The impact of the EU's Digital Services Act on major tech companies like Google and Facebook

The Digital Services Act (DSA) of the European Union came into effect last week and changes the rules of internet governance. Large online platforms such as Google, Facebook, and Instagram (owned by Meta) must adhere to new strict obligations within the EU.

This legislation requires platforms to tackle harmful content, limit user targeting, and share internal data with regulators. With the introduction of the Digital Services Act (DSA) and other legislation such as the Digital Markets Act and the AI Act, the EU positions itself as a global pioneer in tech regulation.

Non-compliance with these new rules can have serious financial consequences for companies. Fines can amount to as much as 6% of global revenue, and in extreme cases, companies could even lose access to the European market. Companies like Amazon and Zalando are already embroiled in legal discussions regarding their inclusion in this regulation.

The European Commission has conducted stress tests to evaluate the readiness of these platforms, particularly concerning the management of systemic risks such as misinformation. Despite these tests, significant gaps remain in the effectiveness of content moderation, as revealed in a recent study by the nonprofit organization Eko.

In addition to the stringent requirements regarding transparency and data sharing, reports from nonprofit organizations indicate that platforms like Facebook and YouTube still struggle to address hate speech and violent content.

As the EU paves the way for a new generation of digital governance, companies face complex challenges and legal battlegrounds. How these platforms will comply with these new rules without jeopardizing their core operations remains an open question.

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