E.U. Takes Aim at Social Media’s Harms With Landmark New Law

The European Union was close to a deal on landmark law on Friday that would expose Facebook, YouTube and other Internet services to combat misinformation, how their services expand divisive content and stop targeting online ads based on a person’s ethnicity, religion or sexual orientation. .

The law, known as the Digital Services Act, aims to address the social harms of social media by requiring companies to be more aggressive on their platforms for the risk of illegal content or billions of dollars in fines. Tech companies will be forced to set new policies and procedures to eliminate flagged hate speech, terrorist propaganda and other content defined as illegal by countries within the European Union.

The purpose of the law is to end an era of self-regulation in which tech companies set their own policies on what content can stay up or down. It differs from other regulatory efforts in addressing online speech, an area that is largely out of bounds due to First Amendment security in the United States. Google, which owns YouTube, and the owners of Meta, Facebook and Instagram, will face annual audits for “systemic risks” associated with their businesses, while Amazon will face new rules to prevent the sale of illegal products.

The Digital Services Act is part of a one-two punch by the European Union to address the social and economic impact of tech giants. Last month, a group of 27 nations agreed on a separate broader law, the Digital Market Act, to deal with regulators who see it as competitive behavior by the largest tech companies, including app stores, online advertising and their grip on Internet shopping.

Together, the new laws underscore how Europe is setting the standard for technological regulation globally. Disappointed with the competitive behavior, the impact of social media on elections and business models invading privacy, officials have been negotiating policies for over a year that give them vast new powers to crack down on tech giants worth trillions of dollars and billions of people. Used by People for communication, entertainment, pay and news.

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

The deal was expected to be announced by European policymakers in Brussels on Friday, although some warned that the deal could be delayed if negotiators needed more time.

The move is reversed with a lack of action in the United States. While US regulators have filed no-confidence lawsuits against Google and Meta, no comprehensive federal laws have been passed to counter the power of tech companies.

Although European authorities are gaining new legal powers to curb tech behemoths, critics wonder how effective they will be. Writing laws can be easier than enforcing them, and while the EU has a reputation as the world’s toughest regulator of the tech industry, its actions sometimes appear tougher on paper than in practice.

An estimated 230 new workers will be hired to enforce the new law, a figure that critics say is insufficient compared to the resources available to Meta, Google and others.

Tommaso Valletti, a former top economist at the European Commission working on a no-confidence motion against Google and other tech platforms, said staffing figures were “totally inadequate to cope with large companies and new giant operations.”

Without strong enforcement, he said, the new laws would be tantamount to an unfulfilled promise. Mr. Valletti said that despite Europe’s multibillion-dollar no-confidence rulings against Google in recent years, those actions did 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,” he said. Valletti, a professor of economics at Imperial College London. “You need cultural change in both regulators and regulatory companies. That is the real challenge. “

The lack of implementation of EU data privacy laws, the General Data Protection Regulation or the GDPR has also cast a shadow over the new laws.

Like the Digital Services Act and the Digital Markets Act, GDPR was hailed as a landmark law. But since its implementation in 2018, little action has been taken against Facebook, Google and others for their data-collection practices. Many have broken the rules by bombarding users with consent windows on their websites.

“They have not shown themselves capable of using the powerful tools that already exist to curb Big Tech,” said Johnny Ryan, a privacy-rights advocate and senior ally of the Irish Council for Civil Liberties, who has pushed for tougher enforcement. “I don’t expect them to suddenly show themselves any different with a new set of tools.”

Amazon declined to comment. Google and Meta did not respond to requests for comment. Companies and industry trade groups have warned that the law could have unintended consequences, hurt small businesses and undermine Europe’s digital economy.

Proponents of the new law say they have learned from past mistakes. While the implementation of the GDPR was left to regulators in individual countries – which many felt multinational corporations largely overestimated with a bottomless legislative budget – the new legislation would be implemented largely by the European Commission outside Brussels, a major shift in approach.

The final text of the Digital Services Act is not expected to be available for several weeks, and a final vote will still be needed, a move that has been seen as largely awkward since the deal was announced. But the European Commission and European Parliament policymakers involved in the negotiations detailed what would be one of the world’s most remote parts of digital policy.

The law, which will come into force next year, does not mandate Internet platforms to eliminate certain forms of speech, leaving it up to individual countries to define. (Certain forms of 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 and epidemic in Ukraine, policymakers were also considering giving additional power to regulators to force Internet companies to respond quickly during national security or health crises. This could include blocking certain state propaganda on social media during the war or online sale of bogus medical supplies and drugs during an epidemic.

Many of the provisions relating to social media closely follow the recommendations made by Francis Huagen, a former Facebook employee who became a whistle-blower. The law required companies to provide users with a way to turn off recommendation algorithms that use their personal data to tailor content.

Meta, TikTok and others will also have to share more data with researchers outside of universities and civil society groups about how their algorithms work. Companies will have to conduct an annual risk-assessment report, reviewed by an external auditor, with a summary of the findings made public.

Policymakers said the potential for reputation damage could be more powerful than penalties. But if the European Commission determines that Meta or another company is not doing enough to address the problems identified by the auditors, the company could face financial penalties of up to 6 percent of global revenue and be forced to change business practice.

New restrictions on targeted advertising could have a major impact on Internet-based businesses. The rules would limit the use of data based on race, religion, political opinion or labor union membership, although consideration was given to allowing the company to continue doing so with the consent of the user. Companies may not even target children with ads.

Online retailers, such as Amazon, will face new requirements to prevent the sale of illegal products by resellers on their platforms, leaving companies open to consumer litigation.

Europe’s position as regulatory leader will depend on the implementation of the new law, which is likely to face legal challenges from the largest companies, said Augustine Rena, director of legal and economic affairs at the European Consumer Organization.

“Effective implementation is the key to the success of these new rules,” he said. “The great power comes with great responsibility to ensure that the world’s largest companies are not able to bypass their obligations.”

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