Vulcan Insight | Big Tech to adhere to strict EU rules under the DSA from Summer 2023

The landmark Digital Services Act (DSA), which following months of negotiations and debate entered into force on 16 November 2022, is nearing the final phases before being fully implemented. In 2024, the flagship rules will be implemented to regulate the content and governance of digital platforms across the EU. The DSA aims to increase transparency on digital algorithms, stop the spread of illegal posts and disinformation, and protect user privacy. Platforms are subject to different degrees of regulation based on their size. Following its enter into force, all online platforms and online search engines were given a number of months to publish their user numbers in the EU for the first time.

Depending on its size, big tech is subject to a different set of rules. Very large online platforms (VLOPs) and very large search engines (VLOSEs), for instance are subject to the strictest rules. These companies have more than 45 million EU users. For VLOPs and VLOSEs, the DSA comes into effect four months after the Commission officially identifies them. Under DSA rules, big tech was obliged to reveal how many Europeans use their services by midnight on 17 February. Platforms such as Tik Tok, Facebook, YouTube, Snapchat, LinkedIn, and Twitter and online services like Google Search and Google Maps, have all disclosed their classification as very large online platforms and will now face strict DSA regulation. TikTok has confirmed that the platform has over 100 million EU users, while Meta, on the other hand, announced approximately 255 million average monthly EU based users for Facebook and approximately 250 million users on Instagram over the last 6 months. In the upcoming weeks, the Commission will formally confirm which big tech companies are to be considered VLOPs and VLOSEs. This is expected to take anything between two weeks and six weeks. If any companies withhold information about their user base, then the Commission will still have the power to designate them as very large online platforms and search engines by using public information releases.

In terms of next steps, all VLOPs and VLOSEs will now have four months to comply with the obligations of the DSA which include carrying out and providing the Commission with their first annual risk assessment. Going forward, companies will have to report their user numbers to the Commission every six months.

In the case of non-compliance, the Commission will have the power fine companies of up to 6% of their annual global revenue. Furthermore, going forward, VLOPs must pay 0.05% of their annual revenue for the enforcement of the DSA. Meanwhile, online platforms with less than 45 million users face regulations focused on monitoring and taking down illegal posts, which will only begin in 2024.

Earlier in February, large tech platforms were also asked to turn in a separate report on how they plan to implement the EU’s Code of Practice on Disinformation. Twitter failed to hand in a complete report, signaling to EU lawmakers that Big Tech compliance with digital regulation may not be so easy.

Chinese-owned Tik Tok faces particular scrutiny from EU regulators and has announced it will open a center for transparency and accountability in Dublin in March. Tik Tok has said that it will continue to “enhance external visibility of the work” it does “to protect” its community.

Compliments of Vulcan Consulting – a member of the EACCNY.