(US) – Starting Friday, the world’s largest tech companies, including Amazon, Apple, Google, Meta, Microsoft, Snapchat, and TikTok, among others, must adhere to an extensive new European law that will impact various aspects of their operations, from social media moderation to targeted advertising and counterfeit goods in e-commerce.
These measures, part of the European Union’s Digital Services Act (DSA), represent one of the most comprehensive and ambitious attempts by regulators worldwide to regulate tech giants through legislation.
The law aims to address critical concerns raised by critics of large tech platforms, including the dissemination of misinformation and disinformation, potential adverse effects on mental health (especially among young people), algorithmically recommended content leading users down rabbit holes, lack of transparency, and the presence of illegal or fake products in virtual marketplaces.
New rules for online advertising and consumer protection
The DSA imposes restrictions on data-driven targeted advertising aimed at children and targeted ads based on protected characteristics like political affiliation, sexual orientation, and ethnicity.
These restrictions apply to various types of online ads, including commercial, political, and issue advertising.
Furthermore, the law prohibits “dark patterns,” subtle design cues intended to nudge consumers into providing personal data or making certain decisions.
Companies are required to provide accessible terms of service and ways for users to report illegal content and products and appeal content moderation decisions.
For very large online platforms, additional measures are in place, including independent risk assessments to identify and mitigate risks, the creation of ad repositories for public inspection, and the possibility of fines of up to 6% of global annual revenue for non-compliance.
Tech companies have been preparing for this deadline by introducing transparency features, content moderation improvements, and restrictions on data collection for targeted ads.
TikTok, for example, rolled out tools to report illegal content and ceased showing ads to European teens based on their data.
These regulations underscore Europe’s position as a leader in curbing the power of large US tech firms and may influence global tech policies.
Some analysts hope that other jurisdictions will follow suit, leading to more consistent global tech regulation.
While the largest tech companies have been working to comply with these regulations, legal challenges and ongoing scrutiny may test the durability of the DSA in the face of their substantial resources.
However, Amazon, for example, expressed its commitment to creating a secure and trustworthy online environment and complying with the DSA, regardless of legal outcomes.