leveraging the EU’s economic significance. This approach assists companies in efficiently navigating compliance across diverse regulatory landscapes worldwide.