European Union passes landmark laws to rein in big tech

The European Union has passed two landmark bills designed to rein in Big Tech's power. The Digital Markets Act and Digital Services Act are intended to promote fair competition, improve privacy protection, and ban the use of some of the more egregious forms of targeted advertising.

The Digital Services Act is focused on online platforms. They will be expected to be more proactive in moderation of their content and to prevent the sale of illegal or unsafe goods on their platform. Users will be able to learn how and why moderation decisions are made, as well as challenge them if they are made in a way that violates the rules. Companies will no longer be able to use sensitive personal data for ad-targeting, sell ads to children, or use dark patterns, as well as deceptive page design that can manipulate you into saying yes to something.

The biggest platforms will have the greatest obligations placed on them. Independent auditing will be required of platforms with more than 45 million users. The platforms will have to open up their data to approved researchers so they can study the effects of the systems.

The Digital Markets Act is meant to prevent platform holders from abusing their scale. Better interoperability is one of the things this includes. The carve-out for app storefronts allows developers to contact their customers without using the platform holder. It will no longer be possible for platform holders to give their systems favorable treatment when it comes to promoting their own services.

The EU has given both bills plenty of teeth, and can dole out a maximum penalty of 10 percent of its total worldwide turnover from the previous year. If officials find repeated non-compliance, this figure will increase to 20 percent. Not even Apple could stomach losing on a regular basis. The EU has questions to answer about how much time and money it will invest in a body to monitor big tech.

The Digital Services Act will come into force on January 1st of next year, while the Digital Markets Act will come into force at some point in the future.