EU addresses the harm of social media with groundbreaking new law

The European Union on Friday approached a deal on landmark legislation that would force Facebook, YouTube and other internet services to fight disinformation, reveal how their services amplify divisive content and stop targeting online advertisements based on a person’s ethnicity, religion or sexuality. orientation.

The law, called the Digital Services Act, aims to address the societal harm of social media by requiring companies to more aggressively monitor their platforms for illegal content or risk billions of dollars in fines. Tech companies would be forced to put in place new policies and procedures to remove flagged hate speech, terrorist propaganda and other material deemed illegal by countries within the European Union.

The law aims to end an era of self-regulation in which tech companies set their own policies about what content can remain or be removed. It sets itself apart from other regulatory efforts by tackling online speech, an area that is largely off limits in the United States because of its First Amendment protections. Google, which owns YouTube, and Meta, which owns Facebook and Instagram, would face annual audits for “systemic risks” associated with their businesses, while Amazon would face new rules to curb the sale of illegal products. fuses.

The Digital Services Act is part of a one-two punch by the European Union to address the social and economic impacts of the tech giants. Last month, the 27-nation bloc passed another sweeping bill, the Digital Markets Act, to counter what regulators consider anticompetitive behavior by the largest tech companies, including their hold on app stores, online advertising and internet shopping.

Together, the new laws underline how Europe sets the standard for technical regulation worldwide. Frustrated by anticompetitive behavior, the effect of social media on elections and privacy-invading business models, officials have spent more than a year negotiating policies that give them broad new powers to crack down on tech giants worth trillions of dollars and used by billions of people. people for communication, entertainment, payments and news.

“This will be a model,” Alexandra Geese, a member of the Green Party of the European Parliament from Germany, said of the new law. Ms Geese, who helped draft the Digital Services Act, said she had already discussed the legislation with lawmakers in Japan, India and other countries.

European policymakers were expected to announce a deal in Brussels on Friday, although some warned the deal could be delayed if negotiators needed more time.

The moves contrast with the lack of action in the United States. Although US regulators have filed antitrust cases against Google and Meta, no comprehensive federal laws have been passed that address the power of the tech companies.

But even as European authorities gain new legal powers to rein in the tech giants, critics have wondered how effective they will be. Writing laws can be easier than enforcing them, and while the European Union has a reputation for being the strictest tech industry regulator in the world, its actions sometimes seemed stricter on paper than in practice.

An estimated 230 new employees will be hired to enforce the new laws, a figure critics say was inadequate compared to the resources available to Meta, Google and others.

The workforce figures “are totally inadequate to cope with giant companies and new mammoth tasks,” said Tommaso Valletti, a former top economist for the European Commission who worked on antitrust cases against Google and other tech platforms.

Without robust enforcement, he said, the new laws will amount to an unfulfilled promise. Mr. Valletti said that even if Europe had imposed multibillion-dollar antitrust rulings against Google in recent years, these actions would have done little to restore competition because regulators did not force the company to make major structural changes.

“You need skills: engineers, computer scientists, data scientists and the like,” says Mr. Valletti, professor of economics at Imperial College London. “You need a culture change, both among regulators and regulated companies. That is the real challenge.”

The lack of enforcement of the European Union’s data privacy law, the General Data Protection Regulation, or GDPR, has also cast a shadow over the new laws.

Like the Digital Services Act and Digital Markets Act, the GDPR has been hailed as groundbreaking legislation. But since it went into effect in 2018, little action has been taken against Facebook, Google and others for their data collection practices. Many have circumvented the rules by bombarding users with permission boxes on their websites.

“They have failed to demonstrate their ability to use powerful tools that already exist to rein in Big Tech,” said Johnny Ryan, a privacy rights advocate and senior fellow at the Irish Council for Civil Liberties, who has called for stricter enforcement. “I don’t expect them to suddenly show themselves differently with a new set of tools.”

Amazon declined to comment. Google and Meta did not respond to requests for comment. The companies and industry associations have warned that the laws could have unintended consequences, harm smaller businesses and undermine Europe’s digital economy.

Supporters of the new laws said they had learned from past mistakes. While enforcement of the GDPR was left to regulators in individual countries – many of which felt they were outnumbered by multinational companies with seemingly abysmal legal budgets – the new laws will be largely enforced from Brussels by the European Commission, a major shift in approach.

The final text of the Digital Services Act is not expected to be available for several weeks and final votes are yet to take place, a move largely seen as perfunctory after a deal was announced. But policymakers in the European Commission and the European Parliament involved in the negotiations detailed what would be one of the world’s most far-reaching pieces of digital policy.

The law, which comes into effect next year, will not require internet platforms to remove specific forms of expression, but will leave that to individual countries to determine. (Certain hate speech and references to Nazism are illegal in Germany, but not in other European countries.) The law forces companies to add ways for users to flag illegal content.

Inspired by the war in Ukraine and the pandemic, policymakers also considered giving regulators additional powers to force internet companies to respond quickly during a national security or health crisis. This could include stopping the spread of certain state social media propaganda during a war or the online sale of fake medical supplies and drugs during a pandemic.

Many social media provisions align closely with the recommendations of Frances Haugen, the former Facebook employee turned whistleblower. The law would require companies to provide users with a way to disable recommendation algorithms that use their personal information to customize content.

Meta, TikTok and others should also share more data about how their algorithms worked with outside researchers from universities and civil society organizations. Companies should prepare an annual risk assessment report, reviewed by an external auditor, summarizing the findings that are made public.

Policymakers said the prospect of reputational damage could be more potent than fines. But if the European Commission found that Meta or another company wasn’t doing enough to address the issues identified by auditors, the company could face financial fines of up to 6 percent of global revenue and be forced to change business practices.

New restrictions on targeted advertising could have major implications for Internet-based businesses. The rules would restrict the use of data based on race, religion, political opinions or union membership, although it was considered allowing a company to continue to do so with a user’s consent. The companies would also not be able to target children with ads.

Online retailers like Amazon would face new demands to stop the sale of illegal products by resellers on their platforms, exposing the companies to lawsuits from consumers.

Europe’s position as a regulatory leader will depend on enforcing the new laws, which are likely to face legal challenges from the largest companies, said Agustín Reyna, director of legal and economic affairs at the European Consumer Organization. a consumer watchdog group.

“Effective enforcement is absolutely key to the success of these new rules,” he said. “Great power comes with greater responsibility to ensure that the world’s largest corporations cannot evade their obligations.”

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