Google, Meta and others have to explain their algorithms under the new EU legislation

The EU has agreed on another ambitious piece of legislation to monitor the online world.

Early Saturday morning, after hours of negotiations, the bloc agreed on the general terms of the Digital Services Act (DSA), which will force tech companies to take more responsibility for content that appears on their platforms. The new commitments include faster removals of illegal content and goods, explaining to users and researchers how their algorithms work, and stricter measures against the spread of misinformation. Failure to comply could result in fines of up to six percent of their annual turnover.

“DSA will improve the ground rules for all online services in the EU,” European Commission President Ursula von der Leyen said in a statement. “It gives practical effect to the principle that what is illegal offline should be illegal online. The larger the size, the greater the responsibility of online platforms.”

Margrethe Vestager, the European Commissioner for Competition, who has spearheaded much of the bloc’s tech regulation, said the law would “ensure platforms are held accountable for the risks their services can pose to society and citizens.”

The DSA should not be confused with the DMA or the Digital Markets Act, which it was agreed in March. Both laws affect the tech world, but the DMA focuses on creating a level playing field between companies, while the DSA looks at how companies monitor content on their platforms. The DSA is therefore likely to have an immediate impact on internet users.

Although the legislation only applies to EU citizens, the impact of these laws will certainly be felt in other parts of the world as well. Global technology companies may decide that it is more cost-effective to implement a single content monitoring strategy, using the comparatively strict EU regulations as a benchmark. While lawmakers in the US, looking to rein in big tech with their own regulations, have already begun to take inspiration from EU regulations.

The final text of the DSA has yet to be published, but the European Parliament and European Commission has listed a number of commitments it will include:

• Targeted advertising based on an individual’s religion, sexual orientation, or ethnicity is prohibited. Minors may also not be specifically advertised.
• “Dark Patterns” — confusing or misleading user interfaces designed to trick users into making certain decisions — will be banned. The EU says canceling subscriptions should generally be as easy as signing up.
• Large online platforms like Facebook need to make the workings of their recommendation algorithms (e.g. sorting content in News Feed or suggesting TV shows on Netflix) transparent to users. Users should also be offered a “non-profiling-based” recommendation system. For example, in the case of Instagram, that would be a chronological feed (like it recently introduced).
• Hosting services and online platforms must clearly explain why they have removed illegal content and give users the opportunity to appeal such takedowns. However, the DSA itself does not define what content is illegal and leaves this up to individual countries.
• The largest online platforms must provide researchers with key data to “give more insight into the evolution of online risks”.
• Online marketplaces need to store basic information about traders on their platform in order to track down people selling illegal goods or services.
• Big platforms must also adopt new strategies for dealing with misinformation in times of crisis (a provision inspired by the recent invasion of Ukraine).

The DSA, like the DMA, will differentiate between technology companies of different sizes and impose greater obligations on larger companies. The largest companies – those with at least 45 million users in the EU, such as Meta and Google – come under the most scrutiny. These tech companies have hard praised Watering down the requirements in the DSA, particularly with regard to targeted advertising and the sharing of data with external researchers.

Although the EU member states have now agreed on the general terms of the DSA, the legal language has yet to be finalized and the law officially put into effect. However, this last step is considered a formality at this point. The rules apply to all companies 15 months after the law comes into force or from 1 January 2024, whichever is later.