EU to overhaul tech rules
The proposals for the Digital Markets Act (DMA) and the Digital Services Act (DSA) are both closer to becoming law. The DSA cleared a vote at the European Parliament’s Internal Market and Consumer Protection Committee. The DSA will introduce rules on intermediary responsibility to shield users from illegal and harmful content and services, among others. The very large online platforms are subject to specific obligations due to their reach.
The proposal, which has gone through intense negotiations since its inception, now includes a ban on dark patterns (technique inducing users to unwillingly click content), prohibition of targeted advertising of minors, enhanced rules on algorithmic transparency, data access without an exemption for trade secrets, and more. There is lingering criticism that the DSA proposal still allows for surveillance advertising, hidden recommendation systems to shape consumer preferences, and insufficient complaint and redress mechanisms for users.
The DMA proposal passed the European Parliament vote. Aimed to curb the power of Big Tech and allow for fairer market entry for small and medium enterprises, the DMA will regulate unfair business practices.
For the large online platforms to be considered gatekeepers under the DMA proposal, they will now have to have €8 billion in financial turnover and €80 billion in market capitalisation. The DMA proposal also includes an expanded set of key digital services, adding voice assistants, web browsers, and connected TVs in addition to social media and search engines. The DMA proposal has been expanded to include systemic non-compliance redress, measures against killer acquisitions, and the possibility for users to change default settings (including pre-installed apps) on their devices.
Both draft rules will continue legislative proceedings in January 2022, with the DSA facing a plenary vote in the European Parliament and the DMA entering interinstitutional negotiations. The DSA and DMA could be approved in the first half of 2022, entering into force in 2024. The two drafts have been closely followed by the USA and others, as this regulation will have global implications for the tech sector.
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