Google and Facebook must explain algorithms under new EU rules

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Major online platforms like Facebook will have to make their recommendation algorithms transparent to the users. (Image: Unsplash)

That The European Union (EU) has agreed on a new law to tame American technology giants such as Google and Facebook.

Under the Digital Services Act (DSA), which ended Friday, Alphabet (which owns Google), Meta (which owns Facebook) and other U.S. technology giants must explain how their algorithms work.

The new rules prohibit targeted advertising aimed at children or based on sensitive data such as religion, gender, race and political attitudes.

Dark patterns – tactics that mislead people into giving personal data to businesses online – will also be banned under the new law.

In response to the disinformation on the web since Russia’s invasion of Ukraine, major online platforms and search engines will be required to take specific measures during such a crisis.

With the new law in place, companies may be forced to hand over data related to their algorithms to regulators and researchers in order to gain much-needed transparency.

Platforms like Facebook will have to make the use of their recommendation algorithms – used to sort content on the news feed or suggest programs on Netflix – transparent to users.

Users should also be offered a ‘not based on profiling’ recommendation system such as the chronological Instagram feed that the company recently returned to.

According to the DSA, companies risk fines of up to 6% of their global revenue for violating the rules. Repeated infringements may result in them being completely banned from doing business in the EU.

Companies also face an annual fee of up to 0.05% of worldwide annual revenue to cover the cost of monitoring their compliance.

SIPA USA via PA Photos The logo of the company Meta appears on the screen of a mobile phone in Barcelona, ​​Spain on October 28, 2021. Facebook CEO Mark Zuckerberg announced on October 28 the name of the new umbrella company that will oversee the social the media Facebook, Instagram, Facebook.  (Photo: Davide Bonaldo / Sipa USA)

Companies may be forced to hand over data related to their algorithms to regulators and researchers. (Photo: Davide Bonaldo / Sipa USA)

The landmark regulation was adopted after 16 hours of negotiations and is part of EU antitrust chief Margrethe Vestager’s strategy to curb the power of American tech giants in Europe.

“The Digital Services Act will ensure that what is illegal offline is also seen and treated as illegal online – not as a slogan, as reality,” Vestager said in a tweet.

The move was celebrated by Facebook whistleblower Frances Haugen, who urged U.S. lawmakers to pass similar rules to bring Big Tech’s growing power in America into check.

‘Once the law is finalized and implemented, the details will matter. We look forward to working with policy makers to get the remaining technical details in order to ensure the law works for everyone, Google said in a statement.

The EU’s strict new rules could become a benchmark for countries that want to rein in the forces of online technology giants.

Last month, Vestager won backing from the EU for landmark rules called the Digital Markets Act (DMA), which could force Google, Amazon, Apple, Meta and Microsoft to change their core business practices in Europe.

The DSA enters into force on 1 January 2024, but depends on when the new rules are adopted into law.

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