Wednesday, August 17

Europe begins a new era in front of the Big Tech: what changes the DSA and the DMA approved by an overwhelming majority

It was the last necessary step and Europe has not hesitated. After several years, the ambitious regulation for large technology companies has been approved in the European Parliament with a large majority. The Digital Services Law (DSA) and the Digital Markets Law (DMA) have been approved with 539 and 588 votes in favor. A unity that may be necessary to be able to defend these measures against companies that have gained enormous power in recent decades.

Amazon, Google, Apple, Meta, Microsoft and the big companies will have new obligations. The most repeated phrase by the European authorities is: “What is illegal offline, is also illegal online”. With this they want these companies to take responsibility and follow a series of obligations that until now they did not have. While the DSA will regulate social networks and online platforms, the DMA will focus on what Europe calls ‘gatekeepers’ or ‘guardians’. Those technology companies that have a position of power in the market.

A regulation directly applicable to all countries, without transposition. Due to its enormous complexity and to avoid different fights with respect to large companies, the whole of Europe will act equally against Big Tech. Both the DSA and the DMA will be published as law in the Official Journal of the European Union. This means that they will enter into force after 20 days, without the need for transposition in the different countries.

The great European regulation of the digital world (DSA and DMA) is already here: what it implies and how it will affect us Internet users

How much time do you have. The general measures of the DSA will apply from January 1, 2024, except in the case of large online platforms and large search engines, which must apply these requirements from 4 months after the text is published. That is to say, from the beginning of 2023, platforms such as Twitter, Instagram or TikTok must comply with the new regulations or they will be fined up to 10% of their global annual income (or 20% in case of repetition).

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In the case of the DMA, it will come into force after six months, although there is a differentiating factor here, and that is that companies can be added as ‘gatekeepers’. In this sense, the obligations will be from 6 months after the company has been designated as such.

What measures the DSA will force to apply: explanation of algorithms, removal of content and prohibition of certain advertising. The Digital Services Law adds a whole series of obligations in social networks, although it differentiates the large platforms (those with more than 45 million monthly users) from the rest. For the big ones, the requirements will be higher.

All online platforms will need to react quickly to illegal content. That is, they must delete and be responsible for the content. This movement has caused a stir since it can be understood as censorship. The DSA adds as a counterweight that “fundamental rights, including freedom of expression and data protection, must be respected.” It will be necessary to see how it is applied in the day to day. The law will also request more transparency in the operation of moderation, recommendations and will force the creation of a channel through which users can complain about a moderation that they consider erroneous.

Another measure is with online stores. They must improve traceability and verify the identity of sellers, in order to prosecute illegal activities. Regarding advertising, various practices will be prohibited, including the use of ‘Dark patterns’ that try to manipulate users with a tricky web design.

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For large platforms, obligations are added. Among them an independent audit that verifies that they are not helping to share disinformation or that they go against fundamental rights. They must also explain their algorithms to the authorities and allow a timeline not based on our profile. In other words, social networks like Instagram or Twitter will be obliged to offer a chronological timeline. The question remains as to how this obligation could affect platforms like TikTok, so based on the algorithm.

What measures will force the application of the WFD: the closed ecosystems are over. They have been warned for a long time and they have made some movement. Google, Apple, Meta, Twitter and Microsoft (but not Amazon) belong to the Data Transfer Project, an initiative to open ecosystems and allow data to pass from one to another. There is also Matter, the open standard for IoT. Now this claim will be written by law. The Digital Markets Law will force these ‘guardians’ to allow the data to pass from one place to another. Something that today we are far from achieving. The DMA will force third-party applications to be interoperable on their services. An example that has been repeated several times is that iMessage must work on Android.

Other requirements is that other companies that are on their platform must be allowed to download the data they generate, to promote their own businesses. In other words, if a company within Facebook manages its own community, the data resulting from these movements must also be in the hands of that small company.

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Big Tech will not be able to give direct preference to its own services in favor of other third-party ones, they will not be able to prevent users from removing pre-installed applications and they will not be able to prevent other application stores from being installed. This raises a lot of questions, such as whether we will finally see Google Play working on iOS.

If GDPR is still not compliant… it will take a lot of fines to get DSA/DMA compliant. The regulation that Europe has just approved is extremely ambitious, but compliance may still be a long way off. The objective is to replicate an effect similar to that of the Data Protection Regulation, where companies must follow a series of rules or be fined. With the DSA/DMA a similar stage opens, although it is difficult for large technology companies to meet all the requirements overnight.

Progressively companies like Google, Apple or Microsoft will be making changes to adapt, but it would not be surprising that for years we have been seeing episodes of sanctions for all kinds of issues, whether it is that an application does not work in the competition or that a certain company does not want to reveal the secrets of its algorithm. European legislators have finalized their regulations. Now it’s a matter of applying it.

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