1. What drives this?
We have come a long way since the early days when social media was supposed to connect the world and promote truth and mutual understanding. Today, conspiracy theories about US-funded bio-laboratories in Ukraine could jump from obscure QAnon forums all the way to Fox News. We have seen scandals about breaches of personal data security and promotion of quack treatments for Covid-19. Events like the Capitol Hill riot on January 6, 2021 show how misinformation can trigger violence. Claims last year that content on Facebook encouraged eating disorders and helped incite genocide in Myanmar increased the pressure for action.
2. What is the EU plan?
The EU Digital Services Act passed on April 23 gives governments more power to force companies to remove illegal content such as hate speech, terrorist propaganda or unsafe toy ads. Failure to do so could result in fines of up to 6% of their annual turnover. Platforms will need to adhere to a code of conduct, allow law enforcement agencies to examine the algorithms that determine what users see, and report back on how they handle harmful material. If it turns out that they are not doing enough, they can be told to change the algorithms. Additional powers to combat disinformation can be unleashed during a crisis, such as a war or a pandemic. Ads targeted at children – a major source of revenue for the companies that own Facebook and Google – will be banned. The same goes for targeting ads that use race, religion, and other sensitive information.
This means that the social media giants will no longer be left to police themselves, although much depends on what the EU decides is harmful and how strictly the new rules are enforced. A lot of “fake news” and the misinformation that Haugen has marked is not illegal and can not be removed unless it violates the terms and conditions of the platform. The alternative is to stop offensive content that appears in feeds. But the algorithms that determine what users see are complex and there is little precedent that can guide EU regulators when they start their work.
4. How have the big tech companies reacted?
They are concerned that the details of how the DSA will work in practice are not clear. Watchdog groups say technology giants spent record sums lobbying the EU, particularly on the DSA and the Digital Markets Act, a separate piece of legislation designed to curb their market power. DMA was originally their main focus when Apple Inc. would be forced to allow third-party app stores in its products, and Amazon.com Inc. would be banned from ranking its own e-commerce products higher than those of competitors. The DSA eventually became the more controversial bill after Haugen came to the European Parliament with the alarm bells ringing over hate speech and harmful content, and lawmakers tried to completely ban targeted advertising. While these efforts have failed, companies continued one of the largest lobbying efforts Brussels has ever seen.
The EU will have to find funds to hire hundreds of people to monitor the DSA and DMA. And even heavy fines can simply be shrugged off by the cash-rich tech giants. National regulators have never come close to applying the maximum fines allowed in the current EU data rules. There are also technical obstacles. For example, how do you know someone is too young to be targeted by ads without collecting data about them in the first place? The way DSA is implemented will be up to the EU’s 27 member states, all of which have different legal regimes. Their different interpretations of what represents illegal hate speech can mean that a position is taken down in Germany, but left behind in Denmark.
6. Is the EU at the forefront here?
The DSA will still put Europe ahead of the United States in regulating large technology companies. The United States even fought against EU plans, claiming that it was unfairly targeting American companies. But lots of Washington lawmakers have pushed for faster action and see the DSA as a possible model. Britain may end up being even tougher than the EU on tackling harmful content. Its planned online safety law will impose larger fines and may even mean jail time for managers who fail to comply.
More stories like this are available at bloomberg.com