Big Tech companies are facing unprecedented scrutiny as the European Union’s (EU) Digital Services Act (DSA) takes effect. This sweeping legislation imposes new rules on content moderation, user privacy, and transparency. More than a dozen world-renowned tech giants, including Facebook, Instagram, TikTok, and Google, are now adapting to these new obligations. The EU is considered a global leader in tech regulation, and the success of implementing these laws will likely influence similar rules worldwide.
The DSA rules initially apply to 19 of the largest online platforms with over 45 million users in the EU. However, from mid-February, they will extend to various online platforms regardless of size. Non-compliance with the DSA can result in fines of up to 6% of a company’s global turnover, and repeat offenders may even face the possibility of being banned from operating in Europe entirely.
When asked about the changes they’ve made to comply with the DSA, most designated companies declined to comment or referred to public blog posts on the matter. Some companies, such as e-commerce giant Amazon and German fashion retailer Zalando, are challenging their inclusion on the list in court. Legal experts predict that platforms will fiercely defend their practices, especially when compliance rules encroach on their core business models.
To assess the preparedness of the 19 platforms, the European Commission offered to conduct DSA stress tests. These tests aimed to evaluate the platforms’ abilities to detect, address, and mitigate systemic risks like disinformation. So far, five platforms, including Facebook, Instagram, Twitter, TikTok, and Snapchat, have participated in these tests. The Commission stated that more work is required to prepare for the DSA.
However, just as the DSA rules come into effect, nonprofit organization Eko published research revealing that Facebook approved online ads containing harmful content. Eko submitted 13 ads, including one inciting violence against immigrants and another advocating for the assassination of a European Parliament member. Facebook approved eight of these ads within 24 hours, while five were rejected. It is important to note that the ads were removed before being published, so no Facebook users saw them. In response, Meta, the parent company of Facebook, stated that the research was based on a small sample size and not representative of the number of ads they review daily.
This year, another nonprofit, Global Witness, claimed that Facebook, TikTok, and Google’s YouTube had all approved ads inciting violence against the LGBT community in Ireland. Both Meta and TikTok firmly stated that hate speech has no place on their platforms and that they continuously review and improve their procedures. Google did not respond to the inquiry.
While none of the designated companies have stated their intention to disobey the DSA, Amazon and Zalando are disputing their inclusion on the list. Amazon filed a legal challenge, arguing that larger competitors in the countries concerned were not designated. Nonetheless, Amazon has implemented new features as part of its DSA compliance program, such as a channel for users to report incorrect product information. Zalando has also launched a similar legal challenge, asserting that it falls below the 45 million user threshold due to only 31 million monthly active users buying from third-party sellers on its platform.
Legal experts believe that it will soon become evident whether the designated companies have adequately met their legal responsibilities. Ironing out these obligations will be a challenging task for platforms with a large user base. As the EU sets the stage for tech regulation, the implementation and impact of the DSA will significantly shape the development of similar rules worldwide. The outcome of these legal battles and the subsequent compliance with the DSA will have far-reaching consequences for Big Tech and their operations in Europe.
