European Union limits targeted advertising and content algorithms under new law

The European Union reached an agreement early Saturday to adopt the Digital Services Act. Once the act becomes law in 2024, it will impose greater accountability on the tech giants by requiring them to adhere to new obligations. The DSA could have far-reaching implications, just like the Digital Markets Act before it.

The final text of the Digital Services Act has not been released by the European Commission. The law prohibits ads that target individuals based on their religion, sexual orientation, ethnicity or political affiliation. Companies can't serve ads to children.

The law singles out the recommendation of a computer program. Facebook needs to be transparent about how it displays content to users. More platforms would need to offer chronological feeds because they will need to offer alternative systems not based on profiling. Some of the largest platforms will be required to give data to researchers and NGOs so they can provide insights into how online risks evolve.

Ta da! 16 hours, lots of sweets (but cookies still declined ;) We have a deal on the #DSA: The Digital Services Act will make sure that what is illegal offline is also seen & dealt with as illegal online - not as a slogan, as reality! And always protecting freedom of expression! pic.twitter.com/mUhU84Q9FS

— Margrethe Vestager (@vestager) April 23, 2022

European Commission President Ursula von der Leyen said that the Digital Services Act is historic, both in terms of speed and substance. The principle that what is illegal offline should be illegal online is given practical effect.

The EU will have the power to fine tech companies up to six percent of their global turnover for rule violations, with repeat violations carrying the threat of a ban from the bloc. In the case of a company like Meta, that would translate into a single potential fine of approximately $7 billion.

The most scrutinized tech companies are those that have at least 45 million users in the EU. There are companies in that group. According to a recent report, Apple, Amazon and Spotify spent more than 27 million dollars lobbying EU policymakers last year to change the terms of the Digital Services Act. Lawmakers in other countries, including the US, will look to pass their own antitrust laws as a result of the laws.

The DSA wants to make the internet even more safe, transparent and accountable, while ensuring that European users, creators and businesses continue to benefit from the open web. We will be working with policymakers to get the remaining technical.