Big Tech's response to new regulations provides 'learnings' before other platforms comply

Digital Services Act and Digital Markets Act were imposed on some giants in the sector early, including Facebook owner Meta, and Google, ahead of the official deadline next February

Amazon won court backing for now in its fight against these EU tech rules that label it as a Vlop required to provide researchers and authorities access to its ad repositories to see how ads are targeted. Picture: Nick Ansell/PA Wire

It has been one month since two new major EU regulations took effect, giving the European Commission significantly more powers to keep Big Tech in line, and even though there have been some teething problems, there are still six months before the rules apply to other online platforms operating in the eurozone.

The obligations under the Digital Services Act (DSA) and Digital Markets Act (DMA) were imposed on some giants in the sector early, including Facebook owner Meta and Google ahead of the official deadline next February.

“The fact is there are thousands more online platforms for whom the DSA takes effect next February and what is happening in the last month and what will happen through to the end of the year for very large online platforms (Vlops) is actually a really good learning time for the other platforms,” said Wendy Hederman, technology law partner, Mason Hayes & Curran.

The DSA was introduced to enforce how online platforms moderate and respond to illegal and harmful content including damaging algorithms which may provide information on eating disorders etc, while the DMA restricts the practice of anticompetitive behaviour. 

Breaches of the rules under these Acts may result in hefty levies that could amount to 6% of a company’s annual turnover.

“The Transparency Database that went public this week, with already over 14 million moderation listings, shows that content moderation is happening and has been happening extensively. Some platforms more than others,” said Ms Hederman.

However, there has already been some pushback against the regulation. Earlier this week Amazon won court backing for now in its fight against these EU tech rules that label it as a Vlop, which require it to provide researchers and authorities access to its ad repositories to see how ads are targeted.

The US online retailer took its grievance to Europe's second highest court, the Luxembourg-based General Court, in July after EU antitrust regulators in April designated it as a Vlop along with 18 other platforms and search engines.

It asked for an interim measure to suspend DSA requirements on compiling and making public an advertisement repository, and on providing users with an option for each of its recommender systems which is not based on profiling, until the court rules on its challenge against its label.

The court agreed with its arguments.

"The grant of the interim measures requested amounts to no more than maintaining the status quo for a limited period," judges said in a ruling.

Amazon welcomed the interim measure, calling it an "an important first step that supports our broader position that Amazon doesn't fit the description of a 'Very Large Online Platform' (Vlop) under the DSA, and therefore should not be designated as such".

The court dismissed the second part of Amazon's application.

Ms Hederman does not believe the Amazon case will be a one off and that more litigation is likely to occur before next February.

“Every online platform works in a slightly different way because they have a different service offering and use different processes, and the provisions in the DSA can be pretty tricky to apply to each and every individual platform,” she said.

“Because the law has a lot of new novel and onerous obligations and not always clear how the detail applies to individual platforms, I don’t think the Amazon case is going to be the last litigation on this by any means,” she continued.

Digital Services Bill

Meanwhile, the Department of Enterprise, Trade and Employment published the general scheme of a Digital Services Bill 2023 earlier this year in preparation for the new regulations.

Media Minister Catherine Martin also announced the appointment of John Evans as digital services commissioner in Coimisiún na Meán, which will act as Ireland’s digital services coordinator under the DSA.

As bigger firms grapple with the new expectations of them, Minister of State for Trade Promotion, Digital and Company Regulation Dara Calleary said he anticipated “the volume and pace of new digital regulation emerging will present challenges to many businesses”.

Ireland is likely to be under the spotlight with how it adopts these new regulations as a number of tech giants have based their European headquarters in the Republic.

However, data protection commissioner Helen Dixon said while “outside responsibility is on our shoulders”, not all large tech multinationals are “in Ireland by any means”.

Ms Dixon recently told the Irish Examiner her organisation had begun work on implementing the new rules to ensure harmful content was correctly moderated and consumers continued to have a variety of choice when it comes to online platforms.

More headaches could be on the horizon for tech firms as the EU is set to bring the AI Act into effect in the coming months.

in June, more than 150 European companies signed a letter expressing concern that too much AI regulation could jeopardise their competitiveness.

• Additional reporting by Reuters