EU Big Tech Platforms Face Tough Regulatory Scrutiny

LOS ANGELES — The EU’s Digital Services Act or DSA is a new law requiring 19 social media, search and e-commerce services to comply with strict new rules by August 2023, The Wall Street Journal reported in April. Platforms named include Amazon, Meta Platforms and Alibaba’s AliExpress.

Companies must conduct regular assessments to determine all possible risks their systems could pose to individuals or public figures, such as free expression or electoral participation, and show regulators they are addressing them with robust systems.

Violators face fines of up to 6% of their global annual revenue, and the potential to block a platform’s services in the case of specific repeated infringements.

The law represents the most significant overhaul in the EU’s approach to online content in more than a generation, rewiring the concept of online responsibility as it has prevailed since the dawn of the internet. The law requires very large social media services, online marketplaces, and search engines to maintain systems for taking down content that violates their terms or that European national governments consider illegal. They must also provide users with tools to appeal if they believe their posted material was unfairly removed or demoted in rankings.

The law also requires regular outside audits and sharing details of their content-ranking algorithms with regulators. The DSA serves as a template for other parts of the world, including the UK, which is nearing the final stretches of a parliamentary debate on a parallel law called the Online Safety Bill.

Companies with more than 45 million active users in the EU each month, 10% of the bloc’s population, are subject to the new rules. Less stringent requirements will apply next year to services that fall below this threshold and will be enforced by national regulators in the country where a company has its main EU headquarters.

In contrast, the U.S. lags far behind. The U.S. Communications Decency Act Section 230 allows companies to generally escape liability for content their users’ post, provided they make efforts to respond to certain types of problematic content when flagged.