The Digital Services Act and Digital Markets Act were adopted by the European Parliament. Some of the major emerging issues of internet and social media companies are addressed by the legislation. The purpose of the DSA is to boost the efficacy and transparency of online moderation.
Tech giants have taken advantage of an absence of rules. The digital world has become a Wild West with the biggest and strongest setting the rules. There is a new Sheriff in town. The vote count for the DMA was 588 for, 11 against, and 31 abstentions. The count was 539 for, 54 against, and 30 abstentions.
Some tech companies are not covered by the legislation. The companies will be targeted if they have an annual gross revenue of more than 7 billion. To be considered agatekeeper, a service needs to have at least 45 million monthly users in the European Union and 10,000 yearly users. Apple, Meta, Amazon, and China-based mega-online-retailerAlibaba are some of the companies that meet these requirements.
Corporations and others that are large enough to qualify asgatekeepers will not be allowed to prefer or mandate their own services on their hardware. Pre-installed software needs to be un-installed. It will have to be compatible across platforms. The amount of time companies can track users without explicit consent is limited by the DMA. The goal of the laws is to ensure a fair business environment and more services for consumers.
Although different sets of regulations will apply to each category, the DSA is more broad and covers services like internet service providers, web hosting services, online platforms, and very large online platforms.
New transparency and accountability reporting requirements will apply to all categories of company. Only large online platforms will need to allow users to opt out of ad and content recommendations based on their political views. The DSA package of laws is intended to counter illegal and misleading content posted online, increase effective moderation of that content, and make companies more accountable for the way in which their platforms are used.
Companies will be fined up to 10% of their annual gross revenue if they violate the DMA.
The DMA will go into effect in the early part of the 20th century. So will the DSA for the biggest online platforms. Smaller companies will have more time to comply with the services act. The DSA will begin either 15 months from its entry into the EU Official Journal or on January 2024. It has been a long time since the legislation was made. In December 2020, the European Commission proposed the DSA and DMA. Since then, large tech companies have released public statements condemning aspects of the new laws.
The enforcement potential of the two acts is a question mark. The General Data Protection Regulation passed by the EU ended up flopping because of disorganized enforcement. The European Commission will be in charge of enforcement through task forces and committees. Some are unconvinced that the Commission is allocating enough resources.
Time will tell if Europe's new approach to big tech can change things.
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