Casting the Reins

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The European Parliament approved two new laws this week that it says would rein in tech giants and transform the bloc’s digital landscape through fairer competition and additional consumer safety, Euronews reported.

Lawmakers overwhelmingly voted in favor of the Digital Services Act (DSA) and the Digital Markets Act (DMA), both considered the first laws of their scope worldwide to address hate speech, competition and data privacy issues resulting from the transformation of the European Union’s digital economy in recent years.

For example, the DSA will set new rules and obligations for companies, such as Google and Facebook, to tackle societal risks from the internet. These include curbing hate speech, fighting illegal online content and products, and providing more transparency about their content moderation and use of algorithms.

Also under the DSA, targeted advertising based on sensitive data, such as ethnicity, sexual orientation or religious views will be prohibited.

Meanwhile, the DMA aims to enforce fair competition across the EU’s single market, primarily focusing on the digital “gatekeepers” – large platforms that hold a dominant market position and are almost impossible to avoid for consumers.

The legislation establishes a list of obligations for gatekeepers, such as making their services inter-operable with smaller competitors. Gatekeepers will not be allowed to rank their own services more favorably or prevent users from uninstalling pre-loaded apps, such as Apple Music on iPhones.

Failure to comply with the DMA’s provisions could result in steep fines of up to 10 percent of a company’s total worldwide turnover in the preceding financial year and 20 percent in case of repeated infringements.

While some lawmakers hailed the landmark laws, others have questioned if EU regulators will be able to enforce them, Reuters noted.

The European Commission has set up task forces and set aside $12.3 million to hire professionals to aid in probes and compliance enforcement over a four-year period.

Even so, critics warned that the enforcement plans are inadequate to counter Big Tech’s deep pockets and array of lawyers.