Tech Companies Must Adhere to New EU Rules

Tech companies will now need to comply with new European regulations that impact social media, marketplaces, and search engines. The new law focuses on areas such as social media moderation, targeted advertising, and counterfeit goods in e-commerce.

The law came into effect August 25 for all tech companies with more than 45 million EU users. This includes Apple, Amazon, Meta, Google, and TikTok. Smaller companies will need to comply with the law by February 2024.

Known as the Digital Services and Digital Market Acts, the law was passed in July 2022 and aims to “create a safer digital space where the fundamental rights of users are protected and to establish a level playing field for businesses.” Infractions of these new regulations can lead to fines of up to 6% of a company’s global annual revenue.

The new regulations ban all targeted advertising for children and define the qualities and attributes for targeted advertising for adults. For example, sexual orientation, political affiliation, and ethnicity can not drive advertising campaigns.

The law also bans designs that influence users into providing excessive personal information and coercing user decisions. Examples of this include making “accept all” tracking options more visible than other options or not allowing users to opt out without undergoing an overly complicated process. Similar recommendations have been published in the UK but have yet to become law.

The regulations require platforms to publish their terms of service in an accessible manner and the website must allow its users to report illegal content and products, as well defining a means to appeal content moderation decisions.

Platforms deemed exceptionally large must also submit to regular independent risk assessments related to how users could abuse the platform and apply updates to reduce the identified risks. 19 companies fall under this category.

While the impact on tech firms is significant, many have been working over the past months to prepare for this deadline and already have policies, teams and tools in place that will make complying with the new regulations straightforward.