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Large Technology Companies Face New EU Rules

All the world’s largest companies are required to comply with a new EU law that affects everything from advertising to social media moderation and counterfeit goods. These new unprecedented EU rules will have a massive effect on some of the world’s biggest companies, such as Meta, Microsoft, Amazon, Apple, Snapchat, TikTok, etc. The new policies could lead to regulation of tech giants through legislation, and failure to follow the new regulations could lead to fines. These new rules could mean that some of these companies may have software changes, therefore affecting consumers.

The rules are mainly meant to address the most serious concerns that critics of these big tech companies have raised in recent years. This includes the spread of misinformation and disinformation, health harm, lack of transparency, and the spread of illegal or fake products. Although this law was passed by the European Union’s Digital Services Act (DSA) last year, companies are required to enforce it now. The need for regulating these large tech firms is drawn by the fact that they serve more than 45 million people in Europe.

According to the EU, the law is meant to establish a level playing field to foster growth, innovation, and competitiveness both in Europe and globally. This latest action has reinforced Europe’s position as the leader in checking the power of large US technology companies.

DSA has banned all data-driven targeted advertising aimed at children and targeted adverts to all internet users based on protected characteristics like political affiliation, ethnicity, and sexual orientation. The restrictions by DSA will apply to all kinds of online ads, including commercial, political, and issue advertising. There are advertising patterns called the ‘dark patterns’ that were banned by this law. These patterns include subtle design cues intended to drive customers towards giving up personal data or even making decisions that favor the advertising company.

The law also requires all online platforms to have an option for users to report illegal content and products. These companies are also required to have their terms of services accessible. Companies termed as large online platforms are required to have an independent risk assessment option. The companies must be able to act towards mitigating those risks. Large companies are also required to have repositories of the adverts they have run, and they should allow the public to inspect them.

Companies have spent months preparing for this deadline, and most of the companies have taken action to ensure that they are in line with these new regulations. TikTok has led the way by rolling out a tool to be used in reporting illegal content. TikTok also noted that they would stop showing ads to teens in Europe based on the data the company has collected from them to comply with the DSA rules.

TikTok spokesperson Morgan Evans, in a statement, noted: “We’ve introduced new processes and features to provide greater transparency around our approach to advertising, content moderation, and recommendation systems — and ultimately, give users more control over their TikTok experience.”

Meta, through their President of Global Affairs Nick Clegg, in a statement, noted that the company has been supporting the rules and objectives of DSA. He noted that they had assembled a 1000-person team to prepare for the requirements of DSA. He outlines many efforts they had put in place, including limits on what data advertisers can see on teens who use Instagram and Facebook.

Microsoft, on its part, noted that these new rules by DSA were an important milestone in the fight against illegal content. Microsoft’s Chief Safety Officer Courtney Gregoire noted that the company was strengthening safety through its Bing search engine to ensure compliance with the new law.

In a statement, Apple noted that DSA’s goals aligned with their goals to protect consumers from illegal and harmful content. They added that they were working to implement the requirements of DSA.

Other companies that welcomed the move were Google and Pinterest. According to a Google Spokesperson, “We share the DSA’s goals of making the internet even safer, transparent, and accountable while ensuring that European users, creators, and businesses continue to enjoy the benefits of the web.” The Pinterest spokesperson added that the company would continue engaging the European Commission on the best way to implement the DSA.

Many companies are expected to comply with the new law, given their existing policies, monitoring tools, and teams. EU officials will be scrutinizing companies to ensure that there are no violations. Officials from the EU have already performed “stress tests” on X, formerly known as Twitter. X has already stated that it took the “stress tests” seriously and, therefore, was working hard to comply with the new law.

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