The European Parliament has voted by overwhelming margins(Opens in a new window) to adopt two bills, the Digital Services Act (DSA) and the Digital Markets Act (DMA), that will subject online platforms and “gatekeeper” tech firms to extensive new requirements that may require major changes in how US tech giants do business.
The European Union’s legislature passed the DSA by a 539-to-54 margin, with 30 abstentions, and approved the DMA in an even more lopsided vote: 588 yays, 11 nays, and 31 abstentions.
The sprawling text(Opens in a new window) (PDF) of the Digital Services Act(Opens in a new window) covers social platforms, online marketplaces, and search engines. It sets up a “notice and action” regime that requires the swift removal of illegal content as reported by users while requiring greater transparency by covered companies about their enforcement. Other transparency rules cover targeted advertising and recommendation algorithms, including a requirement that platforms provide one “recommender system” not based on personal profiling.
The DSA further requires online markets—referred to as “platforms allowing consumers to conclude distance contracts with traders,” but which you may think of more concisely as “Amazon”—to verify their sellers’ identities and make random checks for illegal goods or services being offered.
This law adds extra compliance requirements to “very large” online platforms, defined as those reaching more than 10% of the EU’s population (so 45 million or more monthly active users), a bit like how banking regulators have treated the largest financial institutions(Opens in a new window) since the 2007-2008 financial crisis. They must regularly assess and mitigate the systemic risks of their
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