In the coming months, Big Tech will face considerable operational changes — and challenges — in Europe. After the General Data Protection Regulation (GDPR), which took root in 2018 and changed data collection and dissemination, now looms the Digital Services Act (DSA) — or package, when including the Digital Markets Act (DMA). The DSA would set boundaries on services themselves, such as how they’re offered, where they’re offered and when, with rules in place governing everything from advertising to apps. The specific dates for the new regulations have been unclear. Earlier reports said it would be released on Dec. 2, but that has not been confirmed by the EU parliament.
As noted in this space previously, the broad strokes of the DSA would mandate that firms would have to show regulators how their algorithms work. The DMA would ensure they’d have to conform with requirements — applied to “gatekeepers” — that seek to shape how data are shared and limit at least some competitive practices (such as promoting the gate keepers’ services over rivals).
If the tech companies run afoul of those rules, they’d face sanctions — and as a reported last resort, may in fact face breakups.
The DSA and DMA first drafts, after all, stand as first drafts — meant to modernize rules that have been place for decades on the Continent — and in terms of the mechanics of it all, the European Parliament must approve it, and so will the 27 members of the EU.
“This process could last years,” noted the Brookings Institution.
Perhaps the process will indeed be drawn out, but when the changes come they will be comprehensive, along some segmented lines. If the DSA focuses, at least in part, on algorithms, and in some cases how content is monitored, the DMA looks to contour competition itself.
In a report last month from the Center for Strategic and International Studies, the new rules mean that “while the DSA package helps clarify the rules for most digital services, it could also give rise to enhanced obligations for [large online platforms] and, very likely, U.S. champions … the DSA and the DMA will have a transformative impact across the board on large U.S. corporate tech champions and their business models of delivering internet and digital services to 500 million European consumers.”
Among the new, possible obligations: horizontal due diligence, which the report notes are “basic obligations all platforms would be expected to meet,” and requirements to “know your business customer,” and report on measures tied to content moderation. The DMA, per the study, would prohibit or require certain “blacklisted” or “whitelisted” practices, and foster a movement toward interoperability. Data access may be made mandatory for platform/gatekeeper competitors.
“The Digital Services Act package would propose ex-ante rules covering large online platforms acting as gatekeepers, which now set the rules of the game for their users and their competitors. The initiative should ensure that those platforms behave fairly and can be challenged by new entrants and existing competitors, so that consumers have the widest choice and the Single Market remains competitive and open to innovations,” the EC said on its site..
The DSA’s publishing then looms as a red-letter day for platforms, for Big Tech, for a list of do’s and don’ts that may prove a minefield in some ways — and a “new normal” in others.
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