EU Imposes Sweeping Regulations on Large US Tech Companies: Starting this Friday, the world’s largest tech companies will be required to adhere to a far-reaching European law that impacts a broad spectrum of areas, including social media moderation, targeted advertising, and counterfeit goods in e-commerce. This unprecedented set of EU measures applies to major corporations such as Amazon, Apple, Google, Meta, Microsoft, Snapchat, and TikTok, among others. The initiative represents an ambitious effort by policymakers to regulate tech giants through legislation, potentially influencing global standards.
The Scope of EU Measures
The new rules set forth by the EU for online platforms extend to various aspects of tech companies’ operations, aiming to address concerns raised by critics of large tech platforms in recent times. These concerns encompass issues like the spread of misinformation and disinformation, potential adverse effects on mental health—particularly among young people, algorithmically driven content recommendations lacking transparency, and the presence of illicit or counterfeit products on virtual marketplaces.
Balancing Innovation and Regulation
The EU asserts that the law is designed to create a level playing field that promotes innovation, growth, and competitiveness within the European Single Market and globally. The initiative underscores Europe’s role as a leader in restraining the influence of large US tech companies.
Addressing Ad Practices and ‘Dark Patterns’
The DSA introduces noteworthy changes for all platforms, irrespective of their size. It prohibits data-driven targeted advertising aimed at children and internet users based on protected characteristics such as political affiliation, sexual orientation, and ethnicity. This prohibition applies to diverse forms of online advertisements, including commercial, political, and issue-based ads. Additionally, the law bans the use of “dark patterns,” subtle design cues that might prompt consumers to divulge personal data or make decisions advantageous to the company. An example of a dark pattern is making the “opt-in” button for data tracking prominent while downplaying the “opt-out” choice.
Enhanced Transparency and Oversight
Online platforms are required to facilitate the reporting of illegal content and products while offering a mechanism for users to appeal content moderation decisions. Moreover, companies must present their terms of service in a user-friendly manner.
Conclusion of EU Imposes Sweeping Regulations on Large US Tech Companies
For the largest tech platforms, the DSA introduces further obligations. Entities designated as Very Large Online Platforms or Very Large Online Search Engines must perform independent risk assessments, focusing on how malicious actors might manipulate their platforms or exploit them for election interference and human rights violations. These platforms must mitigate such risks and establish repositories for ads they’ve displayed, allowing public inspection.