EU adopts new rules to tackle illegal content

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Margrethe Vestager, European Executive Vice President.

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The European Union agreed on new digital regulations on Saturday that will force tech giants like Google and Meta to more aggressively police illegal content on their platforms or face potential multibillion-dollar fines.

The European Parliament and EU member states have reached agreement on the Digital Services Act, a landmark piece of legislation that aims to tackle illegal and harmful content by forcing platforms to remove it quickly.

Margrethe Vestager, EU competition chief and key architect of the bloc’s digital reforms, said the deal was “better than the proposal we tabled” in 2020.

“It is no longer a slogan that what is illegal offline must also be seen and dealt with online,” Vestager said in a video posted to Twitter. “Now it’s a real thing. Democracy is back.”

European Commission President Ursula von der Leyen released a statement calling the deal “historic”.

“The DSA will update the ground rules for all online services in the EU,” she said. “This will ensure that the online environment remains a safe space, preserving freedom of expression and opportunities for digital businesses.”

What is DSA?

A key piece of the legislation would limit how digital giants target users with online advertisements. The DSA would effectively prevent platforms from targeting users with algorithms using data based on their gender, race or religion. It will also be prohibited to target children with advertisements.

So-called dark patterns — deceptive tactics designed to push people into certain products and services — will also be banned.

Tech companies will be required to implement new procedures designed to weed out illegal content such as hate speech, incitement to terrorism and child sexual abuse. E-commerce marketplaces like Amazon must also prevent sales of illegal goods under the new rules.

The law includes measures requiring tech giants to be more transparent about the algorithms they use to recommend content to users. Another provision would require very large online platforms and search engines to take certain actions in the event of a crisis, such as Russia’s invasion of Ukraine.

Failure to comply with the rules can lead to fines of up to 6% of companies’ overall annual turnover. For a company like Meta, Facebook’s parent company, that could mean a penalty of up to $7 billion based on 2021 sales numbers.

The law is now subject to the formal approval of the EU institutions. It should come into force in 2024.

The DSA is separate from the Digital Markets Act, which EU institutions approved last month. Both come with the threat of hefty fines. But while the DMA seeks to limit the market power of Big Tech companies, the DSA aims to ensure that platforms get rid of toxic content quickly.

The law will affect user-generated content sites like Facebook, Instagram, Twitter, YouTube and TikTok.

A Google spokesperson said the company welcomes the DSA’s aims, but added that it wanted to work with EU policymakers to “get the remaining technical details to ensure the law works for everyone”.

“We welcome the DSA’s goals of making the internet even more secure, transparent and accountable, while ensuring that European users, creators and businesses continue to benefit from the open web,” the spokesperson told CNBC. “As the law is finalized and implemented, the details will matter.”

A Twitter spokesperson said the company looks forward to reviewing the regulations in detail.

“We support smart, forward-thinking regulation that balances the need to address online harm with protecting the open internet – while understanding that a one-size-fits-all approach fails to take into account the diversity of our online environment. “, the spokesperson told CNBC.

“It’s Twitter’s top priority to keep people safe online and protect the health of the public conversation, and under the Digital Services Act, we welcome the increased focus on healthier digital spaces in the EU.”

EU vs. Big Tech

Brussels has a long history of berating internet giants for abuses of competition and data privacy.

The bloc has imposed combined fines of 8.2 billion euros ($8.8 billion) on Google for violating antitrust laws, and is actively investigating Amazon, Apple and Meta.

In 2018, the EU introduced the General Data Protection Regulation, an extensive set of privacy rules aimed at giving consumers more control over their information.

The advent of new EU rules to regulate Big Tech comes as policymakers in Washington grapple with how to curb the power of big tech companies and get them to cleanse their platforms of harmful content.

On Thursday, former President Barack Obama called for reforms to Section 230, a law that protects online platforms from liability for their users’ posts, to combat the spread of misinformation online.

But how the EU manages to implement its new rules in practice is unclear. Critics say implementing such measures will create technical burdens and raise questions about what speech is or is not acceptable online.

In the UK, new laws designed to tackle dangerous content have come under fire from some players in the tech industry, including Big Tech platforms, over a vague description of ‘legal but harmful’ content. .

Critics say it could severely limit freedom of expression online. For its part, the UK government said it would not demand the removal of all legal free speech and that “democratically important” content would be protected.

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