The European Union and its member states on Saturday reached an agreement on a new set of rules called the Digital Services Act (DSA), designed to hold the Big Tech accountable for contents posted on their platforms.
The DSA, which was proposed in 2020, came a month after the Commission approved the Digital Market Acts (DMA), designed to curtail monopolistic powers of tech giants. The Commission said the DSA will “provide better protection for internet users and their fundamental rights, as well as define a single set of rules in the internal market, helping smaller platforms to scale up.”
European Commission President Ursula von der Leyen called the agreement “historic,” saying it “will upgrade the ground-rules for all online services in the EU,” and “ensure that the online environment remains a safe space, safeguarding freedom of expression and opportunities for digital businesses.”
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She added that the principle behind the DSA is that what is illegal offline should be illegal online, and that the platforms will be held accountable according their size. This means that larger tech companies like Google, Amazon and Facebook will face more penalties than others when they break the rules.
The bloc lists types of companies that will be affected by the new rules and their obligations under the DSA, which depends on their role, size, and impact on the online ecosystem. These online intermediary services include:
- Intermediary services offering network infrastructure: Internet access providers, domain name registrars;
- Hosting services such as cloud computing and webhosting services;
- Very large online search engines with more than 10% of the 450 million consumers in the EU, and therefore, more responsibility in curbing illegal content online;
- Online platforms bringing together sellers and consumers such as online marketplaces, app stores, collaborative economy platforms and social media platforms;
- Very large online platforms, with a reach of more than 10% of the 450 million consumers in the EU, which could pose particular risks in the dissemination of illegal content and societal harms.
For some years now, the EU has been working on set of rules that will keep tech companies in check, with focus on their use of private data and anti-competition practices. It took its major step in 2018, with the General Data Protection Regulation, a set of privacy rules aimed at limiting companies’ access to consumers’ data. The bloc has kept widening the scope of the rules due to exigencies of the tech industry. There have been other rules though, like the proposed USB-C charging port for all devices, focused among other things, curbing e-waste addressing climate-related concerns brought about by device accessories such as chargers that are not easily recycled when they spoil.
But the DSA appears to be the deal breaker as it addresses what has become a global concern – the proliferation of immoral contents on tech platforms.
Below is the DSA’s framework:
- Measures to counter illegal goods, services or content online, such as:
- a mechanism for users to easily flag such content and for platforms to cooperate with so-called ‘trusted flaggers’;
- new obligations on traceability of business users in online market places;
- New measures to empower users and civil society, including:
- the possibility to challenge platforms’ content moderation decisions and seek redress, either via an out-of-court dispute mechanism or judicial redress;
- provision of access to vetted researchers to the key data of the largest platforms and provision of access to NGOs as regards access to public data, to provide more insight into how online risks evolve;
- transparency measures for online platforms on a variety of issues, including on the algorithms used for recommending content or products to users;
- Measures to assess and mitigate risks, such as:
- obligations for very large platforms and very large online search engines to take risk-based action to prevent the misuse of their systems and undergo independent audits of their risk management systems;
- Mechanisms to adapt swiftly and efficiently in reaction to crises affecting public security or public health;
- New safeguards for the protection of minors and limits on the use of sensitive personal data for targeted advertising.
- Enhanced supervision and enforcement by the Commission when it comes to very large online platforms. The supervisory and enforcement framework also confirms important role for the independent Digital Services Coordinators and Board for Digital Services.
According to Commissioner for the Internal Market Thierry Breton, with this framework, “the time of big online platforms behaving like they are “too big to care” is coming to an end.”
The DSA empowers the Commission to impose effective and dissuasive sanctions of up to 6% of global turnover or even a ban on operating in the EU single market in case of repeated serious breaches. This means, for a company like Meta, the parent company of Facebook, that could mean a penalty as high as $7 billion based on 2021 sales figures.
The agreement will need to be approved by the European Parliament and the Council. The Commission said once adopted, the DSA will be directly applicable across the EU and will apply fifteen months or from 1 January 2024.
But the rules will apply to the very large online platforms and very large online search engines on earlier date. The Commission said it will apply to companies like Google and Meta from four months after their designation.
A Google spokesperson said the company welcomes the DSA’s goals, but added it wants to work with EU policymakers to “get the remaining technical details right to ensure the law works for everyone.”
“We welcome the DSA’s goals of making the internet even more safe, 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.”
The DSA and Elon Musk’s quest for free speech
A few weeks ago, Tesla CEO Elon Musk started advocating for a social media platform where free speech is paramount. The world’s richest man took a surprising step to actualize his aim by making a bid to buy Twitter, the microblogging app he had taken over 9 percent stake in earlier.
His quest, which has gathered a lot of support, resuscitated the conversation on the right of social media companies to censor contents on their platforms. It became a global topic after former US president Donald Trump was banned from all major social media platforms for using his accounts to stoke the Jan.6 Capitol riot.
The world has been increasingly divided on the right path to follow since then, with many asking social media companies to do more to limit hate and disinformation and others asking why they should act as arbiters of truth.
On Thursday, former President Barack Obama called for reforms to Section 230, a law that protects online platforms from liability for their users’ posts, in order to combat the spread of online disinformation.
While the US drags feet in enacting tighter laws that will keep big tech companies in check, Europe has been moving fast with sweeping sets of rules to tame the wildling giants. The DSA is the latest blow to the status quo and it will greatly undermine everything that Musk aims to achieve.
Though his bid has been turned down by Twitter board, Musk is still exploring ways, including financial backing, to actualize it. The call to reform Section 230 is likely going to get a major boost when the DSA is approved. And if the US follows the European steps, Musk’s dream of a social media platform free from censorship will never see the light.