Digital services have become an integral part of our lives, providing us with a convenient way to stay connected with friends and family, access information, and conduct business. However, these services are not without their drawbacks. Social media platforms have been criticized for their role in the spread of misinformation, while online messaging apps have come under fire for their lack of privacy protections. In addition, digital advertising has been accused of stifling competition and driving up prices. As a result, there is increasing pressure on policymakers to regulate the digital economy. While some argue that such regulation is necessary to protect consumers, others contend that it would stifle innovation and growth.
The EU has voted to adopt two new regulations that will have a major impact on tech giants. The Digital Markets Act imposes new rules on the online networks providing online messaging, digital advertising, and a managed app ecosystem. The Digital Services Act will impact social-media platforms forcing them to become proactive in dealing with content EU regulators perceive as harmful and must offer users a mechanism to register their complaints about content moderation. The fines identified in the Digital Markets Act can be up to 10% of a company’s global revenue or 20% for repeat offenses. US regulators are considering similar regulations:
“The European Parliament on Tuesday voted its stamp of approval for the two laws—one focused on anticompetitive behavior, the other on content deemed illegal in Europe—after reaching an agreement on them with European Union member states in the spring.
The laws, which are backed by the threat of noncompliance fines in some extreme cases of as much as 20% of a company’s annual world-wide revenue, are the most far-reaching Western efforts to rein in technology companies in at least a generation. They build on the EU’s effort to expand its role as a global tech regulator and offer what proponents say is a road map—and what detractors warn will be a cautionary tale—for digital legislation in the U.S. and elsewhere.
“The EU is the first jurisdiction in the world to set a comprehensive standard for regulating the digital space,” said Thierry Breton, the EU’s internal-market commissioner.
The new rules could set a global benchmark for tech regulation, lawyers and digital-policy experts have said. Lawmakers in the U.S. from both major parties have introduced bills that include elements present in the EU’s Digital Markets Act aimed at reining in purportedly anticompetitive behavior by big tech companies. One would bar dominant tech companies from using their platforms to promote their own goods and services over those from other companies. Another could force the breakup of part of Google’s advertising business.”
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group