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European Union passes rules for digital platforms

European Union, Very Large Online Platforms, Danish

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European Union passes rules for digital platforms

The European Union will have a common set of rules across the 27-country bloc regulating online services and platforms, while providing user rights and protections. Writes Rosalyn Page

With a raft of last-minute amendments, the EU’s legislative arm has approved the Digital Services Act that requires online companies to police content on platforms and sets new advertising restrictions, proposed last year.

“Online platforms have become increasingly important in our daily life, bringing new opportunities, but also new risks. It is our duty to make sure that what is illegal offline is illegal online,” said Danish MEP, Christel Schaldemose, who is leading the Parliament’s negotiating team.

The measures are set to address the problem of illegal content, ensure digital platforms are held accountable for their algorithms and improve content moderation across platforms.

Removing illegal content and preventing the spread of disinformation

Under the regulations, online platforms, such as social media and marketplaces, will be subject to a “notice and action” mechanism for the removal of illegal products, services or content online.

Stronger safeguards are planned so that notices are processed in a non-arbitrary and non-discriminatory manner and with respect for fundamental rights, including the freedom of expression.

In addition, what’s defined as Very Large Online Platforms (VLOPs) will be subject to specific obligations because of the particular risks they pose regarding the dissemination of both illegal and harmful content.

These should limit the spread of harmful content (which might not be illegal) and the spread of disinformation through mandatory risk assessments, risk mitigation measures, independent audits and the transparency of so-called “recommender systems” (algorithms that determine what users see).

Key amendments added before the vote

To balance the plan to rein in Big Tech and their digital practices without stifling digital innovation, there were last-minute additions to the wide-ranging new regulations.

In particular, micro and small enterprises will be exempt from certain requirements, although the exact detail is yet to be outlined.

With targeted advertising, people will have clearer guidance and choices about how their information is used, with simple options to refuse consent.

VLOPs should provide at least one recommender system that is not based on profiling to create more options on algorithm-based ranking.

Online platforms should be prohibited from using deceiving or nudging techniques to influence users’ behavior through “dark patterns” that can compel them to sign up or pay for additional things.

There will also be a compensation provision for users when platforms don’t adhere to their due diligence obligations, and using data related to children for targeting will be prohibited.

Package of regulation targets services and markets

The Digital Services Act, along with the related Digital Markets Act, are intended to be a comprehensive package of rules for all digital services operating in the EU.

With the Digital Markets Act, the EU wants to address uneven market power across digital platforms to enable innovation and growth through improved competitiveness, in the EU and more broadly.

The two digital services and market regulations form critical updates to the eCommerce Directive, first introduced some 20 years ago, to catch up with the rapid pace of change in online platforms and services, and some of the negative and unintended consequences of widespread use.

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